HSBC plans contingent income barrier notes on biotech, health care ETFs

By Marisa Wong

Morgantown, W.Va., Feb. 23 – HSBC USA Inc. plans to price autocallable contingent income barrier notes due March 1, 2021 linked to the SPDR S&P Biotech exchange-traded fund and the Health Care Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.

If each asset closes at or above its coupon trigger, 70% of its initial price, on a quarterly observation date, the notes will pay a contingent coupon that quarter at an annual rate of 8% to 9%.

The notes will be called at par plus the contingent coupon if each asset closes at or above its initial price on any quarterly observation date after six months.

The payout at maturity will be par plus the contingent coupon unless any asset finishes below the 70% barrier level, in which case investors will lose 1% for each 1% decline of the worst performing asset from its initial price.

HSBC Securities (USA) Inc. is the agent.

The notes will price on Feb. 26.

The Cusip number is 40435FUD7.

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