By Marisa Wong
Madison, Wis., Dec. 30 - HSBC USA Inc. priced $1.73 million of contingent income autocallable securities due Dec. 30, 2016 linked to InterOil Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.
If InterOil stock closes at or above the downside threshold level, 60% of the initial share price, on a quarterly determination date, the notes will pay a contingent coupon at an annual rate of 23% for that quarter.
If the shares close at or above the initial share price on any of the first 11 quarterly determination dates, the notes will be redeemed at par of $10 plus the contingent payment.
If the notes are not called and the stock finishes at or above the downside threshold level, the payout at maturity will be par plus the contingent payment.
Otherwise, the payout will be a number of InterOil shares equal to $10 divided by the initial share price or, at the issuer's option, the cash equivalent.
HSBC Securities (USA) Inc. is the agent with distribution through Morgan Stanley Wealth Management.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | InterOil Corp. (NYSE: IOC)
|
| Amount: | $1.73 million
|
| Maturity: | Dec. 30, 2016
|
| Contingent payment: | 5.75% each quarter that InterOil stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus contingent payment; otherwise, 0.193087 InterOil shares or, at issuer's option, cash amount equal to value of those shares
|
| Call: | At par plus contingent payment if closing share price is greater than or equal to initial share price on any of first 11 quarterly determination dates
|
| Initial share price: | $51.79
|
| Downside threshold: | $31.07, 60% of initial share price
|
| Pricing date: | Dec. 26
|
| Settlement date: | Dec. 31
|
| Agent: | HSBC Securities (USA) Inc.
|
| Distribution: | Morgan Stanley Wealth Management
|
| Fees: | 2.25%
|
| Cusip: | 40434B552
|
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