HSBC Buffered 'Accelerated Market Participation' Notes, Series 2 (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.
||29 July 2011
||29 July 2014
|Upside Participation Rate:
|Selling agent fees:
||CAD2.00 per Note Security
- 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 to the Principal Amount plus the product of the Principal Amount multiplied by the Return, according to the following formula:
Principal Amount + (Principal Amount x Return)
The Return will be a number expressed as a percentage, calculated as the product of a) the Participation Rate multiplied by b) the Reference Index Return, according to the following formula:
Participation Rate x the Reference Index Return
The Return is subject to the Cap and cannot exceed 29%, 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 29%. Therefore, the maximum amount of cumulative interest that may be payable is CAD29.00 per Note Security if held to maturity. See 'Risk Factors'.
Negative Reference Index Return
a) If the Reference Index Return is calculated to be less than or equal to 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 the Principal Amount plus the product of i) Principal Amount multiplied by ii) the Reference Index Return plus 15%, according to the following formula:
Principal Amount + (Principal Amount x (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.
||Initial Index Level
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 four-month hold period (30 November 2011) following the Issue Date, any sales of Notes prior to maturity may be subject to an 'Early Trading Charge' which will be equal to a percentage of the Principal Amount and will be determined as follows:
||Early Trading Charge
|30 November 2011 to and including 28 January 2012
|29 January 2012 to and including 28 July 2012
|29 July 2012 to and including the Maturity Date
During the term of the Notes, you may inquire as to the net asset value of a Note or the level of the underlying Index and how it relates to the Variable Return that may be payable under the Notes, if any, by contacting HSBC at the number below.
Please see the Information Statement for further details or contact your investment advisor.
Please do not hesitate to call us at +1 866 511 4722 or send us an e-mail for more information.