HSBC adjusts coupon for range accrual autocallables tied to stocks

By Toni Weeks

San Luis Obispo, Calif., May 14 - HSBC USA Inc. altered the coupon for its upcoming issue of autocallable buffered range accrual notes due May 22, 2018 linked to a basket of stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket includes equal weights of BHP Billiton Ltd., Freeport-McMoRan Copper & Gold Inc. and Rio Tinto plc.

Interest will now accrue at an annualized rate of 5.5% to 6.5% for each day that the basket level is greater than the accrual level, 80% of the initial basket level. When the offer was announced, HSBC said the interest would be about 6.7%. Interest is payable quarterly. The exact rate will be set at pricing.

The notes will be automatically called at par if the basket closes at or above its initial level on any annual call observation date beginning May 19, 2014.

If the notes are not called, the payout at maturity will be par if basket finishes at or above the 80% buffer level. Investors will lose 1% for each 1% decline in the basket level beyond the 20% buffer.

HSBC Securities (USA) Inc. is the agent.

The notes (Cusip: 40432XFJ5) are expected to price May 17 and settle May 22.

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