HSBC 1 Year FX-Linked Binary Range Deposit Notes (the 'Notes') are principal protected deposit notes issued by HSBC. If held to maturity, the Notes will pay:
- 100 per cent of the principal amount invested; and
- A contingent coupon, if payable, of eight per cent of the principal amount or $8.00 per Note, if a 'kick-out event' (as defined below) does not occur during the observation period. A kick-out event occurs if the exchange rate (as defined below) equals the upper or lower barrier level of the binary range or falls outside the binary range at any time during the observation period. The contingent coupon is only payable if, the exchange rate remains within the binary range at all times during the observation period. See 'Description of the Notes – contingent coupon'
Exchange rate: USD-CAD exchange rate. The number of Canadian dollars per one United States dollar.
Binary range: 0.9400 - 1.100
Contingent coupon: The 'contingent coupon', if payable, will be six per cent of the principal amount or $6.00 per Note payable on the maturity date (subject to the occurrence of a special circumstance). The contingent coupon will only be payable if a kick-out event does not occur at any time during the observation period. The contingent coupon will be payable at maturity if the exchange rate remains within the binary range at all times during the observation period. See 'Description of the Notes – contingent coupon'.
||27 May 2008
||27 March 2009
Are the Notes right for you?
The Notes may be an appropriate investment for you, if, among other things: (1) you are looking for safety of principal if held to maturity; (2) want exposure to an investment that is linked to the performance of Asian equities while tracking the performance of generally recognized Asian market indices; (3) want to diversify your exposure to more than one Asian equity index; and (4) you believe that Asian equity markets will appreciate.
The term of the Notes is uncertain in that HSBC may call all of the Notes on either call date. If the Notes are not called by HSBC, the principal amount of a Note will be repaid only if the Note is held to maturity. In addition, if the Notes are not called by HSBC on either call date then the return, if any, will be uncertain until maturity and will depend on the performance of the index basket. It is possible that the Notes could produce no yield at maturity. As a result, the Notes are not suitable for investors requiring or expecting certainty of yield or term.
Early trading charges/secondary market
During the term of the Notes, you may inquire as to the net asset value of a Note and how it relates to the return that may be payable under the Notes by contacting HSBC at +1 866 511 4722. HSBC Securities (Canada) Inc intends, in normal market conditions, but is under no obligation, to use reasonable efforts to provide a secondary price for the Notes as principal, but reserves the right not to do so in the future in its sole discretion, without providing prior notice to the Noteholders.
Noteholders should carefully review and consider all risks set forth in the offering document with their investment adviser, including:
- Asian equity market exposure
- The return on the Notes, if called, may be less than if HSBC had not called the Notes and the Notes remained outstanding until maturity
- The decision to call or not to call the Notes will be made solely by HSBC and may not be advantageous to Noteholders
- If the Notes have not been called by HSBC on either call date, Noteholders only participate in 60 per cent of the upside performance of the index basket
- Notes will not constitute insured deposits under Canada Deposit Insurance Corporation Act (Canada)
- The principal amount is protected only if Notes are held to maturity and there is no assurance the Notes will pay any variable return
- No guaranteed secondary market
- Price or other movements in the instruments comprising the indices are unpredictable
- The historical or pro forma performance of each index is not an indication of future performance
- An extraordinary event
- Conflicts of interest with the calculation agent
Amendments to Notes - The global deposit note filed on CDS representing the Notes may be amended without the consent of the holders by the Bank if, in the reasonable opinion of the Bank, the amendment would not materially and adversely affect the interests of the holders. In other cases, the global deposit note may be amended if the amendment is approved by a resolution passed by the favourable votes of the holders of not less than 662/3 per cent of the Notes. A copy of the global note is available on request.
Please see the information statement for further details. Please do not hesitate to call us at +1 866 511 4722 or send us an
e-mail for more information.
Important: Please read the disclaimer carefully.