By Susanna Moon
Chicago, Feb. 10 – HSBC USA Inc. priced $4.48 million of contingent income autocallable securities due Feb. 6, 2020 linked to Valero Energy Corp. stock, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly coupon at an annualized rate of 10.5% if the stock closes at or above the downside threshold level, 70% of the initial share price, on a determination date for that quarter.
The notes will be called at par of $10 plus the contingent coupon if the shares close at or above the initial share price on any of the first 11 determination dates.
The payout at maturity will be par unless the stock finishes below its 70% downside threshold, in which case investors will be fully exposed to any losses.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney LLC is handling distribution.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent income autocallable securities
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| Underlying stock: | Valero Energy Corp. (Symbol: VLO)
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| Amount: | $4,478,360
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| Maturity: | Feb. 6, 2020
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| Coupon: | 10.5% per year, payable quarterly if Valero shares close at or above downside threshold level on determination date for that quarter
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| Price: | Par of $10.00
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| Payout at maturity: | If stock finishes at or above downside threshold, par; otherwise, full exposure to any losses
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| Call: | At par plus contingent coupon if shares close at or above initial share price on any of the first 11 determination dates
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| Initial share price: | $65.51
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| Downside threshold: | $45.857, 70% of initial share price
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| Pricing date: | Feb. 3
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| Settlement date: | Feb. 8
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| Agent: | HSBC Securities (USA) Inc.
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| Distribution: | Morgan Stanley Smith Barney LLC
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| Fees: | 2%
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| Cusip: | 40435C443
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