By Jennifer Chiou
New York, Jan. 20 - HSBC USA Inc. priced $3.75 million of 0% capped knock-out buffer notes due Jan. 30, 2013 linked to the common stock of Apple Inc., according to a 424B2 with the Securities and Exchange Commission.
The basket includes the common stocks of Allstate Corp., General Dynamics Corp., E. I. du Pont de Nemours and Co., Illinois Tool Works Inc., Newmont Mining Corp., Eaton Corp., Bank of New York Mellon Corp., Dow Chemical Co., Fifth Third Bancorp, MetLife, Inc. and Freeport-McMoRan Copper & Gold Inc.
A knock-out event occurs if the basket level on the final valuation date has fallen by more than 20% relative to the initial level.
If a knock-out event occurs, the payout at maturity will be par plus the basket return. Investors will be exposed to any losses.
If a knock-out event does not occur, the payout will be par plus the basket return, subject to a contingent minimum return of 5%.
In either case, the payout will be capped at 17%.
HSBC Securities (USA) Inc. is the underwriter with J.P. Morgan Securities LLC as placement agent.
Issuer: | HSBC USA Inc.
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Issue: | Capped knock-out buffer notes
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Underlying stocks: | Allstate Corp., General Dynamics Corp., E. I. du Pont de Nemours and Co., Illinois Tool Works Inc., Newmont Mining Corp., Eaton Corp., Bank of New York Mellon Corp., Dow Chemical Co., Fifth Third Bancorp, MetLife, Inc. and Freeport-McMoRan Copper & Gold Inc.
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Amount: | $3.75 million
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Maturity: | Jan. 30, 2013
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Coupon: | 0%
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Price: | Par
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Payout at maturity: | If basket falls by more than 20%, par plus return with exposure to losses; otherwise, par plus return with floor of 5%; cap of 17%
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Initial level: | 100
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Pricing date: | Jan. 18
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Settlement date: | Jan. 23
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Agents: | HSBC Securities (USA) Inc.; J.P. Morgan Securities LLC (placement agent)
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Fees: | 1%
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Cusip: | 4042K1VT7
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