HSBC eyes autocallable contingent income barrier notes tied to stocks

By Devika Patel

Knoxville, Tenn., July 2 – HSBC USA Inc. plans to price autocallable contingent income barrier notes due July 11, 2025 linked to the lesser performing of the common stocks of International Business Machines Corp. and Intel Corp., according to an FWP filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon if each stock closes at or above its coupon trigger level, 60% of its initial share price, on the observation date for that quarter. The contingent coupon rate is expected to be at least 9.85% per year and will be set at pricing.

The notes will be called at par plus the contingent coupon if each stock closes at or above its initial share price on any quarterly call observation date beginning on July 8, 2019.

The payout at maturity will be par plus the final coupon unless either stock finishes below its 60% barrier level, in which case investors will lose 1% for each 1% decline of the worst-performing stock from its initial level.

HSBC Securities (USA) Inc. is the agent.

The notes (Cusip: 40435FM61) will price on July 6 and settle on July 11.

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