Published on 10/5/2021 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $8.6 million contingent income autocalls on three tech stocks
By William Gullotti
Buffalo, N.Y., Oct. 5 – HSBC USA Inc. priced $8.6 million of contingent income autocallable securities due July 24, 2024 linked to the worst performing of the stocks of Apple Inc., Alphabet Inc. and Microsoft Corp., according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 8.65% if each stock closes at or above its coupon barrier, 75% of its initial level, on the determination date for that period.
The notes will be called at par plus the contingent coupon if each stock closes above its initial level on any quarterly redemption date after six months.
If the notes are not called and each stock finishes at or above its coupon barrier, the payout at maturity will be par plus the final coupon.
If the worst performer finishes below its coupon barrier but at or above its 65% downside threshold, the payout at maturity will be par. Otherwise, investors will lose 1% for every 1% decline of the worst performer from its initial level.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Wealth Management is the distributor.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent income autocallable securities
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| Underlying stocks: | Apple Inc., Alphabet Inc., Microsoft Corp.
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| Amount: | $8.6 million
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| Maturity: | July 24, 2024
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| Coupon: | 8.65% per year, payable quarterly if each stock closes at or above coupon barrier on determination date for that period
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| Price: | Par of $10
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| Payout at maturity: | If each stock finishes at or above coupon barrier, par plus final coupon; if the worst performer finishes below coupon barrier but at or above downside threshold, par; otherwise, full exposure to decline of worst performer from its initial level
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| Call: | Par plus the contingent coupon if each stock closes above its initial level on any quarterly redemption date after six months
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| Initial levels: | $142.45 for Apple, $2,491.56 for Alphabet, $277.01 for Microsoft
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| Coupon barrier levels: | $106.8375 for Apple, $1,868.67 for Alphabet, $207.7575 for Microsoft; 75% of initial levels
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| Downside thresholds: | $92.593 for Apple, $1,619.514 for Alphabet, $180.057 for Microsoft; 65% of initial levels
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| Pricing date: | July 19
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| Settlement date: | July 22
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| Agent: | HSBC Securities (USA) Inc.
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| Distributor: | Morgan Stanley Wealth Management
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| Fees: | 2.5%
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| Cusip: | 40439K672
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