HSBC plans phoenix quarterly review notes on Brazilian real vs. dollar

By Marisa Wong

Morgantown, W.Va., Aug. 4 – HSBC USA Inc. plans to price phoenix quarterly review notes due Aug. 14, 2017 linked to the performance of the Brazilian real relative to the dollar, according to an FWP filing with the Securities and Exchange Commission.

If the spot rate is at or below the coupon barrier, 140% of the initial spot rate, on a quarterly observation date, the notes will pay a contingent coupon for that quarter. Otherwise, no coupon will be paid that quarter. The contingent coupon rate is 7.55% per year.

If the spot rate is at or below the initial spot rate on any quarterly observation date, the notes will be called at par plus the contingent coupon.

If the notes are not called and the final spot rate is at or below the trigger rate, 140% of the initial rate, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will be fully exposed to any losses.

In other words, if the real decreases in value compared to the dollar, investors may experience loss.

HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC and JPMorgan Chase Bank NA are the placement agents.

The notes will price on Aug. 5.

The Cusip number is 40433UTG1.

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