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HSBC plans to price autocallable step-up notes linked to Russell 2000
By Angela McDaniels
Tacoma, Wash., May 3 – HSBC USA Inc. plans to price 0% autocallable market-linked step-up notes due May 2019 linked to the Russell 2000 index, according to an FWP filing with the Securities and Exchange Commission.
The notes will be automatically called at par of $10 plus a call premium if the index closes at or above the initial index level on either of two annual observation dates. The call premium is expected to be 10% to 11% per year and will be set at pricing.
If the notes are not called and the final index level is greater than the step-up value, 130% of the initial index level, the payout at maturity will be par plus the index return.
If the final index level is greater than or equal to the initial level but less than or equal to the step-up value, the payout will be par plus the step-up payment, 30%.
If the final index level is less than the initial level, investors will have one-to-one downside exposure to the decline.
BofA Merrill Lynch is the agent.
The notes will price in May and settle in June.
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