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HSBC plans to price knock-out buffer notes linked to Mexican peso
By Toni Weeks
San Diego, May 21 - HSBC USA Inc. plans to price 0% knock-out buffer notes due June 11, 2013 linked to the performance of the Mexican peso relative to the dollar, according to an FWP filing with the Securities and Exchange Commission.
A knock-out event occurs if the peso has depreciated, as compared to the initial spot rate, by more than 15%.
If a knock-out event occurs, the payout at maturity will be par plus the currency return. Otherwise, the payout will be par plus the greater of the currency return and the contingent minimum return, which is expected to be 9.1% and will be set at pricing.
The currency return is the quotient of (a) the initial spot rate minus the final spot rate divided by (b) the initial spot rate.
The notes (Cusip: 4042K1P31) will price May 25 and settle June 4.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the placement agent.
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