Published on 8/23/2021 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $9.5 million contingent income autocalls on three fast food stocks
By William Gullotti
Buffalo, N.Y., Aug. 23 – HSBC USA Inc. priced $9.5 million of autocallable contingent income securities due Aug. 22, 2024 linked to the worst performing of the stocks of Chipotle Mexican Grill, Inc., Domino’s Pizza, Inc. and Restaurant Brands International Inc., according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon at an annual rate of 11.2% if each stock closes at or above its coupon barrier, 75% of its initial level, on the determination date for that period.
The notes will be called at par plus the contingent coupon if each stock closes above its initial level on any quarterly redemption date after six months.
The payout at maturity will be par plus the final coupon if each stock finishes at or above its coupon barrier.
If the worst performer finishes below its coupon barrier but at or above its 65% downside threshold, the payout at maturity will be par. Otherwise, investors will be fully exposed to the worst performer’s decline from its initial level.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Wealth Management is the distributor.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent autocallable income securities
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| Underlying stocks: | Chipotle Mexican Grill, Inc., Domino’s Pizza, Inc., Restaurant Brands International Inc.
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| Amount: | $9,495,500
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| Maturity: | Aug. 22, 2024
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| Coupon: | 11.2% per year, payable each quarter if each stock closes at or above coupon barrier on determination date for that period
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| Price: | Par of $10
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| Payout at maturity: | Par plus the final coupon if each stock finishes at or above its coupon barrier; if the worst performer finishes below its coupon barrier but at or above its 65% downside threshold, par; otherwise, investors will be fully exposed to the worst performer’s decline from its initial level.
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| Call: | Par plus the contingent coupon if each stock closes above its initial level on any quarterly redemption date after six months
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| Initial levels: | $1,851.48 for Chipotle, $525.62 for Domino’s, $64.00 for Restaurant
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| Coupon barrier levels: | $1,388.61 for Chipotle, $394.215 for Domino’s, $48.00 for Restaurant; 75% of initial levels
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| Downside thresholds: | $1,203.462 for Chipotle, $341.653 for Domino’s, $41.60 for Restaurant; 65% of initial levels
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| Pricing date: | Aug. 18
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| Settlement date: | Aug. 23
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| Agent: | HSBC Securities (USA) Inc.
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| Distributor: | Morgan Stanley Wealth Management
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| Fees: | 2.5%
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| Cusip: | 40439K375
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