HSBC plans contingent income step-up autocallables tied to S&P 500

By Toni Weeks

San Luis Obispo, Calif., Feb. 8 - HSBC USA Inc. plans to price contingent income autocallable step-up securities due Feb. 28, 2028 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will pay a contingent quarterly coupon if the index closes at or above the 70% coupon barrier level on the determination date for that quarter. The coupon will initially be 5.5% per year, stepping up to 6.5% on Feb. 28, 2018 and to 10% on Feb. 28, 2023.

After five years, the notes are callable at par plus the coupon if the index closes at or above the initial index level on any quarterly determination date.

If the notes are not called, the payout at maturity will be par plus the contingent quarterly payment if the shares finish at or above the 50% downside threshold level. Otherwise, investors will be fully exposed to the index decline.

The notes (Cusip: 40432XBD2) will price Feb. 22 and settle Feb. 28.

The agent is HSBC Securities (USA) Inc.

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