By Angela McDaniels
Tacoma, Wash., June 23 – HSBC USA Inc. priced $2.5 million of contingent income autocallable securities due June 22, 2018 linked to the worst performing of the common stocks of Apple Inc. and JPMorgan Chase & Co., according to a 424B2 filing with the Securities and Exchange Commission.
If each stock closes at or above its downside threshold level, 70% of its initial share price, on a quarterly determination date, the notes will pay a contingent payment that quarter at an annualized rate of 9.1%.
The notes will be called at par of $10 plus the contingent coupon if both stocks close at or above their initial share prices on any quarterly determination date other than the final determination date.
If both stocks finish at or above their downside threshold levels, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will receive a number of shares of the worst-performing stock equal to $10 divided by the initial price of that stock or, at the issuer’s option, a cash amount equal to the value of those shares.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable securities
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| Underlying stocks: | Apple Inc. (Symbol: AAPL) and JPMorgan Chase & Co. (Symbol: JPM)
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| Amount: | $2.5 million
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| Maturity: | June 22, 2018
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| Coupon: | 9.1% per year, payable quarterly if both stocks close at or above downside threshold levels on determination date for that quarter
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| Price: | Par of $10.00
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| Payout at maturity: | If final share price of each stock is greater than or equal to downside threshold level, par plus final contingent coupon; otherwise, number of shares of worst-performing stock equal to $10 divided by initial share price or, at issuer’s option, equivalent amount in cash
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| Call: | At par plus contingent coupon if each stock closes at or above initial share price on any quarterly determination date other than final determination date
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| Initial share prices: | $126.60 for Apple and $68.08 for JPMorgan
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| Downside thresholds: | $88.62 for Apple and $47.66 for JPMorgan, 70% of initial share prices
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| Pricing date: | June 19
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| Settlement date: | June 24
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| Agent: | HSBC Securities (USA) Inc.
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| Distribution: | Morgan Stanley Smith Barney LLC
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| Fees: | 2.5%
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| Cusip: | 40434E887
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