HSBC plans contingent income barrier autocallables tied to Gilead

By Marisa Wong

Morgantown, W.Va., Aug. 31 – HSBC USA Inc. plans to price autocallable contingent income barrier notes due Sept. 8, 2016 linked to the common stock of Gilead Sciences, Inc., according to an FWP filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon at the rate of 10.25% to 11% per year if the stock closes at or above the barrier level, 75% of the initial share price, on the determination date for that quarter. The exact contingent coupon rate will be set at pricing.

The notes will be automatically called at par if the stock closes at or above the initial share price on any quarterly call observation date beginning Dec. 2.

If the notes are not called and Gilead stock finishes at or above the 75% barrier level, the payout at maturity will be par. Otherwise, the payout will be a number of Gilead shares equal to $1,000 divided by the initial share price.

HSBC Securities (USA) Inc. is the underwriter.

The notes will price on Sept. 2 and settle on Sept. 8.

The estimated initial value of the notes on the pricing date is expected to be between $950 and $985 per $1,000 principal amount.

The Cusip number is 40433UAA4.

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