By Jennifer Chiou
New York, April 25 - HSBC USA Inc. priced $9.81 million of 0% knock-out buffer notes due May 3, 2012 linked to the price of palladium, according to a 424B2 with the Securities and Exchange Commission.
A knock-out event occurs if the price of palladium falls by more than the buffer amount of 20% during the life of the notes.
If a knock-out event occurs, the payout at maturity will be par plus the return on palladium, with exposure to any losses.
If a knock-out event does not occur, investors will receive par plus any gain, with a contingent minimum return of 7.25%.
The maximum payout at maturity will be 20%.
J.P. Morgan Securities Inc. is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Knock-out buffer notes
|
| Underlying commodity: | Palladium
|
| Amount: | $9,807,000
|
| Maturity: | May 3, 2012
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If palladium falls below 80% of initial level during life of notes, par plus the return; otherwise, par plus gain, floor of 7.25%; cap of 20% in either case
|
| Pricing date: | April 21
|
| Settlement date: | April 26
|
| Agent: | J.P. Morgan Securities Inc.
|
| Fees: | 1%
|
| Cusip: | 4042K1GM9
|
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