By Angela McDaniels
Tacoma, Wash., Nov. 29 – HSBC USA Inc. priced $8.95 million of contingent income autocallable securities due May 31, 2017 linked to the common stock of Netflix, Inc., according to a 424B2 filing with the Securities and Exchange Commission.
If Netflix shares close at or above the downside threshold level, 75% of the initial share price, on a monthly determination date, the notes will pay a contingent payment that month at an annualized rate of 15.2%.
The notes will be called at par of $10 plus the contingent coupon if Netflix shares close at or above the initial share price on any monthly 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 lose 1% for every 1% that the final share price is less than the initial share price.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.
Issuer: | HSBC USA Inc.
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Issue: | Contingent income autocallable securities
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Underlying stock: | Netflix, Inc. (Symbol: NFLX)
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Amount: | $8,954,350
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Maturity: | May 31, 2017
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Coupon: | 15.2% per year, payable monthly if Netflix shares close at or above downside threshold level on determination date for that month
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Price: | Par of $10.00
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Payout at maturity: | If final share price is greater than or equal to downside threshold level, par plus final contingent coupon; otherwise, 1% loss for every 1% that final share price is less than initial share price
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Call: | At par plus contingent coupon if Netflix shares close at or above initial share price on any monthly determination date other than final determination date
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Initial share price: | $117.41
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Downside threshold: | $88.0575, 75% of initial share price
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Pricing date: | Nov. 25
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Settlement date: | Nov. 30
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Agent: | HSBC Securities (USA) Inc.
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Distribution: | Morgan Stanley Smith Barney LLC
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Fees: | 1.25%
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Cusip: | 40435B254
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