By William Gullotti
Buffalo, N.Y., Sept. 1 – HSBC USA Inc. priced $10 million of phoenix monthly review notes with a memory coupon feature due Aug. 29, 2022 linked to the common shares of Eli Lilly & Co., according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent monthly coupon at an annualized rate of 13.8001% if the shares close at or above their 90% coupon barrier on the corresponding observation date. If a coupon payment is missed because the stock closes below the barrier, it will be paid on the next coupon payment date that the stock closes at or above the barrier.
The notes will be called at par plus the contingent coupon if the shares close at or above the initial price on any monthly observation date.
The payout at maturity will be par plus the contingent coupon unless the shares finish below the 90% trigger level, in which case investors will lose 1.1111% per 1% decline below the trigger price.
HSBC Securities (USA) Inc. is the underwriter, and JPMorgan Chase Bank, NA and J.P. Morgan Securities LLC are the placement agents.
Issuer: | HSBC USA Inc.
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Issue: | Phoenix monthly review notes with memory coupon
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Underlying stock: | Eli Lilly & Co.
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Amount: | $10 million
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Maturity: | Aug. 29, 2022
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Coupon: | 13.8001% annual rate, payable monthly if stock closes at or above coupon barrier on the corresponding observation date; if coupon payment is missed, it will be paid on next coupon payment date that stock closes at or above barrier
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Price: | Par
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Payout at maturity: | Par plus coupon unless stock finishes below trigger level, in which case 1.1111% loss per 1% decline beyond 10%
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Call: | At par if stock closes at or above initial level on any monthly determination date
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Initial level: | $263.87
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Trigger level: | $237.483; 90% of initial level
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Strike date: | Aug. 25
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Pricing date: | Aug. 26
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Settlement date: | Aug. 31
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Agent: | HSBC Securities (USA) Inc.
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Placement agents: | JPMorgan Chase Bank, NA and J.P. Morgan Securities LLC
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Fees: | 0.25%
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Cusip: | 40439JKP9
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