HSBC intends to price contingent income autocallables tied to Valero

By Devika Patel

Knoxville, Tenn., Jan. 30 – HSBC USA Inc. plans to price contingent income autocallable securities due Feb. 6, 2020 linked to the common stock of Valero Energy Corp., according to an FWP filing with the Securities and Exchange.

If Valero shares close at or above the downside threshold level, 70% of the initial level, on any quarterly determination date, the notes will pay a contingent payment that quarter at an annualized rate of at least 12.5%.

Beginning May 3, 2017, the notes will be called at par of $10 plus the contingent coupon if Valero shares close at or above the initial share price on any of the first 11 determination dates.

If the final share price is greater than or equal to the downside threshold level, 70% of the initial level, the payout at maturity will be par plus the final contingent coupon. Otherwise, investors will lose 1% for each 1% decline of the stock.

HSBC Securities (USA) Inc. is the agent, with Morgan Stanley Wealth Management handling distribution.

The notes (Cusip: 40435C443) will price on Feb. 3 and settle three business days after pricing.

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