By Marisa Wong
Madison, Wis., Nov. 23 - HSBC USA Inc. priced $8.85 million of 8% STEP Income Securities due Dec. 6, 2012 linked to Honeywell International Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.
Interest will be payable quarterly.
If Honeywell stock finishes at or above the step level - 108% of the initial share price - the payout at maturity will be par of $10 plus the step payment of 8.62%.
If the stock finishes below the step level but at or above the threshold level - 95% of the initial price - the payout will be par.
Otherwise, investors will be exposed to any decline in the share price beyond 5%.
Bank of America Merrill Lynch is the agent.
Issuer: | HSBC USA Inc.
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Issue: | STEP Income Securities
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Underlying stock: | Honeywell International Inc.
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Amount: | $8,847,300
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Maturity: | Dec. 6, 2012
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Coupon: | 8%, payable quarterly
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Price: | Par
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Payout at maturity: | If Honeywell stock finishes at or above step level, par plus 8.62%; if stock finishes below step level but at or above threshold level, par; full exposure to losses beyond 5%
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Initial price: | $51.00
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Step level: | $55.08, 108% of initial price
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Threshold level: | $48.45, 95% of initial price
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Pricing date: | Nov. 22
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Settlement date: | Nov. 30
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Agent: | Bank of America Merrill Lynch
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Fees: | 1.75%
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Cusip: | 40433C122
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