Published on 1/5/2023 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $7.15 million contingent income autocalls on three aerospace stocks
By William Gullotti
Buffalo, N.Y., Jan. 5 – HSBC USA Inc. priced $7.15 million of contingent income autocallable securities due Dec. 26, 2025 linked to the worst performing of the stocks of Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Technologies Corp., according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 13.2% if each stock closes at or above its coupon barrier, 60% of its initial level, on every trading day during the observation period.
The notes will be called at par plus any contingent coupon due if each stock closes above its initial level on any quarterly redemption date after six months.
If the notes are not called and each stock finishes at or above its 60% downside threshold, the payout at maturity will be par plus any final coupon otherwise due.
Otherwise, investors will lose 1% for every 1% decline of the worst performer from its initial level.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Wealth Management is the distributor.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable securities
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| Underlying stocks: | Lockheed Martin Corp., Northrop Grumman Corp., Raytheon Technologies Corp.
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| Amount: | $7,145,000
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| Maturity: | Dec. 26, 2025
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| Coupon: | 13.2% per year, payable quarterly if each stock closes at or above coupon barrier on every trading day during the observation period
|
| Price: | Par of $10
|
| Payout at maturity: | If each stock finishes at or above downside threshold, par plus any final coupon otherwise due; otherwise, full exposure to decline of worst performer from its initial level
|
| Call: | Par plus any contingent coupon otherwise due if each stock closes above its initial level on any quarterly redemption date after six months
|
| Initial levels: | $487.65 for Lockheed Martin, $538.79 for Northrop Grumman, $99.76 for Raytheon
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| Coupon barrier levels: | $292.59 for Lockheed Martin, $323.274 for Northrop Grumman, $59.856 for Raytheon; 60% of initial levels
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| Downside thresholds: | $292.59 for Lockheed Martin, $323.274 for Northrop Grumman, $59.856 for Raytheon; 60% of initial levels
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| Pricing date: | Dec. 21
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| Settlement date: | Dec. 27
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| Agent: | HSBC Securities (USA) Inc.
|
| Distributor: | Morgan Stanley Wealth Management
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| Fees: | 2.5%
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| Cusip: | 40441B512
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