HSBC intends to price contingent income autocallables tied to Tesla

By Devika Patel

Knoxville, Tenn., Feb. 17 – HSBC USA Inc. plans to price contingent income autocallable securities due March 1, 2018 linked to the common stock of Tesla, Inc., according to an FWP filing with the Securities and Exchange.

If Tesla shares close at or above the downside threshold level, 60% 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 9.5%. The exact coupon will be set at pricing.

The notes will be called at par of $10 plus the contingent coupon if Tesla shares close at or above the initial share price on May 24, 2017, Aug. 24, 2017 or Nov. 24, 2017.

If the final share price is greater than or equal to the downside threshold level, 60% 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. 24 and settle three business days after pricing.

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