By Angela McDaniels
Tacoma, Wash., Aug. 1 – HSBC USA Inc. priced $2.15 million of phoenix quarterly review notes due Aug. 7, 2017 linked to the performance of the Brazilian real relative to the dollar, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon at a rate of 8.7% per year if the spot rate of the real is less than or equal to the barrier, 140% of the initial spot rate, on the observation date for that quarter. An increase in the spot rate means the real has decreased in value compared to the dollar.
The notes will be automatically called at par if the spot rate on any quarterly observation date is less than or equal to the initial spot rate.
If the notes are not called and the final spot rate is less than or equal to the barrier, the payout at maturity will be par. Otherwise, investors will have a loss of principal that is proportionate to the increase in the final spot rate from the initial spot rate.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
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| Issue: | Phoenix quarterly review notes
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| Underlying currency: | Brazilian real
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| Amount: | $2.15 million
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| Maturity: | Aug. 7, 2017
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| Coupon: | Each quarter, notes pay contingent coupon at rate of 8.7% per year if spot rate is less than or equal to barrier on observation date for that quarter
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| Price: | Par
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| Payout at maturity: | If final spot rate is less than or equal to barrier, par; otherwise, investors will lose amount of principal that is proportionate to increase in final spot rate from initial spot rate.
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| Call: | Automatically at par if spot rate on any quarterly observation date is less than or equal to initial spot rate
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| Initial spot rate: | 3.2740 reais per dollar
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| Barrier: | 4.5836 reais per dollar, 140% of initial spot rate
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| Pricing date: | July 28
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| Settlement date: | Aug. 4
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 1%
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| Cusip: | 40433UTB2
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