Published on 3/17/2020 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $1.23 million callable contingent income barrier notes on indexes, ETF
By Sarah Lizee
Olympia, Wash., March 17 – HSBC USA Inc. priced $1.23 million of callable contingent income barrier notes due March 13, 2023 linked to the S&P 500 index, Russell 2000 index and Energy Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annualized rate of 8.65% if each underlying closes at or above the coupon trigger level, 70% of the initial level, on the observation date for that quarter.
The notes will be callable at par plus any coupon due on any quarterly call observation date after one year.
If the notes are not called and each underlying finishes at or above the 60% barrier level, the payout at maturity will be par plus the final coupon, if any. Otherwise, investors will lose 1% for each 1% decline of the least-performing underlying from its initial level.
HSBC Securities (USA) Inc. is the underwriter.
| Issuer: | HSBC USA Inc.
|
| Issue: | Callable contingent income barrier notes
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| Underlying assets: | S&P 500 index, Russell 2000 index and Energy Select Sector SPDR fund
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| Amount: | $1,225,000
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| Maturity: | March 13, 2023
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| Coupon: | 8.65%, payable quarterly if each underlying closes at or above coupon trigger level on observation date for that quarter
|
| Price: | Par
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| Payout at maturity: | If each underlying finishes at or above barrier level, par plus any final coupon; otherwise, 1% loss for each 1% decline of the least-performing underlying from initial level
|
| Call option: | At par plus any coupon on any quarterly call observation date after one year
|
| Initial levels: | 2,972.37 for S&P, 1,449.221 for Russell, $42.50 for ETF
|
| Coupon trigger: | 2,080.659 for S&P, 1,014.4547 for Russell, $29.75 for ETF, 70% of initial prices
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| Barrier levels: | 1,783.422 for S&P, 869.5326 for Russell, $25.50 for ETF, 60% of initial prices
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| Pricing date: | March 6
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| Settlement date: | March 11
|
| Underwriter: | HSBC Securities (USA) Inc.
|
| Fees: | 2.5%
|
| Cusip: | 40438CBR1
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