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HSBC plans head start annual income opportunity notes tied to stocks
By Angela McDaniels
Tacoma, Wash., Jan. 3 - HSBC USA Inc. plans to price head start annual income opportunity notes with auto cap due Jan. 30, 2017 linked to a basket of 10 common stocks, according to an FWP filing with the Securities and Exchange Commission.
The basket includes Dow Chemical Co., Eli Lilly and Co., Freeport-McMoRan Copper & Gold Inc., Goldcorp Inc., Kraft Foods Inc., McDonald's Corp., Paychex, Inc., Raytheon Co., Reynolds American Inc. and Verizon Communications Inc.
Interest is payable annually and will equal the average of the performances of the basket stocks, subject to a floor of zero.
A stock's performance will be equal to the auto cap rate if its return is greater than or equal to negative 10%. The auto cap rate is expected to be at least 7% and will be set at pricing. If a stock's return is less than negative 10%, its performance will be the greater of its return and negative 30%.
The payout at maturity will be par.
The notes (Cusip: 4042K1UX9) will price Jan. 25 and settle Jan. 30.
HSBC Securities (USA) Inc. is the agent.
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