Published on 6/27/2008 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $13.29 million bearish autocallable securities linked to Energy Select fund via UBS
By E. Janene Geiss
Philadelphia, June 27 - HSBC USA Inc. priced $13.29 million of 0% bearish autocallable optimization securities with contingent protection due Dec. 31, 2009 linked to the Energy Select Sector SPDR Fund, according to a 424B2 filing with the Securities and Exchange Commission.
UBS Financial Services Inc. and HSBC USA Inc. are the agents.
The notes will be automatically called if the fund closes at or below its initial level on any of six quarterly observation dates. Investors will receive par of $10 plus an annualized return of 26.91% to the settlement date.
If the notes are not called, the payout at maturity will be par unless the price of the fund increases above the trigger level - 140% of the initial level - during the life of the notes and finishes below the initial level, in which case investors will be fully exposed to the decline.
| Issuer: | HSBC USA Inc.
|
| Issue: | Bearish autocallable optimization securities with contingent protection
|
| Underlying asset: | Energy Select Sector SPDR Fund
|
| Amount: | $13,291,350
|
| Maturity: | Dec. 31, 2009
|
| Coupon: | 0%
|
| Price: | Par of $10.00
|
| Payout at maturity: | If the price of the fund falls below the trigger level during the life of the notes and finishes below the initial level, par minus the decline; otherwise, par
|
| Call: | Automatically if fund closes at or above the initial level on an observation date; for each $10.00 note, payout will be $10.67 if called on Sept. 25, 2008, $11.35 if called on Dec. 29, 2008, $12.02 if called on March 25, 2009, $12.69 if called on June 25, 2009, $13.36 if called on Sept. 25, 2009 and $14.07 if called on Dec. 28, 2009
|
| Initial price: | $87.12
|
| Trigger level: | $121.97, 140% of initial level
|
| Pricing date: | June 25
|
| Settlement date: | June 30
|
| Underwriter: | UBS Financial Services Inc. and HSBC USA Inc.
|
| Fees: | 1.5%
|
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