HSBC plans seven-year annual income opportunity notes on 10 stocks

By Susanna Moon

Chicago, Jan. 3 - HSBC USA Inc. plans to price annual income opportunity notes with auto cap due Jan. 30, 2019 linked to a basket of 10 common stocks, according to an FWP filing with the Securities and Exchange Commission.

The underlying stocks are Dow Chemical Co., Eli Lilly and Co., Freeport-McMoRan Copper & Gold Inc., Goldcorp Inc., Kraft Foods Inc., McDonald's Corp., Paychex, Inc., Raytheon Co., Reynolds American Inc. and Verizon Communications Inc.

Interest is payable annually and will equal the average of the performances of the basket stocks, with a minimum interest rate of 1%.

A stock's performance will be equal to the auto cap rate if its return is zero or positive. The auto cap rate is expected to be at least 10% and will be set at pricing. If a stock's return is negative, its performance will be the greater of its return and negative 30%.

The payout at maturity will be par.

HSBC Securities (USA) Inc. is the agent.

The notes will price on Jan. 25 and settle on Jan. 30.

The Cusip number is 4042K1VE0.

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