HSBC plans callable contingent income notes linked to S&P 500

By Angela McDaniels

Tacoma, Wash., Feb. 19 – HSBC USA Inc. plans to price callable contingent income securities due March 4, 2026 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a coupon at the rate of at least 9.1% per year if the index closes at or above the coupon barrier level, 75% of the initial index level, on the observation date for that quarter.

If the index finishes at or above the downside threshold level, 60% of its initial level, the payout at maturity will be par of $10 plus the final coupon, if applicable. If the index finishes below the knock-in level, investors will be fully exposed to the index’s decline.

Beginning March 3, 2017, the notes will be callable at par on any interest payment date.

HSBC Securities (USA) Inc. is the agent. Distribution is through Morgan Stanley Wealth Management.

The notes will price Feb. 29.

The Cusip number is 40434N747.

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