Published on 12/19/2022 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $7.75 million contingent income autocalls on indexes, EAFE ETF
By William Gullotti
Buffalo, N.Y., Dec. 19 – HSBC USA Inc. priced $7.75 million of contingent income callable securities due Dec. 18, 2023 linked to the worst performing of the iShares MSCI EAFE ETF, the Russell 2000 index and the Nasdaq-100 index, according to a 424B2 filing with the Securities and Exchange Commission.
The notes pay a contingent quarterly coupon at an annual rate of 10.05% if each underlier closes at or above its coupon barrier level, 70% of its initial level, on the relevant observation date.
The notes will be automatically called at par plus coupon if each underlier closes at or above initial levels on any quarterly determination date.
If each underlier finishes at or above its 70% downside threshold level, the payout at maturity will be par plus the final contingent coupon. If the final level of any underlier is less than its downside threshold level, investors will be fully exposed to the decline of the worst performer from its initial level.
HSBC Securities (USA) Inc. is the agent. Distribution is through Morgan Stanley Wealth Management.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent income callable securities
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| Underlying assets: | iShares MSCI EAFE ETF, Russell 2000 index, Nasdaq-100 index
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| Amount: | $7.75 million
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| Maturity: | Dec. 18, 2023
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| Coupon: | 10.05% per year, payable quarterly if each underlier closes at or above coupon barrier on the relevant observation date
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| Price: | Par
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| Payout at maturity: | If each underlier finishes at or above downside threshold level, par plus final contingent coupon; if final level of any underlier is less than downside threshold level, full exposure to decline of the worst performer from its initial level
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| Call option: | Automatically at par plus coupon on any quarterly determination date if each underlier closes at or above initial levels on the relevant observation date
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| Initial levels: | $67.79 for ETF, 11,834.21 for Nasdaq, 1,832.362 for Russell
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| Coupon barriers: | $47.453 for ETF, 8,283.947 for Nasdaq, 1,282.6534 for Russell; 70% of initial levels
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| Downside threshold: | $47.453 for ETF, 8,283.947 for Nasdaq, 1,282.6534 for Russell; 70% of initial levels
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| Pricing date: | Dec. 13
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| Settlement date: | Dec. 16
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| Agent: | HSBC Securities (USA) Inc.
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| Distribution: | Morgan Stanley Wealth Management
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| Fees: | 2%
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| Cusip: | 40441XYJ3
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