By Wendy Van Sickle
Columbus, Ohio, Nov. 15 – HSBC USA Inc. priced $800,000 of phoenix quarterly review notes due Nov. 20, 2017 linked to the performance of the Brazilian real relative to the dollar, according to a 424B2 filing with the Securities and Exchange Commission.
If the spot rate is at or below the coupon barrier, 140% of the initial spot rate, on a quarterly observation date, the notes will pay a contingent coupon for that quarter. Otherwise, no coupon will be paid that quarter. The contingent coupon rate is 8.35% per year.
If the spot rate is at or below the initial spot rate on any quarterly observation date, the notes will be called at par plus the contingent coupon.
If the notes are not called and the final spot rate is at or below the trigger rate, 140% of the initial rate, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will have a loss of principal that is proportionate to the increase in the final spot rate from the initial spot rate.
In other words, if the real decreases in value compared to the dollar, investors may experience loss.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC and JPMorgan Chase Bank NA are the placement agents.
| 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: | $800,000
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| Maturity: | Nov. 20, 2017
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| Coupon: | 8.35% annualized if spot rate is at or below barrier on review date, payable quarterly
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| Price: | Par of $1,000
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| Payout at maturity: | Par plus contingent coupon if final spot rate is at or below trigger level; otherwise, full exposure to any increase in spot rate
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| Call: | At par plus contingent coupon if spot rate is at or below initial spot rate on a quarterly review date
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| Initial spot rate: | 3.3930
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| Trigger/coupon barrier: | 4.7502, 140% of initial spot rate
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| Pricing date: | Nov. 11
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| Settlement date: | Nov. 18
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| Underwriter: | HSBC Securities (USA) Inc.
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| Agents: | J.P. Morgan Securities LLC and JPMorgan Chase Bank NA
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| Fees: | 1%
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| Cusip: | 40433UZW9
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