Published on 7/20/2023 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $8 million contingent income callable securities on Nasdaq, S&P, Stoxx
By William Gullotti
Buffalo, N.Y., July 20 – HSBC USA Inc. priced $8 million of contingent income callable securities due Oct. 10, 2024 linked to the worst performing of the Euro Stoxx 50 index, the Nasdaq-100 index and the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.
The notes pay a contingent quarterly coupon at an annual rate of 11.5% if each index closes at or above its coupon barrier level, 70% of its initial index level, on the relevant observation day.
HSBC may call the notes at par plus any coupon due on any quarterly determination date.
If the notes are not called and each index finishes at or above its coupon barrier, the payout at maturity will be par plus the final coupon.
If the worst performer finishes below its coupon barrier but at or above its 65% downside threshold level, the payout will be par. Otherwise, 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 indexes: | Euro Stoxx 50 index, Nasdaq-100 index, S&P 500 index
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| Amount: | $8 million
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| Maturity: | Oct. 10, 2024
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| Coupon: | 11.5% per year, payable quarterly if each index 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 index finishes at or above coupon barrier, par plus final coupon; if worst performer finishes below coupon barrier but at or above downside threshold, par; otherwise, lose 1% for every 1% decline of worst performer from initial level
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| Call option: | At par plus any coupon due on any quarterly determination date
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| Initial levels: | 4,223.09 for Stoxx, 4,411.59 for S&P, 15,089.45 for Nasdaq
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| Coupon barriers: | 2,956.163 for Stoxx, 3,088.113 for S&P, 10,562.615 for Nasdaq; 70% of initial levels
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| Downside threshold: | 2,745.0085 for Stoxx, 2,867.5335 for S&P, 9,808.1425 for Nasdaq; 65% of initial levels
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| Pricing date: | July 6
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| Settlement date: | July 11
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| Agent: | HSBC Securities (USA) Inc.
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| Distribution: | Morgan Stanley Wealth Management
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| Fees: | None
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| Cusip: | 40447AFQ2
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