This free writing prospectus
relates an offering of Notes linked to a basket of five common stocks (each a “Reference Stock” and the basket the
“Reference Asset”). The Notes will have the terms described in this free writing prospectus and the accompanying Stock-Linked
Underlying Supplement, prospectus supplement and prospectus. If the terms of the Notes are inconsistent with those described in
the accompanying Stock-Linked Underlying Supplement, prospectus supplement or prospectus, the terms described in this free writing
prospectus shall control.
This free writing prospectus relates an
offering of Notes linked to the Reference Stocks identified on page FWP-3. The purchaser of the Notes will acquire a senior unsecured
debt security of HSBC USA Inc. linked to five Reference Stocks. We reserve the right to withdraw, cancel or modify any offering
and to reject orders in whole or in part. Although the Notes relate to the Reference Stocks identified on page FWP-3, you should
not construe that fact as a recommendation as to the merits of acquiring an investment linked to the Reference Stocks or as to
the suitability of an investment in the Notes.
You should read this document together
with the prospectus dated March 22, 2012, the prospectus supplement dated March 22, 2012 and the Stock-Linked Underlying Supplement
dated March 22, 2012. If the terms of the Notes offered hereby are inconsistent with those described in the accompanying prospectus
supplement, prospectus or Stock-Linked Underlying Supplement, the terms described in this free writing prospectus shall control.
You should carefully consider, among other things, the matters set forth in “Risk Factors” beginning on page FWP-6
of this free writing prospectus, beginning on page S-3 of the prospectus supplement and beginning on page S-1 of the Stock-Linked
Underlying Supplement, as the Notes involve risks not associated with conventional debt securities. We urge you to consult your
investment, legal, tax, accounting and other advisors before you invest in the Notes. As used herein, references to the “Issuer”,
“HSBC”, “we”, “us” and “our” are to HSBC USA Inc.
HSBC has filed a registration statement
(including a prospectus, prospectus supplement and Stock-Linked Underlying Supplement) with the SEC for the offering to which this
free writing prospectus relates. Before you invest, you should read the prospectus, prospectus supplement and Stock-Linked Underlying
Supplement in that registration statement and other documents HSBC has filed with the SEC for more complete information about HSBC
and this offering. You may get these documents for free by visiting EDGAR on the SEC’s web site at www.sec.gov. Alternatively,
HSBC Securities (USA) Inc. or any dealer participating in this offering will arrange to send you the prospectus, prospectus supplement
and Stock-Linked Underlying Supplement if you request them by calling toll-free 1-866-811-8049.
We are using this free writing prospectus
to solicit from you an offer to purchase the Notes. You may revoke your offer to purchase the Notes at any time prior to the time
at which we accept your offer by notifying HSBC Securities (USA) Inc. We reserve the right to change the terms of, or reject any
offer to purchase, the Notes prior to their issuance. In the event of any material changes to the terms of the Notes, we will notify
you.
On the Maturity Date, for each Note you
hold, we will pay you your Principal Amount plus any Coupon due on the Maturity Date.
On each Coupon Payment Date, we will pay
you the relevant Coupon relating to the Notes. The Coupon will vary, will be calculated on the relevant Coupon Valuation Date and
will be equal to the Minimum Coupon Rate or, if applicable, the Performance-Based Coupon Rate (to be determined on the Trade Date)
plus the Minimum Coupon Rate. If, on a Coupon Valuation Date, the Reference Stock Return for
every
Reference Stock is equal
to or greater than zero, the Coupon will be the Performance-Based Coupon Rate plus the Minimum Coupon Rate. If, on a Coupon Valuation
Date, the Reference Stock Return for
any
Reference Stock is less than zero, the Coupon will be the Minimum Coupon Rate.
The Coupon Payment Dates and the Maturity Date are subject to adjustment, as described under “Additional Note Terms —
Coupon Payment Dates, Call Payment Dates and Maturity Date” in the accompanying Stock-Linked Underlying Supplement. For information
regarding the record dates applicable to the Notes, please see the section entitled “Description of Notes — Interest
and Principal Payments — Recipients of Interest Payments” on page S-11 in the accompanying prospectus supplement.
We or one of our affiliates will act as
calculation agent with respect to the Notes.
Investor Suitability
|
The Notes may be suitable for you if:
|
|
The Notes may not be suitable for you if:
|
|
|
|
|
|
}
You seek an investment that provides a full repayment of principal, subject to the credit risk of HSBC, if held to maturity,
and an annual Coupon, based on the performance of each Reference Stock, that will be equal to the Minimum Coupon Rate or, if applicable,
the Performance-Based Coupon Rate plus the Minimum Coupon Rate.
}
You believe the prices of all of the Reference Stocks will generally increase or remain equal to their Initial Prices over
the term of the Notes.
}
You are willing to accept the risk and return profile of the securities versus a conventional debt security with a comparable
maturity issued by HSBC or another issuer with a similar credit rating.
}
You believe the Coupon on the Coupon Payment Dates will be an amount sufficient to provide you with a satisfactory return
on your investment.
}
You are comfortable receiving only the Principal Amount of your Notes at maturity plus the Coupon that will not be less
than the Minimum Coupon Rate or greater than the Performance-Based Coupon Rate plus the Minimum Coupon Rate.
}
You are willing to invest in the Notes based on the sum of the Performance-Based Coupon Rate plus the Minimum Coupon Rate,
which will limit your Coupon on any Coupon Payment Date.
}
You are willing to forgo dividends or other distributions paid to holders of the Reference Stocks.
}
You do not seek an investment for which there is an active secondary market.
}
You are willing to hold the Notes to maturity.
}
You are comfortable with the creditworthiness of HSBC, as Issuer of the Notes.
|
|
}
You
seek an investment where the return is based on the actual performance of the Reference Stocks and is not limited to the Performance-Based
Coupon Rate.
}
You
believe the prices of one or more of the Reference Stocks will decrease over the term of the Notes.
}
You
are unwilling to receive only the Principal Amount of your Notes at maturity plus the Coupon that will not be less than the Minimum
Coupon Rate or greater than the Performance-Based Coupon Rate plus the Minimum Coupon Rate.
}
You
prefer the lower risk, and therefore accept the potentially lower returns, of conventional debt securities with comparable maturities
issued by HSBC or another issuer with a similar credit rating.
}
You
prefer to receive the dividends or other distributions paid on any of the Reference Stocks.
}
You
seek an investment for which there will be an active secondary market.
}
You
are unable or unwilling to hold the Notes to maturity.
}
You are not willing or are unable to assume the credit risk associated with HSBC, as Issuer of the Notes.
|
Risk Factors
We urge you to read the section “Risk
Factors” beginning on page S-3 in the accompanying prospectus supplement and on page S-1 of the accompanying Stock-Linked
Underlying Supplement. Investing in the Notes is not equivalent to investing directly in any of the Reference Stocks. You should
understand the risks of investing in the Notes and should reach an investment decision only after careful consideration, with your
advisors, of the suitability of the Notes in light of your particular financial circumstances and the information set forth in
this free writing prospectus and the accompanying Stock-Linked Underlying Supplement, prospectus supplement and prospectus.
In addition to the risks discussed below,
you should review “Risk Factors” in the accompanying prospectus supplement and Stock-Linked Underlying Supplement,
including the explanation of risks relating to the Notes described in the following sections:
|
|
}
|
“— Risks Relating to All Note Issuances” in the prospectus supplement; and
|
|
|
}
|
“— General risks related to Reference Stocks” in the Stock-Linked Underlying
Supplement.
|
You will be subject to significant risks
not associated with conventional fixed-rate or floating-rate debt securities.
The amount
of the annual Coupon is uncertain and may be as low as
the Minimum Coupon Rate
.
The amount of the annual Coupon you receive
is not fixed and will depend on the performance of each Reference Stock on the respective Coupon Valuation Dates. If the Reference
Stock Return of
any
Reference Stock is less than zero on a Coupon Valuation Date, you will receive a Coupon equal to the
Minimum Coupon Rate on the applicable Coupon Payment Date. The Minimum Coupon Rate is specified on page FWP-3.
You will not directly participate in
any appreciation in the value of Reference Stocks and your Coupon is limited to the Performance-Based Coupon Rate plus the Minimum
Coupon Rate.
You will not directly participate in any
appreciation in the value of the Reference Stocks. Instead, you will receive annual Coupons based upon the formula described under
the captions “Coupon,” “Minimum Coupon Rate” and “Performance-Based Coupon Rate” on page FWP-3.
The Coupons payable to you will be based upon whether the Reference Stocks appreciate or depreciate. Regardless of the extent to
which the prices of the Reference Stocks appreciate, the Coupon will not exceed the Performance-Based Coupon Rate plus the Minimum
Coupon Rate. The Performance-Based Coupon Rate will be not less than the rate specified on page FWP-3. Therefore, you may earn
significantly less by investing in the Notes than you would have earned by investing directly in the Reference Stocks relevant
to your Notes.
The amount payable on the Notes is not
linked to the price of the Reference Stocks at any time other than on the Coupon Valuation Dates, including the final Coupon Valuation
Date.
The return on the Notes will be based on
the Official Closing Prices of the Reference Stocks on the applicable Coupon Valuation Date, subject to postponement for non-trading
days and certain market disruption events. Even if the value of the Reference Stocks appreciates prior to the applicable Coupon
Valuation Date but then decreases on that day to prices that are at or below the Initial Prices, the Coupon payable will be limited
to the Minimum Coupon Rate, and will be less than it would have been had the Notes been linked to the value of the Reference Stocks
prior to that decrease. Although the actual price of the Reference Stocks on the stated Maturity Date or at other times during
the term of the Notes may be higher than the Official Closing Price of the Reference Stocks on any Coupon Valuation Date, the return
on the Notes will be based solely on the Official Closing Prices of the Reference Stocks on the applicable Coupon Valuation Date,
including the final Coupon Valuation Date.
The Notes are subject to the credit
risk of HSBC USA Inc.
The Notes are senior unsecured debt obligations
of the Issuer, HSBC, and are not, either directly or indirectly, an obligation of any third party. As further described in the
accompanying prospectus supplement and prospectus, the Notes will rank on par with all of the other unsecured and unsubordinated
debt obligations of HSBC, except such obligations as may be preferred by operation of law. Any payment to be made on the Notes,
including any Coupons or return of principal at maturity, depends on the ability of HSBC to satisfy its obligations as they come
due. As a result, the actual and perceived creditworthiness of HSBC may affect the market value of the Notes and, in the event
HSBC were to default on its obligations, you may not receive the amounts owed to you under the terms of the Notes.
Certain built-in costs are likely to
adversely affect the value of the Notes prior to maturity.
While the payment at maturity described
in this free writing prospectus is based on the full Principal Amount of your Notes, the original issue price of the Notes includes
the agent’s commission and the estimated cost of HSBC hedging its obligations under the Notes. As a result, the price, if
any, at which HSBC Securities (USA) Inc. will be willing to purchase Notes from you in secondary market transactions, if at all,
will likely be lower than the original issue price, and any sale prior to the maturity date could result in a substantial loss
to you. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your
Notes to maturity.
The Notes lack liquidity.
The Notes will not be listed on any securities
exchange. HSBC Securities (USA) Inc. is not required to offer to purchase the Notes in the secondary market, if any exists. Even
if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the Notes easily. Because other
dealers are not likely to make a secondary market for the Notes, the price at which you may be able to trade your Notes is likely
to depend on the price, if any, at which HSBC Securities (USA) Inc. is willing to buy the Notes.
Potential conflicts.
HSBC and its affiliates play a variety
of roles in connection with the issuance of the Notes, including acting as calculation agent and hedging our obligations under
the Notes. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially
adverse to your interests as an investor in the Notes. We will not have any obligation to consider your interests as a holder of
the Notes in taking any action that might affect the value of your Notes.
The Notes are not insured by any governmental
agency of the United States or any other jurisdiction.
The Notes are not deposit liabilities or
other obligations of a bank and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or
program of the United States or any other jurisdiction. An investment in the Notes is subject to the credit risk of HSBC, and in
the event that HSBC is unable to pay its obligations as they become due, you may not receive the full payment at maturity of the
Notes.
Tax treatment.
For a discussion of the U.S. federal income
tax consequences of your investment in the Notes, please see the discussion under “U.S. Federal Income Tax Considerations”
herein and the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement.
Description
of the Reference Stocks
bristol-myers
squibb company (bmy)
Description of Bristol-Myers Squibb
Company
Bristol-Myers
Squibb Company has stated in its filings with the SEC that it is a global biopharmaceutical company that develops, licenses, manufactures,
markets and sells pharmaceutical and nutritional products. Information filed by BMY with the SEC under the Exchange Act can be
located by reference to its SEC file number: 001-01136 or its CIK Code: 0000014272.
Historical Performance of Bristol-Myers
Squibb Company
The
following table sets forth the quarterly high and low intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Reference Stock for each quarter in the period from October 1, 2007 through March 27, 2013. We obtained the data
in these tables from the Bloomberg Professional
®
service, without independent verification by us. All historical
prices are denominated in US dollars and rounded to the nearest penny.
Historical prices of the Reference Stock should not
be taken as an indication of future performance of the Reference Stock.
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
December 31, 2007
|
$30.23
|
$26.52
|
$26.52
|
|
September 30, 2010
|
$28.00
|
$24.23
|
$27.11
|
|
March 31, 2008
|
$27.36
|
$20.11
|
$21.30
|
|
December 31, 2010
|
$27.72
|
$25.10
|
$26.48
|
|
June 30, 2008
|
$23.49
|
$19.43
|
$20.53
|
|
March 31, 2011
|
$27.96
|
$24.97
|
$26.43
|
|
September 30, 2008
|
$22.92
|
$19.70
|
$20.85
|
|
June 30, 2011
|
$29.48
|
$26.40
|
$28.96
|
|
December 31, 2008
|
$23.75
|
$16.00
|
$23.25
|
|
September 30, 2011
|
$31.90
|
$25.69
|
$31.38
|
|
March 31, 2009
|
$23.98
|
$17.24
|
$21.92
|
|
December 30, 2011
|
$35.44
|
$30.10
|
$35.24
|
|
June 30, 2009
|
$22.13
|
$18.83
|
$20.31
|
|
March 30, 2012
|
$35.44
|
$31.65
|
$33.75
|
|
September 30, 2009
|
$23.28
|
$19.19
|
$22.52
|
|
June 29, 2012
|
$35.95
|
$32.29
|
$35.95
|
|
December
31, 2009
|
$26.50
|
$21.67
|
$25.25
|
|
September 28, 2012
|
$36.34
|
$31.37
|
$33.75
|
|
March
31, 2010
|
$27.07
|
$23.49
|
$26.70
|
|
December 31, 2012
|
$34.55
|
$30.64
|
$32.59
|
|
June
30, 2010
|
$27.01
|
$22.25
|
$24.94
|
|
March 27, 2013*
|
$40.83
|
$32.17
|
$40.78
|
*
As of the date of this free writing prospectus available information for the first calendar quarter of 2013 includes data for the
period from January 2, 2013 through March 27, 2013. Accordingly, the “Quarterly High,” “Quarterly Low”
and “Quarterly Close” data indicated are for this shortened period only and do not reflect complete data for first
calendar quarter of 2013.
The
graph below illustrates the daily performance of BMY’s common stock from March 27, 2008 through March 27, 2013 based on information
from the Bloomberg Professional
®
service. The market price of the Reference Stock on March 27, 2013 was $40.78.
Past performance of the Reference Stock is not indicative of the future performance of the Reference Stock.
ConocoPhillips
(cop)
Description of ConocoPhillips
ConocoPhillips
has stated in its filings with the SEC that it explores for, produces, transports and markets crude oil, natural gas, natural gas
liquids, liquefied natural gas and butane on a worldwide basis. Information filed by COP with the SEC under the Exchange Act can
be located by reference to its SEC file number: 001-32395 or its CIK Code: 0001163165.
Historical Performance of ConocoPhillips
The
following table sets forth the quarterly high and low intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Reference Stock for each quarter in the period from October 1, 2007 through March 27, 2013. We obtained the data
in these tables from the Bloomberg Professional
®
service, without independent verification by us. All historical
prices are denominated in US dollars and rounded to the nearest penny.
Historical prices of the Reference Stock should not
be taken as an indication of future performance of the Reference Stock.
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
December 31, 2007
|
$68.53
|
$56.55
|
$67.31
|
|
September 30, 2010
|
$44.23
|
$36.64
|
$43.78
|
|
March 31, 2008
|
$68.39
|
$51.72
|
$58.10
|
|
December 31, 2010
|
$52.28
|
$43.31
|
$51.91
|
|
June 30, 2008
|
$73.15
|
$57.59
|
$71.96
|
|
March 31, 2011
|
$62.36
|
$50.70
|
$60.88
|
|
September 30, 2008
|
$72.15
|
$51.31
|
$55.84
|
|
June 30, 2011
|
$62.31
|
$53.43
|
$57.32
|
|
December 31, 2008
|
$54.93
|
$31.51
|
$39.49
|
|
September 30, 2011
|
$60.99
|
$46.04
|
$48.27
|
|
March 31, 2009
|
$43.77
|
$26.02
|
$29.85
|
|
December 30, 2011
|
$56.34
|
$44.71
|
$55.55
|
|
June 30, 2009
|
$37.13
|
$28.60
|
$32.06
|
|
March 30, 2012
|
$59.67
|
$51.84
|
$57.94
|
|
September 30, 2009
|
$35.91
|
$29.44
|
$34.43
|
|
June 29, 2012
|
$58.94
|
$50.63
|
$55.88
|
|
December
31, 2009
|
$41.26
|
$34.23
|
$38.93
|
|
September 28, 2012
|
$58.90
|
$52.84
|
$57.18
|
|
March
31, 2010
|
$41.01
|
$35.56
|
$39.01
|
|
December 31, 2012
|
$59.64
|
$53.96
|
$57.99
|
|
June
30, 2010
|
$46.14
|
$36.98
|
$37.42
|
|
March 27, 2013*
|
$62.04
|
$56.78
|
$60.38
|
*
As of the date of this free writing prospectus available information for the first calendar quarter of 2013 includes data for the
period from January 2, 2013 through March 27, 2013. Accordingly, the “Quarterly High,” “Quarterly Low”
and “Quarterly Close” data indicated are for this shortened period only and do not reflect complete data for first
calendar quarter of 2013.
The
graph below illustrates the daily performance of COP’s common stock from March 27, 2008 through March 27, 2013 based on information
from the Bloomberg Professional
®
service. The market price of the Reference Stock on March 27, 2013 was $60.38.
Past performance of the Reference Stock is not indicative of the future performance of the Reference Stock.
intel corporation
(intc)
Description of Intel Corporation
Intel
Corporation has stated in its filings with the SEC that it designs, manufactures and sells computer components and related products.
Information filed by INTC with the SEC under the Exchange Act can be located by reference to its SEC file number: 000-06217 or
its CIK Code: 0000050863.
Historical Performance of Intel
Corporation
The
following table sets forth the quarterly high and low intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Reference Stock for each quarter in the period from October 1, 2007 through March 27, 2013. We obtained the data
in these tables from the Bloomberg Professional
®
service, without independent verification by us. All historical
prices are denominated in US dollars and rounded to the nearest penny.
Historical prices of the Reference Stock should not
be taken as an indication of future performance of the Reference Stock.
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
December 31, 2007
|
$27.99
|
$24.32
|
$26.66
|
|
September 30, 2010
|
$22.25
|
$17.60
|
$19.23
|
|
March 31, 2008
|
$26.34
|
$18.05
|
$21.18
|
|
December 31, 2010
|
$22.07
|
$18.78
|
$21.03
|
|
June 30, 2008
|
$25.29
|
$20.50
|
$21.48
|
|
March 31, 2011
|
$22.20
|
$19.72
|
$20.17
|
|
September 30, 2008
|
$24.75
|
$17.27
|
$18.73
|
|
June 30, 2011
|
$23.96
|
$19.36
|
$22.16
|
|
December 31, 2008
|
$18.69
|
$12.07
|
$14.66
|
|
September 30, 2011
|
$23.39
|
$19.16
|
$21.33
|
|
March 31, 2009
|
$15.83
|
$12.05
|
$15.05
|
|
December 30, 2011
|
$25.78
|
$20.40
|
$24.25
|
|
June 30, 2009
|
$16.74
|
$14.62
|
$16.55
|
|
March 30, 2012
|
$28.44
|
$24.39
|
$28.11
|
|
September 30, 2009
|
$20.65
|
$15.78
|
$19.57
|
|
June 29, 2012
|
$29.27
|
$24.84
|
$26.65
|
|
December
31, 2009
|
$21.26
|
$18.31
|
$20.40
|
|
September 28, 2012
|
$26.90
|
$22.48
|
$22.68
|
|
March
31, 2010
|
$22.74
|
$18.96
|
$22.26
|
|
December 31, 2012
|
$23.17
|
$19.23
|
$20.63
|
|
June
30, 2010
|
$24.28
|
$19.40
|
$19.45
|
|
March 27, 2013*
|
$23.06
|
$20.10
|
$21.83
|
*
As of the date of this free writing prospectus available information for the first calendar quarter of 2013 includes data for the
period from January 2, 2013 through March 27, 2013. Accordingly, the “Quarterly High,” “Quarterly Low”
and “Quarterly Close” data indicated are for this shortened period only and do not reflect complete data for first
calendar quarter of 2013.
The
graph below illustrates the daily performance of INTC’s common stock from March 27, 2008 through March 27, 2013 based on
information from the Bloomberg Professional
®
service. The market price of the Reference Stock on March 27, 2013
was $21.83.
Past performance of the Reference Stock is not indicative of the future performance of the Reference Stock.
AT&T
inc. (T)
Description of AT&T Inc.
AT&T
Inc. has stated in its filings with the SEC that it is a communications holding company that provides local and long-distance phone
service, wireless and data communications, internet access and messaging, IP-based and satellite television, security services,
telecommunications equipment, and directory advertising and publishing. Information filed by T with the SEC under the Exchange
Act can be located by reference to its SEC file number: 001-08610 or its CIK Code:
0000732717
.
Historical Performance of AT&T
Inc.
The
following table sets forth the quarterly high and low intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Reference Stock for each quarter in the period from October 1, 2007 through March 27, 2013. We obtained the data
in these tables from the Bloomberg Professional
®
service. We have not undertaken any independent review of, or made
any due diligence inquiry with respect to, the information obtained from the Bloomberg Professional
®
service. All historical prices are denominated in US dollars and rounded to the nearest penny.
Historical
prices of the Reference Stock should not be taken as an indication of future performance of the Reference Stock.
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
December 31, 2007
|
$42.79
|
$36.25
|
$41.56
|
|
September 30, 2010
|
$29.15
|
$23.89
|
$28.60
|
|
March 31, 2008
|
$41.94
|
$32.95
|
$38.30
|
|
December 31, 2010
|
$29.55
|
$27.50
|
$29.38
|
|
June 30, 2008
|
$40.70
|
$32.64
|
$33.69
|
|
March 31, 2011
|
$30.96
|
$27.20
|
$30.60
|
|
September 30, 2008
|
$33.58
|
$27.51
|
$27.92
|
|
June 30, 2011
|
$31.93
|
$29.91
|
$31.41
|
|
December 31, 2008
|
$30.65
|
$20.90
|
$28.50
|
|
September 30, 2011
|
$31.77
|
$27.29
|
$28.52
|
|
March 31, 2009
|
$29.46
|
$21.62
|
$25.20
|
|
December 30, 2011
|
$30.30
|
$27.41
|
$30.24
|
|
June 30, 2009
|
$27.09
|
$23.38
|
$24.84
|
|
March 30, 2012
|
$31.97
|
$29.02
|
$31.23
|
|
September 30, 2009
|
$27.68
|
$23.19
|
$27.01
|
|
June 29, 2012
|
$36.00
|
$29.95
|
$35.66
|
|
December
31, 2009
|
$28.61
|
$25.00
|
$28.03
|
|
September 28, 2012
|
$38.58
|
$34.24
|
$37.70
|
|
March
31, 2010
|
$28.67
|
$24.61
|
$25.84
|
|
December 31, 2012
|
$38.43
|
$32.71
|
$33.71
|
|
June
30, 2010
|
$26.75
|
$23.78
|
$24.19
|
|
March 27, 2013*
|
$36.87
|
$32.76
|
$36.62
|
*
As of the date of this free writing prospectus available information for the first calendar quarter of 2013 includes data for the
period from January 2, 2013 through March 27, 2013. Accordingly, the “Quarterly High,” “Quarterly Low”
and “Quarterly Close” data indicated are for this shortened period only and do not reflect complete data for first
calendar quarter of 2013.
The
graph below illustrates the daily performance of T’s common stock from March 27, 2008 through March 27, 2013 based on information
from the Bloomberg Professional
®
service. The market price of the Reference Stock on March 27, 2013 was $36.62.
Past performance of the Reference Stock is not indicative of the future performance of the Reference Stock.
walgreen
co. (wag)
Description of Walgreen Co.
Walgreen
Co. has stated in its filings with the SEC that it operates retail drugstores that offer a wide variety of prescription and non-prescription
drugs as well as general goods. Information filed by WAG with the SEC under the Exchange Act can be located by reference to its
SEC file number: 001-00604 or its CIK Code: 0000104207.
Historical Performance of Walgreen
Co.
The
following table sets forth the quarterly high and low intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Reference Stock for each quarter in the period from October 1, 2007 through March 27, 2013. We obtained the data
in these tables from the Bloomberg Professional
®
service, without independent verification by us. All historical
prices are denominated in US dollars and rounded to the nearest penny.
Historical prices of the Reference Stock should not
be taken as an indication of future performance of the Reference Stock.
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
Quarter Ending
|
Quarter High
|
Quarter Low
|
Quarter Close
|
|
December 31, 2007
|
$47.24
|
$35.80
|
$38.08
|
|
September 30, 2010
|
$34.12
|
$26.27
|
$33.50
|
|
March 31, 2008
|
$38.89
|
$32.50
|
$38.09
|
|
December 31, 2010
|
$40.20
|
$33.05
|
$38.96
|
|
June 30, 2008
|
$39.00
|
$32.41
|
$32.51
|
|
March 31, 2011
|
$44.06
|
$38.45
|
$40.14
|
|
September 30, 2008
|
$37.85
|
$30.26
|
$30.96
|
|
June 30, 2011
|
$45.34
|
$40.31
|
$42.46
|
|
December 31, 2008
|
$30.96
|
$21.34
|
$24.67
|
|
September 30, 2011
|
$44.26
|
$32.00
|
$32.89
|
|
March 31, 2009
|
$28.38
|
$21.39
|
$25.96
|
|
December 30, 2011
|
$35.34
|
$30.35
|
$33.06
|
|
June 30, 2009
|
$32.20
|
$25.61
|
$29.40
|
|
March 30, 2012
|
$35.35
|
$32.32
|
$33.49
|
|
September 30, 2009
|
$38.44
|
$27.89
|
$37.47
|
|
June 29, 2012
|
$36.04
|
$28.53
|
$29.58
|
|
December 31, 2009
|
$40.69
|
$35.10
|
$36.72
|
|
September 28, 2012
|
$36.90
|
$29.35
|
$36.44
|
|
March
31, 2010
|
$37.60
|
$33.00
|
$37.09
|
|
December 31, 2012
|
$37.75
|
$31.88
|
$37.01
|
|
June
30, 2010
|
$37.95
|
$26.33
|
$26.70
|
|
March 27, 2013*
|
$47.60
|
$36.34
|
$47.24
|
*
As of the date of this free writing prospectus available information for the first calendar quarter of 2013 includes data for the
period from January 2, 2013 through March 27, 2013. Accordingly, the “Quarterly High,” “Quarterly Low”
and “Quarterly Close” data indicated are for this shortened period only and do not reflect complete data for first
calendar quarter of 2013.
The graph below illustrates the daily performance of WAG’s common stock from March 27, 2008 through
March 27, 2013 based on information from the Bloomberg Professional
®
service. The market price of the Reference
Stock on March 27, 2013 was $47.24.
Past performance of the Reference
Stock is not indicative of the future performance of the Reference Stock.
Illustrative
ExampleS
The following examples are provided for illustrative
purposes only and are hypothetical.
These examples are representative of only a few possible scenarios concerning increases
or decreases in the prices of the Reference Stocks relative to their Initial Prices and how those increases and decreases affect
the Coupons payable on the Notes.
We cannot predict the Official Closing Prices of the Reference Stocks on the Coupon Valuation
Dates. The assumptions we have made in connection with the illustrations set forth below may not reflect actual events, and you
should not take these examples as an indication or assurance of the expected performance of the Reference Stocks or the return
on the Notes.
The total payment you receive over the term of the Notes may be less than the amount that you would have received
from a conventional debt security with the same stated maturity, including those issued by HSBC.
The examples below illustrate the Coupon Payments
on a $1,000 investment in the Notes for a hypothetical range of performance for the Reference Stocks. The following results are
based solely on the assumptions outlined below. The potential returns described here show potential valuations for different Coupon
Valuation Dates during the term of the Notes. You should consider carefully whether the Notes are suitable to your investment goals.
The numbers appearing below have been rounded for ease of analysis.
|
}
|
Principal Amount:
|
$1,000
|
|
|
|
|
|
}
|
Minimum Coupon Rate:
|
0.50%
|
|
|
|
|
|
}
|
Hypothetical Performance-Based on Coupon Rate:
|
8.00% (The actual rate will be determined on the Trade Date and fixed for the duration of the Notes. The rate set on the Trade Date will not be less than 8.00% and may be greater subject to market conditions that day)
|
The actual Initial Prices will be determined
on the Pricing Date.
Example 1: The Reference Stock Return for each
Reference Stock is greater than or equal to zero on the Coupon Valuation Date
|
Reference Stock
|
Hypothetical Reference
Stock Return
|
|
BMY
|
12.00%
|
|
COP
|
2.50%
|
|
INTC
|
5.00%
|
|
T
|
1.00%
|
|
WAG
|
2.00%
|
|
Minimum Coupon Rate =
|
0.50%
|
|
|
Performance-Based Coupon Rate =
|
8.00%
|
|
|
Coupon =
|
$85.00
|
|
|
|
|
|
|
Explanation for Example 1
As illustrated above, the hypothetical Reference
Stock Return for each of the 5 Reference Stocks is greater than or equal to zero. Therefore, even though the hypothetical Reference
Stock Return for one of the Reference Stocks is greater than the Performance-Based Coupon Rate plus the Minimum Coupon Rate, the
payment will be limited to the hypothetical Performance-Based Coupon Rate of 8.00% plus the hypothetical Minimum Coupon Rate of
0.50%. Therefore, you receive a Coupon of $85.00 on the applicable Coupon Payment Date.
Example 2: The Reference Stock Return for 1 of
the 5 Reference Stocks is less than zero on the Coupon Valuation Date
|
Reference Stock
|
Hypothetical Reference
Stock Return
|
|
BMY
|
12.00%
|
|
COP
|
5.00%
|
|
INTC
|
5.00%
|
|
T
|
0.00%
|
|
WAG
|
-4.00%
|
|
Minimum Coupon Rate =
|
0.50%
|
|
|
Performance-Based Coupon Rate =
|
8.00%
|
|
|
Coupon =
|
$5.00
|
|
|
|
|
|
|
Explanation for Example 2
As illustrated above, the hypothetical Reference
Stock Return of 4 of the 5 of the Reference Stocks (BMY, COP, INTC and T) is greater than or equal to zero. However, the Reference
Stock Return of 1 of the 5 Reference Stocks (WAG) is less than zero. Because the Reference Stock Return is less than zero for one
of the Reference Stocks, the Coupon will equal the Minimum Coupon Rate. Therefore, you receive a Coupon of $5.00 on the applicable
Coupon Payment Date.
Events of Default
and Acceleration
If the Notes have become immediately due and payable
following an event of default (as defined in the accompanying prospectus), the calculation agent will determine (i) the accelerated
Payment at Maturity due and payable in the same general manner as described in Payment at Maturity in this free writing prospectus
and (ii) any accrued but unpaid interest payable. In such a case, the business day immediately preceding the date of acceleration
will be used as the Coupon Valuation Date for purposes of determining the Coupon payable on the Notes on the accelerated Maturity
Date. The accelerated Maturity Date will be the third business day following the accelerated final Coupon Valuation Date.
If such Notes have become immediately due and payable
following an event of default, you will not be entitled to any additional payments with respect to such Notes. For more information,
see “Description of Debt Securities — Senior Debt Securities — Events of Default” in the prospectus.
Supplemental Plan
of Distribution (Conflicts of Interest)
We have appointed HSBC Securities (USA) Inc., an
affiliate of HSBC, as the agent for the sales of the Notes. Pursuant to the terms of a distribution agreement, HSBC Securities
(USA) Inc. will purchase the Notes from HSBC at the price to public less the underwriting discount set forth on the cover page
of the pricing supplement to which this free writing prospectus relates, for distribution to other registered broker-dealers or
will offer the Notes directly to investors. HSBC Securities (USA) Inc. proposes to offer the Notes at the price to public set forth
on the cover page of this free writing prospectus. HSBC USA Inc. or one of our affiliates may pay varying underwriting discounts
of up to 0.50% per $1,000 Principal Amount of Notes in connection with the distribution of the Notes to other registered broker-dealers.
An affiliate of HSBC has paid or may pay in the future
an amount to broker-dealers in connection with the costs of the continuing implementation of systems to support the Notes.
In addition, HSBC Securities (USA) Inc. or another
of its affiliates or agents may use the pricing supplement to which this free writing prospectus relates in market-making transactions
after the initial sale of the Notes, but is under no obligation to make a market in the Notes and may discontinue any market-making
activities at any time without notice.
See “Supplemental Plan of Distribution (Conflicts
of Interest)” on page S-49 in the prospectus supplement.
U.S. Federal Income
Tax Considerations
You should carefully consider the matters set forth
in “U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement. The following discussion summarizes
the U.S. federal income tax consequences of the purchase, beneficial ownership, and disposition of the Notes. This summary supplements
the section “U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and supersedes it to
the extent inconsistent therewith.
There are no statutory provisions, regulations, published
rulings or judicial decisions addressing the characterization for U.S. federal income tax purposes of securities with terms that
are substantially the same as those of the Notes. We intend to treat the Notes as variable rate debt instruments for U.S. federal
income tax purposes. Pursuant to the terms of the Notes, you agree to treat the Notes as variable rate debt instruments for all
U.S. federal income tax purposes and, based on certain factual representations received from us, in the opinion of Morrison &
Foerster LLP, our special U.S. tax counsel, it is reasonable to treat the Notes as variable rate debt instruments. Assuming the
Notes are treated as variable rate debt instruments, Coupons paid on the Notes generally should be taxable to you as ordinary interest
income at the time they accrue or are received in accordance with the your regular method of accounting for U.S. federal income
tax purposes. You should review the discussion set forth in “U.S. Federal Income Tax Considerations — U.S. Federal
Income Tax Treatment of the Notes as Indebtedness for U.S. Federal Income Tax Purposes — Variable Rate Debt Instruments”
in the accompanying prospectus supplement. In general, gain or loss realized on the sale, exchange or other disposition of the
Notes will be capital gain or loss.
We will not attempt to ascertain whether any Reference
Stock Issuer would be treated as a passive foreign investment company (“PFIC”) or a United States real property holding
corporation (“USRPHC”), both as defined for U.S. federal income tax purposes. If a Reference Stock Issuer were so treated,
certain adverse U.S. federal income tax consequences might apply. You should refer to information filed with the SEC by the Reference
Stock Issuers and consult your tax advisor regarding the possible consequences to you if a Reference Stock Issuer is or becomes
a PFIC or a USRPHC.
Because there are no statutory provisions, regulations,
published rulings or judicial decisions addressing the characterization for U.S. federal income tax purposes of securities with
terms that are substantially the same as those of the Notes, other characterizations and treatments are possible. As a result,
the timing and character of income in respect of the Notes might differ from the treatment described above. For example, the Notes
may be treated as “contingent payment debt instruments” for U.S. federal income tax purposes, subject to taxation under
the “noncontingent bond method,” as described in the discussion under “U.S. Federal Income Tax Considerations
— U.S. Federal Income Tax Treatment of the Notes as Indebtedness for U.S. Federal Income Tax Purposes — Contingent
Payment Debt Instruments” in the accompanying prospectus supplement. You should carefully consider the discussion of all
potential tax consequences as set forth in “U.S. Federal Income Tax Considerations” in the accompanying prospectus
supplement.
Withholding and reporting requirements under the
legislation enacted on March 18, 2010 (as discussed beginning on page S-48 of the prospectus supplement) will generally apply to
payments made after December 31, 2013. However, this withholding tax will not be imposed on payments pursuant to obligations outstanding
on January 1, 2014. Additionally, withholding due to any payment being treated as a “dividend equivalent” (as discussed
beginning on page S-47 of the prospectus supplement) will begin no earlier than January 1, 2014. Holders are urged to consult with
their own tax advisors regarding the possible implications of this recently enacted legislation on their investment in the Notes.
PROSPECTIVE PURCHASERS OF THE NOTES SHOULD CONSULT
THEIR TAX ADVISORS AS TO THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE NOTES.
|
TABLE OF CONTENTS
|
|
|
You should only rely on the
information contained in this free writing prospectus, the accompanying Stock-Linked Underlying Supplement, prospectus supplement
and prospectus. We have not authorized anyone to provide you with information or to make any representation to you that is not
contained in this free writing prospectus, the accompanying Stock-Linked Underlying Supplement, prospectus supplement and prospectus.
If anyone provides you with different or inconsistent information, you should not rely on it. This free writing prospectus, the
accompanying Stock-Linked Underlying Supplement, prospectus supplement and prospectus are not an offer to sell these Notes, and
these documents are not soliciting an offer to buy these Notes, in any jurisdiction where the offer or sale is not permitted. You
should not, under any circumstances, assume that the information in this free writing prospectus, the accompanying Stock-Linked
Underlying Supplement, prospectus supplement and prospectus is correct on any date after their respective dates.
HSBC USA Inc.
$ 6
Year Income Plus Notes with
a 0.50% Minimum Annual Coupon
April
1, 2013
FREE
WRITING PROSPECTUS
|
|
|
|
|
|
Free Writing Prospectus
|
|
|
|
General
|
FWP-5
|
|
|
Payment at Maturity
|
FWP-5
|
|
|
Investor Suitability
|
FWP-6
|
|
|
Risk Factors
|
FWP-6
|
|
|
Description of the Reference Stocks.
|
FWP-8
|
|
|
Illustrative Examples
|
FWP-13
|
|
|
Events of Default and Acceleration
|
FWP-15
|
|
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
FWP-15
|
|
|
U.S. Federal Income Tax Considerations
|
FWP-16
|
|
|
|
|
|
|
Stock-Linked Underlying Supplement
|
|
|
|
Risk Factors
|
S-1
|
|
|
Additional Note Terms
|
S-5
|
|
|
Information Regarding the Reference Stocks and the Reference Stock Issuers
|
S-11
|
|
|
|
|
|
|
Prospectus Supplement
|
|
|
|
Risk Factors
|
S-3
|
|
|
Risks Relating to Our Business
|
S-3
|
|
|
Risks Relating to All Note Issuances
|
S-3
|
|
|
Pricing Supplement
|
S-7
|
|
|
Description of Notes
|
S-8
|
|
|
Use of Proceeds and Hedging
|
S-30
|
|
|
Certain ERISA Considerations
|
S-30
|
|
|
U.S. Federal Income Tax Considerations
|
S-32
|
|
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
S-49
|
|
|
|
|
|
|
Prospectus
|
|
|
|
About this Prospectus
|
1
|
|
|
Risk Factors
|
1
|
|
|
Where You Can Find More Information
|
1
|
|
|
Special Note Regarding Forward-Looking Statements
|
2
|
|
|
HSBC USA Inc.
|
3
|
|
|
Use of Proceeds
|
3
|
|
|
Description of Debt Securities
|
3
|
|
|
Description of Preferred Stock
|
15
|
|
|
Description of Warrants
|
21
|
|
|
Description of Purchase Contracts
|
25
|
|
|
Description of Units
|
28
|
|
|
Book-Entry Procedures
|
30
|
|
|
Limitations on Issuances in Bearer Form
|
35
|
|
|
U.S. Federal Income Tax Considerations Relating to Debt Securities
|
35
|
|
|
Plan of Distribution (Conflicts of Interest)
|
51
|
|
|
Notice to Canadian Investors
|
53
|
|
|
Notice to EEA Investors
|
58
|
|
|
Certain ERISA Matters
|
59
|
|
|
Legal Opinions
|
60
|
|
|
Experts
|
60
|
|
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