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HSBC to price contingent income autocallables linked to three indexes
By Angela McDaniels
Tacoma, Wash., Aug. 1 – HSBC USA Inc. plans to price autocallable contingent income barrier notes due Feb. 9, 2021 linked to the least performing of the Dow Jones industrial average, the Russell 2000 index and the Nasdaq-100 index, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon if each index closes at or above its barrier level, 70% of its initial level, on the observation date for that quarter. The contingent coupon rate is expected to be 9.75% to 11.75% per year and will be set at pricing.
Beginning Feb. 5, 2020, the notes will be called at par if each index closes at or above its initial level on any coupon observation date.
A trigger event occurs if any index closes below its barrier level on any trading day during the life of the notes.
If a trigger event does not occur and the return of the least-performing index is greater than or equal to negative 30%, the payout will be par.
If a trigger event does not occur and the return of the least-performing index is less than negative 30%, investors will lose 1% for every 1% that the least-performing index declines from its initial level.
If a trigger event does occur and the return of the least-performing index is greater than or equal to zero, the payout will be par.
If a trigger event does occur and the return of the least-performing index is less than zero, investors will lose 1% for every 1% that the least-performing index declines from its initial level.
HSBC Securities (USA) Inc. is the agent.
The notes will price Aug. 6.
The Cusip number is 40435UUR3.
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