Published on 1/25/2018 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $997,000 8.5% contingent return barrier callables tied to two funds
By Susanna Moon
Chicago, Jan. 25 – HSBC USA Inc. priced $997,000 of callable barrier notes with contingent return due Jan. 27, 2020 linked to the lesser performing of the SPDR S&P Biotech exchange-traded fund and the Financial Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 8.5% if each fund closes at or above its 70% coupon barrier on the observation date for that quarter.
The notes are callable at par on any quarterly review date.
The payout at maturity will be par plus the contingent coupon unless either fund finishes below its 70% trigger level, in which case investors will be fully exposed to any losses of the worse performing fund.
HSBC Securities (USA) Inc. is the underwriter.
| Issuer: | HSBC USA Inc.
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| Issue: | Callable barrier notes with contingent return
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| Underlying funds: | SPDR S&P Biotech ETF and the Financial Select Sector SPDR fund
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| Amount: | $997,000
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| Maturity: | Jan. 27, 2020
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| Coupon: | 8.5% annualized, payable quarterly if each fund closes at or above 70% coupon barrier on review date for that quarter
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| Price: | Par
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| Payout at maturity: | Par unless either fund falls below 70% trigger, in which case full exposure to any losses of worse performing index
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| Call option: | At par on any quarterly review date beginning April 24, 2018
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| Initial levels: | $88.92 for biotech fund, $29.54 for financial fund
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| Trigger levels: | $62.244 for biotech fund, $20.68 for financial fund, 70% of initial levels
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| Pricing date: | Jan. 19
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| Settlement date: | Jan. 26
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 1.5%
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| Cusip: | 40435FRE9
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