HSBC USA to price autocallable notes linked to JPMorgan Chase, Goldman

By Sheri Kasprzak

New York, June 10 - HSBC USA led structured products news on Tuesday with an offering of autocallable notes linked to JPMorgan Chase & Co. and Goldman Sachs Group.

"It's an interesting strategy," said one market source when asked about linking to two financial entities.

"Given the way things have been for financial institutions lately, it's a sound structure. I don't know right off the top of my head how each of those [companies] has performed recently, but there are several notes like this popping up lately."

The two-year notes pay cash equal to 100% of the principal amount, assuming the final price of the worst-performing reference stock is greater than or equal to the 75% barrier price.

If the final price of the worst-performing reference stock is less than its barrier price, the investors receive a number of shares of the worst-performing stock, which will be determined at a later time.

The investors only receive payment at maturity if the notes are not redeemed early.

The notes are subject to early redemption on Sept. 11, 2008, at 106% of par; on Dec. 11, 2008, at 112% of par; March 11, 2009, at 118% of par; June 11, 2009, at 124% of par; Sept. 11, 2009, at 130% of par; Dec. 11, 2009, at 136% of par; March 11, 2010, at 142% of par; and on June 11, 2010, at 148% of par.

Shares down over month

In the past month, shares of JPMorgan have slipped by almost $10 per share. On May 9, the stock closed at $46.57 per share. On June 9, the stock ended the day at $37.51 and on Tuesday, the stock gained 78 cents to end at $38.29.

Shares of Goldman Sachs have also fallen over the past month. The stock was trading at $188.09 on May 9 and closed at $165.76 on June 9. The stock gained $1.45 to close at $167.21 on Tuesday, only to lose 32 cents in after-hours trading.

Natixis prices GM-linked notes

Moving to other structured products news, Natixis Securities North America priced $850,000 in reverse convertibles linked to the stock of General Motors Corp. Tuesday for Eksportfinans ASA.

The notes have a six-month term and a 24.8% coupon.

The notes pay par at maturity if the closing price of the stock does not drop below the 60% knock-in price on any trading day from the trade date up to the determination date.

If the stock price does breech the knock-in trigger, the investors receive a cash payment of $1,000 per security or a number of shares equal to $1,000 divided by the initial share price, which is $9.732.

Shares of GM down

Since early May, shares of General Motors have slid.

The stock closed at $20.29 on May 9. On June 9, the stock closed at $16.48.

Shares of GM were up 33 cents Tuesday to end the day at $16.81.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.