Published on 6/9/2016 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $2.1 million contingent income barrier notes on Metals and Mining ETF
By Tali Rackner
Norfolk, Va., June 9 – HSBC USA, Inc. priced $2.1 million of contingent income barrier notes due June 2, 2022 linked to the SPDR S&P Metals and Mining exchange-traded fund, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly payment at an annual rate of 7.5% if the fund closes at or above the 50% downside threshold level on a determination date for that quarter.
The payout at maturity will be par plus the contingent unless the fund finishes below the 50% barrier price, in which case investors will be fully exposed to any losses.
HSBC Securities (USA) Inc. is the underwriter.
Issuer: | HSBC USA Inc.
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Issue: | Contingent income barrier notes
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Underlying ETF: | SPDR S&P Metals and Mining ETF
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Amount: | $2.1 million
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Maturity: | June 2, 2022
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Coupon: | 7.5% per annum, payable quarterly if ETF closes at or above coupon trigger on coupon determination date for that quarter
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Price: | Par of $1,000
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Payout at maturity: | Par if ETF return is greater than or equal to negative 50%; otherwise, full exposure to losses, equal to the physical delivery amount in shares
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Initial share price: | $21.29
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Coupon trigger/barrier price: | $10.645, 50% of initial share price
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Pricing date: | May 27
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Settlement date: | June 2
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Underwriter: | HSBC Securities (USA) Inc.
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Fees: | 2%
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Cusip: | 40433UPK6
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