By Marisa Wong
Madison, Wis., Feb. 13 - HSBC USA Inc. priced $15.45 million of 8% STEP Income Securities due Feb. 25, 2013 linked to the common stock of Citigroup, Inc., according to a 424B2 filing with the Securities and Exchange Commission.
Bank of America Merrill Lynch is the agent.
Interest will be payable quarterly.
If the final price of Citigroup stock is greater than or equal to the step level, the payout at maturity will be par of $10 plus a step payment of 2.27%. The step level is 108% of the initial share price.
If the final share price is greater than or equal to the threshold value, 90% of the initial share price, but less than the step level, the payout will be par.
Investors will lose 1% for every 1% that the share price declines below the threshold value.
Issuer: | HSBC USA Inc.
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Issue: | STEP Income Securities
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Underlying stock: | Citigroup, Inc. (NYSE: C)
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Amount: | $15,450,890
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Maturity: | Feb. 25, 2013
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Coupon: | 8%, payable quarterly
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Price: | Par of $10
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Payout at maturity: | If final share price is greater than or equal to step level, par plus 2.27%; if final price is greater than or equal to threshold value but less than step level, par; 1% loss for every 1% decline below the threshold value
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Initial price: | $34.05
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Step level: | $36.77, 108% of initial price
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Threshold value: | $30.65, 90% of initial price
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Pricing date: | Feb. 9
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Settlement date: | Feb. 16
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Agent: | Bank of America Merrill Lynch
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Fees: | 1.75%
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Cusip: | 40433K587
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