By Marisa Wong
Morgantown, W.Va., Feb. 1 – HSBC USA Inc. priced $11.59 million contingent income autocallable securities due Feb. 1, 2018 linked to the SPDR S&P Oil & Gas Exploration & Production exchange-traded fund, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annual rate of 9.25% if the fund closes at or above its downside threshold, 70% of its initial level, on a quarterly review date.
The notes will be called at par if the fund closes at or above its initial level on any of the first three determination dates.
The payout at maturity will be par plus the contingent coupon unless the fund finishes below its 70% downside threshold, in which case investors will be fully exposed to any losses.
HSBC Securities (USA) Inc. is the agent with Morgan Stanley Smith Barney LLC handling distribution.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable securities
|
| Underlying ETF: | SPDR S&P Oil & Gas Exploration & Production ETF
|
| Amount: | $11,588,560
|
| Maturity: | Feb. 1, 2018
|
| Coupon: | 9.25% per year, payable quarterly if ETF shares close at or above downside threshold level on determination date for that quarter
|
| Price: | Par of $10.00
|
| Payout at maturity: | If final price is greater than or equal to downside threshold, par plus final contingent coupon; otherwise, 1% loss for every 1% that final price is less than initial price
|
| Call: | At par plus contingent coupon if ETF shares close at or above initial share price on any of first three quarterly determination dates
|
| Initial share price: | $41.30
|
| Downside threshold: | $28.91, 70% of initial share price
|
| Pricing date: | Jan. 27
|
| Settlement date: | Feb. 1
|
| Agent: | HSBC Securities (USA) Inc.
|
| Distribution: | Morgan Stanley Smith Barney LLC
|
| Fees: | 1.75%
|
| Cusip: | 40435C518
|
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