Published on 8/8/2019 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $5 million trigger callable contingent yield notes on indexes
By Sarah Lizee
Olympia, Wash., Aug. 8 – HSBC USA Inc. priced $5 million of trigger callable contingent yield notes due Feb. 10, 2025 linked to the least performing of the S&P 500 index, the Russell 2000 index and the MSCI EAFE index, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes pay a contingent coupon if each index closes at or above its coupon barrier, 70% of its initial level, on the observation date for that quarter. The contingent coupon rate is 8.25% per year.
The notes are callable at par of $10 on each quarterly observation date after six months.
If the notes are not called and each index finishes at or above its 60% downside threshold, the payout at maturity will be par.
Otherwise, investors will lose 1% for every 1% that the least-performing index’s final level is below its initial level.
UBS Financial Services Inc. and HSBC Securities (USA) Inc. are the agents.
| Issuer: | HSBC USA Inc.
|
| Issue: | Trigger callable contingent yield notes
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| Underlying indexes: | S&P 500, Russell 2000 and MSCI EAFE
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| Amount: | $5 million
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| Maturity: | Feb. 10, 2025
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| Coupon: | 8.25% per year, payable for each quarter that each index closes at or above its coupon barrier on the observation date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | If each index finishes at or above downside threshold, par plus contingent coupon; otherwise, 1% loss for every 1% that least-performing index’s final level is below initial level
|
| Call option: | At par on each quarterly observation date after six months
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| Initial levels: | 1,832.72 on EAFE, 1,487.414 for Russell, 2,844.74 for S&P
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| Coupon barriers: | 1,282.90 for EAFE, 1,041.190 for Russell, 1,991.32 for S&P; 70% of initial levels
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| Downside thresholds: | 1,099.63 for EAFE, 892.448 for Russell, 1,706.84 for S&P; 60% of initial levels
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| Pricing date: | Aug. 5
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| Settlement date: | Aug. 8
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| Agents: | UBS Financial Services Inc. and HSBC Securities (USA) Inc.
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| Fees: | 1.75%
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| Cusip: | 40436B311
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