Published on 5/27/2010 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $9.62 million autocallable optimization notes tied to Energy Select Sector SPDR
By Angela McDaniels
Tacoma, Wash., May 27 - HSBC USA Inc. priced $9.62 million of 0% autocallable optimization securities with contingent protection due June 1, 2011 linked to the Energy Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.
If the ETF's shares close at or above the initial share price of any of 12 monthly observation dates, the notes will be automatically called and investors will receive par of $10 plus an annualized call premium of 30%.
The observation dates are June 24, 2010, July 26, 2010, Aug. 25, 2010, Sept. 24, 2010, Oct. 25, 2010, Nov. 23, 2010, Dec. 27, 2010, Jan. 25, 2011, Feb. 22, 2011, March 25, 2011, April 25, 2011 and May 25, 2011.
If the notes are not called and the final share price is greater than or equal to 75% of the initial price, the payout at maturity will be par. If the final share price is less than 75% of the initial price, the payout will be par plus the fund return.
UBS Financial Services Inc. and HSBC Securities (USA) Inc. are the underwriters.
| Issuer: | HSBC USA Inc.
|
| Issue: | Autocallable optimization securities with contingent protection
|
| Underlying ETF: | Energy Select Sector SPDR fund
|
| Amount: | $9,616,110
|
| Maturity: | June 1, 2011
|
| Coupon: | 0%
|
| Price: | Par of $10
|
| Payout at maturity: | Par if final share price is greater than or equal to trigger price; otherwise, par plus share price return
|
| Call: | Automatically at par plus annualized call premium of 30% if ETF's shares close at or above the initial price on June 24, 2010, July 26, 2010, Aug. 25, 2010, Sept. 24, 2010, Oct. 25, 2010, Nov. 23, 2010, Dec. 27, 2010, Jan. 25, 2011, Feb. 22, 2011, March 25, 2011, April 25, 2011 or May 25, 2011
|
| Initial share price: | $51.98
|
| Trigger price: | $38.99, 75% of initial price
|
| Pricing date: | May 25
|
| Settlement date: | May 28
|
| Underwriters: | UBS Financial Services Inc. and HSBC Securities (USA) Inc.
|
| Fees: | 1.25%
|
| Cusip: | 40432R880
|
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