Published on 3/27/2012 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $7.18 million knock-out buffer notes linked to basket of three currencies
By Toni Weeks
San Diego, March 27 - HSBC USA Inc. priced $7.18 million of 0% knock-out buffer notes due April 8, 2013 linked to a basket of three currencies relative to the dollar, according to a 424B2 with the Securities and Exchange Commission.
The equally weighted basket components include the Korean won, the Mexican peso and the Russian ruble.
A knock-out event occurs if the basket falls by more than 15% relative to the initial level on the final valuation date of April 1, 2013.
If a knock-out event occurs, the payout at maturity will be par plus the basket return, with full exposure to losses.
Otherwise, the payout will be par plus the basket return, subject to a contingent minimum return of 6.25%.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the agent.
Issuer: | HSBC USA Inc.
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Issue: | Knock-out buffer notes
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Underlying currencies: | Korean won, Mexican peso and Russian ruble, all equally weighted and relative to the dollar
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Amount: | $7,183,000
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Maturity date: | April 8, 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 15% on April 1, 2013, par plus basket return, with full exposure to losses; otherwise par plus basket return, with floor of 6.25%
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Initial exchange rates: | 1,133.8 for won, 12.8139 for peso and 29.33 for ruble
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Knock-out buffer: | 15% of initial level
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Pricing date: | March 23
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Settlement date: | March 30
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Underwriter: | HSBC Securities (USA) Inc. (underwriter) and J.P. Morgan Securities LLC (agent)
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Fees: | 1%
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Cusip: | 4042K1B36
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