HSBC to price trigger phoenix autocallables linked to Petrobras

By Toni Weeks

San Luis Obispo, Calif., May 8 - HSBC USA Inc. plans to price trigger phoenix autocallable optimization securities due May 16, 2018 linked to the American Depositary Shares of Petroleo Brasileiro SA, according to an FWP filing with the Securities and Exchange Commission.

If Petrobras ADSs close at or above the coupon barrier, 67% to 72% of the initial share price, on a monthly observation date, the issuer will pay a contingent coupon for that month at the rate of 8.5%. Otherwise, no coupon will be paid that month.

If the ADSs close at or above the initial price on any monthly observation date after one year, the notes will be called at par of $10 plus the contingent coupon.

If the notes are not called and Petrobras ADSs finish at or above the trigger price, 67% to 72% of the initial share price, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will be exposed to the share price decline from the initial price.

The exact terms will be set at pricing.

The notes (Cusip: 40433X712) are expected to price May 10 and settle May 15.

HSBC Securities (USA) Inc. is the underwriter. UBS Financial Services Inc. is the dealer.

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