Published on 3/4/2016 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $18.51 million callable contingent income notes on S&P 500
By Marisa Wong
Morgantown, W.Va., March 4 – HSBC USA Inc. priced $18.51 million of callable contingent income securities due March 4, 2026 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a coupon at the rate of 9.1% per year if the index closes at or above the coupon barrier level, 75% of the initial index level, on the observation date for that quarter.
If the index finishes at or above the downside threshold level, 60% of its initial level, the payout at maturity will be par of $10 plus the final coupon, if applicable. If the index finishes below the downside threshold level, investors will be fully exposed to the index’s decline.
Beginning March 3, 2017, the notes will be callable at par on any interest payment date.
HSBC Securities (USA) Inc. is the agent. Distribution is through Morgan Stanley Wealth Management.
| Issuer: | HSBC USA Inc.
|
| Issue: | Callable contingent income securities
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| Underlying index: | S&P 500
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| Amount: | $18,512,950
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| Maturity: | March 4, 2026
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| Coupon: | 9.1% per year, payable quarterly if the index closes at or above the barrier level on the observation date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If the index finishes at or above the downside threshold level, par plus the final coupon, if applicable; otherwise, investors will be fully exposed to the index’s decline
|
| Call option: | Beginning March 3, 2017, at par on any interest payment date
|
| Initial level: | 1,932.23
|
| Barrier level: | 1,449.17, 75% of initial level
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| Downside threshold level: 1,159.34, 60% of initial level
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| Pricing date: | Feb. 29
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| Settlement date: | March 3
|
| Agent: | HSBC Securities (USA) Inc.
|
| Distribution: | Morgan Stanley Wealth Management
|
| Fees: | 3.5%
|
| Cusip: | 40434N747
|
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