By Angela McDaniels
Tacoma, Wash., April 3 - HSBC USA Inc. priced $4.61 million of contingent income autocallable securities due April 4, 2013 linked to the iShares MSCI Emerging Markets index fund, according to a 424B2 filing with the Securities and Exchange Commission.
If the exchange-traded fund's shares close at or above the downside threshold level, 75% of the initial share price, on a quarterly determination date, investors will receive a contingent payment of $0.20 for each $10.00 note. Otherwise, no contingent payment will be made that quarter.
If the closing share price is greater than or equal to the initial share price on any of the first three quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment.
If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. If the final share price is less than the downside threshold level, investors will be fully exposed to the decline from the initial share price.
HSBC Securities (USA) Inc. is the agent. Distribution is through Morgan Stanley Smith Barney LLC.
| Issuer: | HSBS USA Inc.
|
| Issue: | Contingent income autocallable securities
|
| Underlying ETF: | iShares MSCI Emerging Markets index fund
|
| Amount: | $4,611,250
|
| Maturity: | April 4, 2013
|
| Contingent payments: | If shares close at or above 75% of initial share price on quarterly determination date, $0.20 for each $10.00 note; otherwise, none that quarter
|
| Price: | Par of $10.00
|
| Payout at maturity: | If notes are not called and final share price is greater than or equal to 75% of initial share price, par plus $0.20; otherwise, full exposure to decline from initial share price
|
| Call: | Automatically at par plus $0.20 if closing share price is greater than or equal to initial share price on June 29, 2012, Oct. 1, 2012 or Dec. 31, 2012
|
| Initial share price: | $42.94
|
| Pricing date: | March 30
|
| Settlement date: | April 4
|
| Agent: | HSBC Securities (USA) Inc.
|
| Distribution: | Morgan Stanley Smith Barney LLC
|
| Fees: | 1.5%
|
| Cusip: | 40433K231
|
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