HSBC plans trigger autocallable contingent yield notes tied to indexes

By Wendy Van Sickle

Columbus, Ohio, May 11 – HSBC USA Inc. plans to price trigger autocallable contingent yield notes due May 31, 2018 linked to the S&P 500 index and the Russell 2000 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon at an annual rate of 7.5% to 8.5% if each index closes at or above its coupon barrier, 70% of its initial level, on the observation date for that quarter. The exact contingent coupon will be set at pricing.

The notes will be called at par if each index closes at or above its initial level on any semiannual observation date beginning Nov. 28, 2016.

The payout at maturity will be par unless either index finishes below the 70% trigger level, in which case investors will be fully exposed to any losses of the worse performing index.

HSBC Securities (USA) Inc. is the agent, and UBS Financial Services Inc. will handle distribution.

The notes will price on May 26 and settle on May 31.

The Cusip number is 40434V509.

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