Published on 9/27/2013 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $7.4 million airbag return optimization notes on SPDR S&P 500 ETF
By Marisa Wong
Madison, Wis., Sept. 27 - HSBC USA Inc. priced $7.4 million of 0% airbag return optimization securities due Sept. 30, 2016 linked to the SPDR S&P 500 exchange-traded fund, according to a 424B2 filing with the Securities and Exchange Commission.
If the ETF's return is positive, the payout at maturity will be par plus 150% of the ETF's return, subject to a maximum return of 26%.
If the ETF's return is zero or negative but the final share price is greater than or equal to the conversion price, the payout will be par. The conversion price will be 85% of the initial share price.
If the final share price is less than the conversion price, the payout will be a number of shares of the ETF equal to $1,000 divided by the conversion price.
HSBC Securities (USA) Inc. is the underwriter, and UBS Financial Services Inc. is the agent.
Issuer: | HSBC USA Inc.
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Issue: | Airbag return optimization securities
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Underlying ETF: | SPDR S&P 500
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Amount: | $7,396,000
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Maturity: | Sept. 30, 2016
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Coupon: | 0%
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Price: | Par of $1,000
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Payout at maturity: | If ETF return is positive, par plus 150% of gain, return capped at 26%; if ETF return is zero or negative but final share price is greater than or equal to conversion price, par; otherwise, a number of ETF shares equal to $1,000 divided by conversion price
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Initial price: | $169.11
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Conversion price: | $143.74, 85% of initial price
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Exchange ratio: | 6.9570
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Pricing date: | Sept. 25
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Settlement date: | Sept. 30
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Underwriter: | HSBC Securities (USA) Inc. with UBS Financial Services Inc. as agent
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Fees: | 2.5%
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Cusip: | 40433X241
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