By Susanna Moon
Chicago, June 9 – HSBC USA Inc. priced $3.1 million of contingent income autocallable securities due June 3, 2016 linked to Freeport-McMoRan Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 11.45% if the shares close at or above the 70% barrier level on the observation date for that quarter.
The notes will be called at par plus the contingent coupon if the stock closes at or above the initial price on any of the first three determination dates.
The payout at maturity will be par plus the final coupon unless the shares finish below the 70% barrier level, in which case investors will receive a number of Freeport-McMoRan shares equal to $10 divided by the initial price or, at the issuer’s option, the cash equivalent.
HSBC Securities (USA) Inc. is the agent with Morgan Stanley Wealth Management handling distribution.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent income auto-callable securities
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| Underlying stock: | Freeport-McMoRan Inc. (Symbol: FCX)
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| Amount: | $3,098,840
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| Maturity: | June 9, 2016
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| Contingent payment: | 11.45% for quarter if stock closes at or above barrier level on determination date for that quarter
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| Price: | Par of $10
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| Payout at maturity: | Par plus contingent coupon if Freeport-McMoRan stock finishes at or above barrier level; otherwise, full exposure to any losses
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| Call: | At par plus contingent payment if stock closes at or above initial share price on any of first three determination dates
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| Initial level: | $19.65
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| Barrier level: | $13.76, 70% of initial level
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| Pricing date: | June 5
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| Settlement date: | June 10
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| Agent: | HSBC Securities (USA) Inc. with Morgan Stanley Wealth Management as dealer
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| Fees: | 1.25%
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| Cusip: | 40434G130
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