Bank of America announces PHLX Housing Sector-linked notes; HSBC prices S&P 500-linked notes

By Sheri Kasprzak

New York, April 6 – Structured products action cranked back up after the Easter and Passover holidays with a housing index-linked offering from Bank of America Corp.

The bank plans to offer 0% autocallable market-linked step-up notes linked to the PHLX Housing Sector index, an Securities and Exchange Commission filing said.

Assuming the index finishes above the step-up level of 116% to 122% of the initial value, the notes pay par plus the index return at maturity.

If the index makes gains up to the step-up level, the payout at will be par plus the step-up payment of 16% to 22%.

Investors are otherwise fully exposed to losses.

The notes are due in April 2017 and will be called at par of $10 plus an annualized call premium of 10% if the index closes at or above the initial level on the call observation date in April 2016.

The index has climbed by 20.08% since April 8, 2014, from 196.11 to 237.47 on Friday.

Pricing is expected later this month.

HSBC prices S&P-linked notes

Among the larger offerings announced Monday, HSBC USA Inc. priced $20.29 million of 0% trigger performance securities linked to the S&P 500 index.

The notes are due Jan. 8, 2021.

The securities pay par of $10 plus 140.5% of the index return if the return is positive. Investors receive par if the index falls by up to 30% and are fully exposed to losses if it falls by more than 30% of the initial level.

HSBC was the underwriter for the offering, and UBS Financial Services Inc. was the agent.

Over the past five years, the index has gained 74.53%.

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