By Toni Weeks
San Luis Obispo, Calif., Feb. 26 - HSBC USA Inc. priced $8.54 million of contingent income autocallable step-up securities due Feb. 28, 2028 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon if the index closes at or above the 70% coupon barrier level on the determination date for that quarter. Otherwise no coupon will be paid for that quarter. The coupon is 5.5% initially and steps up to 6.5% on Feb. 28, 2018 and to 10% on Feb. 28, 2023.
The notes will be called if the index closes at or above its initial level on any quarterly call date after five years.
If the index finishes at or above the downside threshold level, 50% of the initial level, the payout at maturity will be par. If the index finishes above the coupon barrier, the payout will be par plus the contingent coupon.
If the index finishes below the downside threshold level, investors will be fully exposed to the index decline.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Contingent income autocallable step-up securities
|
| Underlying index: | S&P 500
|
| Amount: | $8,535,000
|
| Maturity: | Feb. 28, 2028
|
| Coupon: | Contingent quarterly coupon paid only if index closes at or above barrier level on determination date for that quarter; coupon initially is 5.5%, stepping up to 6.5% on Feb. 28, 2018 and to 10% on Feb. 28, 2023
|
| Price: | Par of $1,000
|
| Payout at maturity: | Par plus coupon if index finishes at or above coupon barrier level; if index finishes below coupon barrier but at or above downside threshold level, par; otherwise full exposure to losses
|
| Call: | At par plus contingent coupon if index closes at or above initial level on any quarterly call date beginning Feb. 28, 2018
|
| Initial level: | 1,515.60
|
| Coupon barrier level: | 1,060.92, 70% of initial level
|
| Downside threshold level: | 757.80, 50% of initial level
|
| Pricing date: | Feb. 22
|
| Settlement date: | Feb. 28
|
| Agent: | HSBC Securities (USA) Inc.
|
| Fees: | 3.5%
|
| Cusip: | 40432XBD2
|
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