Published on 4/1/2020 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $2 million contingent income barrier autocallables tied to three stocks
By Sarah Lizee
Olympia, Wash., April 1 – HSBC USA Inc. priced $2 million of autocallable contingent income barrier notes due March 31, 2025 linked to the least performing of the common stocks of Chevron Corp., McDonald’s Corp. and Valero Energy Corp., according to a 424B2 filing with the Securities and Exchange Commission.
Each month, the notes will pay a contingent coupon at an annual rate of 37.2% if each stock closes at or above its coupon trigger price, 60% of the initial share price, on the observation date for that month.
The notes will be called at par plus the contingent coupon if each stock closes at or above 90% of its initial share price on any coupon observation date after two years.
If the notes are not called, the payout at maturity will be par unless any stock finishes below its 50% trigger level, in which case investors will be fully exposed to the decline of the least performing stock.
HSBC Securities (USA) Inc. is the agent.
Issuer: | HSBC USA Inc.
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Issue: | Autocallable contingent income barrier notes
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Underlying stocks: | Chevron Corp., McDonald’s Corp. and Valero Energy Corp.
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Amount: | $2 million
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Maturity: | March 31, 2025
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Coupon: | Each month, 37.2% per year if stocks close at or above coupon trigger price on observation date
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Price: | Par
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Payout at maturity: | If stocks finish at or above trigger price, par; otherwise, full exposure to decline of least performing stock
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Call: | Automatically at par plus final coupon if stocks close at or above 90% of initial share price on any coupon observation date after six months
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Initial share prices: | $69.27 for Chevron, $162.98 for McDonald’s, $39.63 for Valero
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Call levels: | 90% of initial levels
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Coupon trigger: | $41.562 for Chevron, $97.788 for McDonald’s, $23.778 for Valero; 60% of initial prices
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Trigger prices: | $34.635 for Chevron, $81.49 for McDonald’s, $19.815 for Valero, 50% of initial share price
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Pricing date: | March 25
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Settlement date: | March 30
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Agent: | HSBC Securities (USA) Inc.
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Fees: | 0.25%
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Cusip: | 40438CCM1
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