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HSBC plans knock-out barrier notes due 2016 linked to peso vs. euro
By Jennifer Chiou
New York, Feb. 26 – HSBC USA Inc. plans to price knock-out barrier notes due March 18, 2016 linked to the performance of the Mexican peso relative to the euro, according to an FWP with the Securities and Exchange Commission.
A knock-out event occurs if on the final valuation date the Mexican peso has depreciated against the euro as compared to the initial spot rate by more than 10%. That is, the peso weakens against the euro and the final spot rate is greater than the initial spot rate by more than 10%.
If a knock-out event has occurred, the payout at maturity will be par plus the currency return. Investors will be fully exposed to losses.
If a knock-out event has not occurred, the payout at maturity will be par plus the greater of the currency return and the 7.25% contingent minimum return.
The notes (Cusip: 40433BB64) will price on Feb. 27 and settle on March 4.
HSBC Securities (USA) Inc. is the agent.
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