HSBC eyes contingent income autocallable securities linked to Celgene

By Tali Rackner

Minneapolis, July 6 – HSBC USA Inc. plans to price contingent income autocallable step-up securities due July 10, 2020 linked to the common stock of Celgene Corp., according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly payment at an annualized rate of 8.5% if the shares close at or above the 80% downside threshold level on the observation date for that quarter.

The notes will be called at par of $10 plus the contingent coupon if the stock closes at or above the redemption threshold on any of the first 11 quarterly determination dates. The threshold will be 105% of the initial share price for the first four determination dates, 110% on the fifth through eighth dates and 115% on the ninth through eleventh dates.

The payout at maturity will be par plus the final coupon unless the shares finish below the 80% downside threshold level, in which case investors will lose 1% for each 1% decline of the stock from its initial level.

HSBC Securities (USA) Inc. is the agent, with Morgan Stanley Wealth Management handling distribution.

The notes will price July 7 and settle on July 12.

The Cusip number is 40435H541.

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