HSBC prices $7.98 million notes linked to Euro Stoxx; offering one of several linked to index

By Sheri Kasprzak

New York, Oct. 31 - HSBC USA Inc. is the latest issuer to offer up a fairly large deal linked to the Euro Stoxx 50 index. On Thursday, the bank announced a $7.98 million issue of 0% airbag return optimization securities linked to the index.

These notes are due Oct. 31, 2016 and pay par plus 150% of the index's return, subject to a 35.13% maximum return, at maturity if the index's return is positive. Investors will receive par if the index declines by 20% or less and will lose 1.25% for every 1% that the index declines beyond 20%.

BofA prices $229.77 million

Earlier in the week, Bank of America Corp. priced $229.77 million of 0% autocallable market-linked step-up notes linked to the index.

The notes, which are due Oct. 28, 2016, pay at maturity par plus the index return provided the index finishes above the step-up value, 147% of the initial value.

If the index return is zero or positive but the index finishes at or below the step-up value, the payout will be par plus the step-up payment of 47%.

Investors will be fully exposed to any index decline.

The notes will be called at par of $10.00 plus a premium if the index's closing level is greater than or equal to the initial level on either observation date. The premium will be $1.20 if the notes are called on Oct. 24, 2014 or $2.40 if the notes are called on Oct. 23, 2015.

BofA Merrill Lynch is the underwriter.

The index was up 27.26 points, or 0.90%, on Thursday to close at 3,067.95. Over the past two years, between Oct. 28, 2011 and Oct. 25, the index climbed by 23.24%. Over the past year, between Oct. 29, 2012 and Oct. 25, the index gained 22.42%. For the year through Oct. 25, the index has climbed by 11.92%.

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