By Toni Weeks
San Luis Obispo, Calif., April 1 – HSBC USA Inc. priced $3.1 million of 0% trigger return optimization securities due March 29, 2018 linked to a global fund basket, according to a 424B2 filing with the Securities and Exchange Commission.
The basket consists of the iShares MSCI Emerging Markets index fund with a 15% weight, the WisdomTree India Earnings fund with a 5% weight, the iShares MSCI Mexico Capped ETF with a 5% weight, the SPDR Euro Stoxx 50 ETF with a 25% weight, the iShares Russell 2000 ETF with a 10% weight, the S&P Midcap 400 ETF trust with a 10% weight, the Energy Select Sector SPDR fund with a 10% weight, the Financial Select Sector SPDR fund with a 10% weight and the Technology Select Sector SPDR fund with a 10% weight.
The payout at maturity will be par plus 1.5 times any gain in the basket, up to a maximum return of 37%.
If the basket finishes at or above the 80% trigger level, the payout will be par.
Otherwise, investors will be fully exposed to the basket decline.
UBS Financial Services Inc. and HSBC Securities (USA) Inc. are the agents.
| Issuer: | HSBC USA Inc.
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| Issue: | Trigger return optimization securities
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| Underlying basket: | iShares MSCI Emerging Markets index fund (15% weight), WisdomTree India Earnings fund (5% weight), iShares MSCI Mexico Capped ETF (5% weight), SPDR Euro Stoxx 50 ETF (25% weight), iShares Russell 2000 ETF (10% weight), S&P Midcap 400 ETF trust (10% weight), Energy Select Sector SPDR fund (10% weight), Financial Select Sector SPDR fund (10% weight) and Technology Select Sector SPDR fund (10% weight)
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| Amount: | $3.1 million
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| Maturity: | March 29, 2018
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| Coupon: | 0%
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| Price: | Par
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| Payout at maturity: | Par plus 150% of any basket gain, capped at 37%; par if basket falls by up to 20%; full exposure to any losses if basket finishes below trigger level
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| Initial basket level: | 100
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| Trigger level: | 80% of initial basket level
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| Pricing date: | March 27
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| Settlement date: | March 31
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| Agents: | UBS Financial Services Inc. and HSBC Securities (USA) Inc.
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| Fees: | 2.5%
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| Cusip: | 40434G742
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