By Susanna Moon
Chicago, May 26 – HSBC USA Inc. priced $12.69 million of contingent income autocallable securities due May 26, 2016 linked to Seadrill Ltd. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly payment at an annual rate of 17.2% if Seadrill shares close at or above the barrier level, 50% of the initial share price, on a determination date for that quarter.
The notes will be called at par of $10 plus the contingent coupon if Seadrill shares close at or above the initial share price on any of the first three quarterly determination dates.
If the stock finishes at or above the 50% barrier level, the payout at maturity will be par plus the final contingent coupon.
Otherwise, investors will receive a number of Seadrill shares equal to $10 divided by the initial share price or, at the issuer’s option, a cash equivalent.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent income autocallable securities
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| Underlying stock: | Seadrill Ltd. (Symbol: SDRL)
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| Amount: | $12.69 million
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| Maturity: | May 26, 2016
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| Coupon: | 17.2% per year, payable quarterly if Seadrill shares close at or above barrier level on determination date for that quarter
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| Price: | Par of $10.00
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| Payout at maturity: | If stock finishes at or above barrier level, par plus final contingent coupon; otherwise, number of Seadrill shares equal to $10 divided by initial level
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| Call: | At par plus contingent coupon if Seadrill shares close at or above initial share price on any of first three quarterly determination dates
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| Initial level: | $13.94
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| Barrier level: | $6.97, 50% of initial share price
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| Pricing date: | May 21
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| Settlement date: | May 27
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| Agent: | HSBC Securities (USA) Inc.
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| Distribution: | Morgan Stanley Smith Barney LLC
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| Fees: | 1.25%
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| Cusip: | 40434G254
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