HSBC plans seven-year annual income opportunity notes on 10 stocks

By Susanna Moon

Chicago, March 2 - HSBC USA Inc. plans to price annual income opportunity notes with auto cap due March 28, 2019 linked to a basket of 10 common stocks, according to a 424B2 filing with the Securities and Exchange Commission.

The underlying companies are Dow Chemical Co., Eli Lilly and Co., Freeport-McMoRan Copper & Gold Inc., Goldcorp Inc., Kraft Foods Inc., McDonald's Corp., Paychex, Inc., Raytheon Co., Reynolds American Inc. and Verizon Communications Inc.

Interest is payable annually and will equal the average of the performances of the basket stocks. The coupon will be at least 1%.

A stock's performance will be equal to the auto cap rate if its return is greater than or equal to zero. The auto cap rate will be at least 8.5% and will be set at pricing. If a stock's return is less than zero, its performance will be the greater of its return and negative 25%.

The payout at maturity will be par.

HSBC Securities (USA) Inc. is the agent.

The notes will price on March 23 and settle on March 28.

The Cusip number is 4042K1ZC0.

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