Published on 10/3/2022 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $1.3 million callable contingent income barrier notes on four stocks
By William Gullotti
Buffalo, N.Y., Oct. 3 – HSBC USA Inc. priced $1.3 million of callable contingent income barrier notes due Oct. 3, 2025 linked to the performance of Walmart Inc., Costco Wholesale Corp., Target Corp. and the Amazon.com, Inc., according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent monthly coupon at an annual rate of 27% if each stock closes at or above its trigger level, 70% of its initial level, on the observation date for that period.
The notes will be callable at par plus any coupon due on any monthly call observation date after three months.
The payout at maturity will be par plus the final coupon if each stock finishes above its coupon trigger level.
If any stock lags below the trigger level, but every stock finishes at or above its 50% barrier level, the payout at maturity will be par. Otherwise, investors will be fully exposed to the decline of the lowest performing stock from its initial level.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
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| Issue: | Callable contingent income barrier notes
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| Underlying stocks: | Walmart Inc., Costco Wholesale Corp., Target Corp., Amazon.com, Inc.
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| Amount: | $1,297,000
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| Maturity: | Oct. 3, 2025
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| Coupon: | 27%, payable monthly if each stock closes at or above trigger level on determination date for that period
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| Price: | Par
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| Payout at maturity: | If each stock finishes at or above trigger level, par plus the final coupon; if any stock falls below trigger level, but each stock finishes at or above barrier level, par; otherwise, exposure to decline of worst-performing stock from its initial level
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| Call option: | At par plus any coupon due on any monthly call observation date after three months
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| Initial level: | $133.11 for Walmart, $488.29 for Costco, $155.87 for Target, $118.01 for Amazon
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| Trigger levels: | $93.177 for Walmart, $341.803 for Costco, $109.109 for Target, $82.607 for Amazon; 70% of initial levels
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| Barrier levels: | $66.555 for Walmart, $244.145 for Costco, $77.935 for Target, $59.005 for Amazon; 50% of initial levels
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| Pricing date: | Sept. 28
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| Settlement date: | Oct. 3
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 0.75%
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| Cusip: | 40441XPD6
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