Published on 6/5/2012 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $1.09 million phoenix quarterly review notes linked to Caterpillar
By Angela McDaniels
Tacoma, Wash., June 5 - HSBC USA Inc. priced $1.09 million of phoenix quarterly review notes due June 19, 2013 linked to the common stock of Caterpillar Inc., according to a 424B2 filing with the Securities and Exchange Commission.
If Caterpillar stock closes at or above the trigger level on a quarterly observation date, the issuer will pay a 4.5% contingent coupon for that quarter, which is equivalent to 18% per year. The trigger level is 75% of the initial share price.
If the shares close at or above the initial share price on any quarterly observation date, the notes will be called at par of $10 plus the contingent coupon.
If the notes are not called and Caterpillar shares finish at or above the trigger level, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will be fully exposed to the decline in the share price.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is dealer.
| Issuer: | HSBC USA Inc.
|
| Issue: | Phoenix quarterly review notes
|
| Underlying stock: | Caterpillar Inc. (Symbol: CAT)
|
| Amount: | $1,085,000
|
| Maturity: | June 19, 2013
|
| Coupon: | If Caterpillar shares close at or above trigger level on quarterly observation date, issuer will pay 18% annualized contingent coupon for that quarter
|
| Price: | Par of $10.00
|
| Payout at maturity: | Par plus contingent coupon if Caterpillar shares finish at or above trigger level; otherwise, full exposure to decline
|
| Call: | At par plus contingent coupon if Caterpillar shares close at or above initial share price on Sept. 14, 2012, Dec. 14, 2012, March 14, 2013 or June 14, 2013
|
| Initial share price: | $85.52
|
| Trigger price: | $64.14, 75% of initial share price
|
| Pricing date: | June 1
|
| Settlement date: | June 6
|
| Underwriter: | HSBC Securities (USA) Inc.
|
| Dealer: | J.P. Morgan Securities LLC
|
| Fees: | 1%
|
| Cusip: | 4042K1R70
|
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