By Susanna Moon
Chicago, Oct. 18 - HSBC USA Inc. priced $10.9 million of knock-out buffer notes due Oct. 31, 2012 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.
A knock-out event occurs if the index ever drops by more than 20% during the life of the notes.
If a knock-out event occurs, the payout at maturity will be par plus the index return with exposure to losses.
Otherwise, the payout will be par plus any index gain, with a contingent minimum return of 6.5%.
The maximum payment at maturity will be par plus $1,200 for each $1,000 principal amount.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the placement agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Knock-out buffer notes
|
| Underlying index: | S&P 500
|
| Amount: | $10,903,000
|
| Maturity date: | Oct. 31, 2012
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If index ever closes below 80% of initial level, par plus return, with exposure to losses; otherwise par plus any gain, floor of 6.5%; any gains capped at 20%
|
| Initial level: | 1,224.58
|
| Pricing date: | Oct. 14
|
| Settlement date: | Oct. 19
|
| Agents: | HSBC Securities (USA) Inc. (underwriter) and J.P. Morgan Securities LLC (placement agent)
|
| Fees: | 1%
|
| Cusip: | 4042K1QH9
|
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