HSBC plans contingent income autocallables linked to Charles Schwab

By Angela McDaniels

Tacoma, Wash., Oct. 7 – HSBC USA Inc. plans to price contingent income autocallable securities due Oct. 14, 2022 linked to the common stock of Charles Schwab Corp., according to an FWP filing with the Securities and Exchange Commission.

If Charles Schwab shares close at or above the downside threshold level, 70% of the initial share price, on a quarterly determination date, the notes will pay a contingent payment that quarter at an annualized rate of at least 10.5%. The exact rate will be set at pricing.

The notes will be called at par of $10 if Charles Schwab shares close at or above the initial share price on any of the second through 11th quarterly determination dates.

The payout at maturity will be par unless the final share price is less than the downside threshold level, in which case investors will lose 1% for every 1% that the final share price is less than the initial share price.

HSBC Securities (USA) Inc. is the agent and will receive a 2.5% fee. It will pay Morgan Stanley Wealth Management a 2% sales commission and a 0.5% structuring fee for each note sold.

The notes are expected to price Oct. 11.

The Cusip number is 40438B798.

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