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HSBC plans dual directional knock-out notes due 2013 linked to S&P 500
By Marisa Wong
Madison, Wis., April 4 - HSBC USA Inc. plans to price 0% dual directional knock-out notes due April 24, 2013 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.
A knock-out event occurs if the index closes below the initial level by more than 18% on any day during the life of the notes.
If the index finishes above the initial level, the payout at maturity will be par plus the gain, up to a maximum return of at least 15%. The exact cap will be set at pricing.
If the index finishes below the initial level and a knock-out event has not occurred, the payout will be par plus the absolute value of the index return.
Otherwise, investors will be exposed to any losses.
HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the placement agent.
The notes (Cusip: 4042K1D67) will price on April 5 and settle on April 11.
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