Published on 4/12/2011 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $7.31 million capped knock-out buffer notes tied to 12 stocks
By Angela McDaniels
Tacoma, Wash., April 12 - HSBC USA Inc. priced $7.31 million of 0% capped knock-out buffer notes due April 25, 2012 linked to a basket of stocks, according to a 424B2 filing with the Securities and Exchange Commission.
The equally weighted basket includes the common stocks of Chesapeake Energy Corp., Range Resources Corp., Southwestern Energy Co., Exxon Mobile Corp., Cenovus Energy Inc., ConocoPhillips, Baker Hughes Inc., Halliburton Co., Noble Corp., Arch Coal, Inc. and Consol Energy Inc. and the class B subordinated voting shares of Teck Resources Ltd.
A knock-out event occurs if the basket declines by more than 30% from the initial level during the life of the notes.
If a knock-out event occurs, the payout at maturity will be par plus the basket return, which could be positive or negative. Otherwise, the payout will be par plus the basket return, subject to a minimum payout of par.
In either case, the return will be capped at 20%.
J.P. Morgan Securities LLC is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Capped knock-out buffer notes
|
| Underlying stocks: | Chesapeake Energy Corp., Range Resources Corp., Southwestern Energy Co., Exxon Mobile Corp., Cenovus Energy Inc., ConocoPhillips, Baker Hughes Inc., Halliburton Co., Noble Corp., Arch Coal, Inc., Consol Energy Inc. and Teck Resources Ltd., equally weighted
|
| Amount: | $7,305,000
|
| Maturity: | April 25, 2012
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If basket declines by more than 30% from initial level during life of notes, par plus basket return, whether positive or negative; otherwise, par plus the basket return, with floor of par; return capped at 20% in each case
|
| Pricing date: | April 8
|
| Settlement date: | April 13
|
| Agent: | J.P. Morgan Securities LLC
|
| Fees: | 1%
|
| Cusip: | 4042K1GE7
|
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