HSBC plans knock-out buffer notes on three currencies relative to yen

By Toni Weeks

San Luis Obispo, Calif., Feb. 12 - HSBC USA Inc. plans to price 0% knock-out buffer notes due March 4, 2014 linked to a basket of three currencies relative to the Japanese yen, according to an FWP with the Securities and Exchange Commission.

The equally weighted basket components include the Brazilian real, the Chilean peso and the Mexican peso.

A knock-out event occurs if the basket falls by more than 15% relative to the initial level on the final valuation date of Feb. 25, 2014.

If a knock-out event occurs, the payout at maturity will be par plus the basket return, with full exposure to losses.

Otherwise, the payout will be par plus the basket return, subject to a contingent minimum return of 7.5%.

The notes (Cusip: 40432XBH3) are expected to price Feb. 15 and settle Feb. 25.

HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the agent.

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