HSBC plans contingent income autocallables linked to Blackstone

By Angela McDaniels

Tacoma, Wash., Jan. 6 – HSBC USA Inc. plans to price contingent income autocallable securities due July 18, 2017 linked to the common equity securities of Blackstone Group LP, according to an FWP filing with the Securities and Exchange Commission.

If Blackstone equity securities close at or above the downside threshold level, 80% of the initial price, on a monthly determination date, the notes will pay a contingent payment that month at an annualized rate of at least 12.5%. The exact rate will be set at pricing.

The notes will be called at par of $10 plus the contingent coupon if Blackstone equity securities close at or above the initial price on any monthly determination date other than the final determination date.

If the final price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will lose 1% for every 1% that the final price is less than the initial price.

HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.

The notes are expected to price Jan. 13.

The Cusip number is 40435C773.

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