HSBC plans trigger autocallable contingent yield notes on oil & gas ETF

By Marisa Wong

Morgantown, W.Va., Jan. 26 – HSBC USA Inc. plans to price trigger autocallable contingent yield notes due Jan. 31, 2020 linked to the SPDR S&P Oil & Gas Exploration & Production exchange-traded fund, according to a 424B2 filing with the Securities and Exchange Commission.

Each quarter, the notes will pay a contingent coupon at the rate of 8% per year if the ETF closes at or above the coupon barrier, 66.5% to 71.5% of the initial price, on the observation date for that quarter.

After six months, the notes will be automatically called at par of $10 if the ETF closes at or above the initial price on any observation date.

If the notes are not called and the final share price is greater than or equal to the 66.5% to 71.5% downside threshold, the payout at maturity will be par plus the contingent coupon.

Otherwise, investors will lose 1% for every 1% that ETF declines from its initial price.

HSBC Securities (USA) Inc. and UBS Financial Services Inc. are the agents.

The notes will price Jan. 29.

The Cusip number is 40435J349.

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