By Toni Weeks
San Luis Obispo, Calif., March 24 – HSBC USA Inc. priced $7.41 million of contingent income autocallable securities due March 24, 2016 linked to the common stock of Dow Chemical Co., according to a 424B2 filing with the Securities and Exchange Commission.
If Dow Chemical shares close at or above the downside threshold level, 80% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment that quarter at an annualized rate of 8.6%.
The notes will be called at par of $10 plus the contingent coupon if Dow Chemical shares close at or above the initial share price on any quarterly determination date other than the final determination date.
If the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will receive a number of Dow Chemical shares equal to $10 divided by the initial share price or, at the issuer’s option, an amount in cash equal to the value of those shares.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | Dow Chemical Co. (Symbol: DOW)
|
| Amount: | $7,411,000
|
| Maturity: | March 24, 2016
|
| Contingent payment: | 8.6% per year if Dow Chemical stock closes at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10
|
| Payout at maturity: | Par plus contingent coupon if Dow Chemical stock finishes at or above downside threshold; otherwise a number of Dow Chemical shares equal to $10 divided by initial share price or, at issuer’s option, cash value of those shares
|
| Call: | At par plus contingent payment if Dow Chemical stock closes at or above initial share price on any of first three determination dates
|
| Initial share price: | $47.29
|
| Downside threshold level: | $37.83, 80% of initial price
|
| Pricing date: | March 20
|
| Settlement date: | March 25
|
| Agent: | HSBC Securities (USA) Inc.
|
| Dealer: | Morgan Stanley Smith Barney LLC
|
| Fees: | 1.75%
|
| Cusip: | 40434G502
|
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