HSBC Buffered "Accelerated Market Participation" Notes, Series 1

Matured price*: 100.00 %
Maturity date: 13 July 2012

HSBC Buffered "Accelerated Market Participation" Notes, Series 1 (the 'Note Securities') are principal at risk Note Securities issued by HSBC. The return on the Note Securities is linked to the change in the value (positive or negative) of the S&P/TSX60® Index (the 'Reference Index'). The performance (positive or negative) of the Reference Index will be measured from its Initial Index Level to the Final Index Level in order to calculate the Reference Index Return. The Reference Index Return will be used to determine the Maturity Payment Amount. No interest or other amount will be paid during the Term of the Note Securities.

Key features

Issue date: 13 January 2010
Maturity date: 13 July 2012
Note term: 1.5 years
CUSIP #: CA40427HRY13
Currency: CAD
Upside Participation Rate: 200%
Maximum Cap: 12%
Buffer Value: -15%
Selling agent fees: CAD1.00 per Note Security

Highlights

  • Non-Principal Protected: 85% of an Investor's Principal investment is fully exposed
  • Private Placement: Available to Accredited Investors Only
  • Eligible for registered accounts

Maturity Payment Amount Scenarios

Positive Reference Index Return

If the Reference Index Return is calculated to be greater than 0.00% on the Final Valuation Date, Investors will be entitled to receive at maturity a Maturity Payment Amount per Note Security equal:

Principal Amount + (Principal Amount * Return)

The Return will be a number expressed as a percentage, calculated as:

Participation Rate * the Reference Index Return

The Return is subject to the Cap and cannot exceed 12%, regardless of the extent, if at all, that the actual percentage increase in the price performance of the Reference Index or the Reference Index Return may exceed 12%. Therefore, the maximum amount of cumulative interest that may be payable is CAD12.00 per Note Security if held to maturity.

Negative Reference Index Return

a)If the Reference Index Return is calculated to be less than 0% and greater than or equal to -15%, an Investor will receive 100% of the Principal Amount invested per Note Security.

b) If the Reference Index Return is calculated to be less than the Buffer Value, an Investor will receive a Maturity Payment Amount per Note Security equal to:

Principal Amount + (Principal Amount * (Reference Index Return + 15%))

If the Reference Index Return is calculated to be less than the Buffer Value, an Investor will lose 1% of the Principal Amount invested per Note Security for every 1% that the Reference Index Return is calculated to be less than the Buffer Value. As a result, if the Reference Index Return is calculated to be less than the Buffer Value, an Investor will receive less than their original Principal Amount invested, to a minimum of 15% of their Principal Amount.

Underlying asset(s)

Index Ticker Initial Index Level
S&P/TSX60® Index SPTSX60 762.59

Early trading charge/Secondary market

As a result of hold periods and resale restrictions under applicable securities laws, the Investors will not be able to sell their Note Securities within the first four (4) months following the Issue Date except in compliance with applicable securities laws.

Thereafter, HSBC Securities intends, in normal market conditions, but is under no obligation, to use reasonable efforts to make a secondary price for the Note Securities as principal (which price will be determined in the sole discretion of HSBC Securities), and to obtain prices upon which third parties may be prepared to purchase Note Securities in any available secondary market, but reserves the right not to do so in the future in its sole discretion, without providing prior notice to the Investors. If a secondary market develops, it may be suspended or discontinued at any time without notice to Investors. After the 4 month hold period (16 May 2011) following the Issue Date, any sales of the Note Securities prior to maturity will NOT be subject to an early trading charge.

Additional information

Please do not hesitate to call us at +1 866 511 4722 or send us an e-mail for more information.

*The secondary market price for a Note Security, if available, represents the bid price of such Note Security as a percentage (%) of the original principal amount invested. The bid price stated is only as of the date indicated.