Published on 7/24/2018 in the Prospect News Structured Products Daily.
New Issue: HSBC prices $1.27 million 8.25% contingent income barrier autocalls on two funds
By Susanna Moon
Chicago, July 24 – HSBC USA Inc. priced $1.27 million of autocallable contingent income barrier notes due July 25, 2023 linked to the lesser performing of the Financial Select Sector SPDR Fund and SPDR S&P Oil & Gas Exploration & Production ETF, according to an FWP filing with the Securities and Exchange Commission.
The notes will pay a contingent monthly coupon at an annual rate of 8.25% if each underlying fund closes at or above its 65% coupon barrier on the observation date for that month.
The notes will be called at par plus the contingent coupon if each fund closes at or above its initial share price on any quarterly call observation date after six months.
The payout at maturity will be par unless either fund finishes below its 60% trigger level, in which case investors will be fully exposed to any losses of the worst performing fund.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
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| Issue: | Autocallable contingent income barrier notes
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| Underlying funds: | Financial Select Sector SPDR Fund and SPDR S&P Oil & Gas Exploration & Production ETF
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| Amount: | $1,265,000
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| Maturity: | July 25, 2023
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| Coupon: | 8.25%, payable monthly if fund stock closes at or above 65% coupon barrier on observation date for that month
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| Price: | Par
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| Payout at maturity: | Par unless either fund finishes below 60% trigger, in which case 1% loss per 1% decline of worst performing fund
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| Call: | At par if each fund closes at or above initial level on any determination date beginning Jan. 22, 2019
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| Initial levels: | $27.56 for financial fund, $42.50 for oil fund
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| Coupon barriers: | $17.914 for financial fund, $27.625 for oil fund, 65% of initial levels
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| Trigger levels: | $16.536 for financial fund, $25.50 for oil fund, 60% of initial levels
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| Pricing date: | July 20
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| Settlement date: | July 25
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 2%
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| Cusip: | 40435FQ42
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