By Marisa Wong
Madison, Wis., Oct. 19 - HSBC USA Inc. priced $4 million of 0% knock-out buffer notes due Oct. 31, 2012 linked to the Mexican peso relative to the dollar, according to a 424B2 filing with the Securities and Exchange Commission.
A knock-out event occurs if the spot rate falls by more than 25%.
If a knock-out event occurs, the payout at maturity will be par plus the currency return, with exposure to any losses.
Otherwise, the payout will be par plus the greater of the currency return and 9.25%.
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 currency: | Mexican peso
|
| Amount: | $4 million
|
| Maturity date: | Oct. 31, 2012
|
| Coupon: | 0%
|
| Price: | Par
|
| Payout at maturity: | If peso falls by more than 25% relative to dollar during life of notes, par plus return with exposure to losses; otherwise, par plus greater of currency return and 9.25%
|
| Initial exchange rate: | 13.31825
|
| Pricing date: | Oct. 17
|
| Settlement date: | Oct. 24
|
| Underwriter: | HSBC Securities (USA) Inc. with J.P. Morgan Securities LLC as placement agent
|
| Fees: | 0.85%
|
| Cusip: | 4042K1QR7
|
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