HSBC Minimum Annual Income Deposit Notes, Series 4

Secondary market price*: 96.46 %
Maturity data: 30 January 2014

The Notes will pay, if held to maturity:

  • 100 per cent of the principal amount invested
  • Annual variable Coupons in the first and second year of the Term, subject to a minimum of CAD1.00 per Note and a maximum of CAD7.00 per Note, depending upon the price performance of a notional portfolio of ten (10) equally-weighted shares set out below. Beginning in the third year and ending at maturity, a Noteholder may be entitled to receive an annual Coupon of up to a maximum of CAD7.00 per Note, depending upon the price performance of the Portfolio

Key features

Issue date: 30 January 2009
Maturity date: 30 January 2014
Coupon Payment Dates: 30 January (each year)
Note term: 5 years
CUSIP #: CA40427HQK28
Currency: CAD
Selling Agent: Fiera Capital Inc.
Fees: 1.00% paid to Agent, 2.50% paid to dealers
FundSERV Code: FIE 2011

Highlights

  • Principal protected at maturity
  • Eligible for registered accounts
  • An annual variable Coupon, subject to a minimum of CAD1.00 per Note and a maximum of CAD7.00 per Note

Underlying asset(s)

Notional Portfolio
Reference share Ticker Exchange
JP Morgan Chase & Co. JPM NYSE
Research in Motion Limited RIMM Nasdaq
Monsanto Company MON NYSE
Petroleo Brasileiro S.A. PBR NYSE
Sony Corporation SNE NYSE
Wal-Mart Stores Inc. WMT NYSE
Valero Energy Corporation VLO NYSE
Amgen Inc. AMGN Nasdaq
FedEx Corp. FDX NYSE
International Business Machines Corp. IBM NYSE

Are the Notes right for you?

You may be suited to become a Noteholder if, among other benefits, you: (1) are looking for safety of principal if held to maturity; (2) want exposure to an investment that is linked to the performance of the Reference Shares; (3) are investing for the longer term and believe that the Reference Shares will appreciate. The Notes have certain investment characteristics that differ from conventional fixed income investments. The Notes do not provide Noteholders with a return or income stream that is calculated or determined by reference to a fixed or floating rate of interest. An investment in the Notes is not suitable for an investor looking for a return beyond the minimum annual Coupon amount of CAD1.00 per Note payable on each of the first two Coupon Payment Dates during the Term. As a result, there is no assurance that a Coupon will be payable in any subsequent year during the Term of the Note.

Early trading charges/Secondary market

The Agent intends in normal market conditions, concurrently with HSBC Securities (Canada) Inc., and subject to certain conditions, to use reasonable efforts to provide daily a secondary market price for the Notes during the term, in which the maximum bid-offer spread will be one per cent of the Bid Price (excluding commissions) when orders and settlements are made through FundSERV and one per cent of the Principal Amount (excluding commissions) when orders and settlements are not made through FundSERV. Sale of Notes prior to maturity may be subject to an Early Trading Charge as follows:

Time period Early trading charge
Issue Date to and including 29 July 2009 3.75%
30 July 2009 to and including 29 January 2010 2.75%
1 February 2010 to and including 29 July 2010 1.75%
30 July 2010 to and including the 28 January 2011 0.75%
31 January 2011 to and including the Maturity Date 0.00%

During the term of the Notes, you may inquire as to the net asset value of a Note or the level of the underlying Reference Shares and how they relate to the annual Coupons that are payable under the Notes by contacting HSBC at +1 866 511 4722 or Fiera Capital at +1 866 323 5598. Please see the Information Statement for further details or contact your investment adviser.

Risk factors

Noteholders should carefully review and consider all risks set forth in the Information Statement with their investment adviser, including:

  • Notes will not constitute insured deposits under Canada Deposit Insurance Corporation Act (Canada)
  • A Noteholder may not receive more than the minimum Coupon amount of CAD1.00 per Note on each Coupon Payment Date in the first and second year
  • A Noteholder will not receive more than the maximum Coupon amount of CAD7.00 per Note on each Coupon Payment Date
  • The Principal Amount is payable only if Notes are held to maturity
  • There is no guaranteed secondary market
  • Price or other movements in the Reference Shares are unpredictable
  • The historical or pro forma performance of each Reference Share is not an indication of future performance
  • Conflicts of interest with the Calculation Agent
  • Adjustments as a result of certain Special Circumstances

Additional information

Right of Cancellation – A subscriber may cancel an order to purchase a Note (or cancel the purchase of a Note if the Note has been issued) by providing written instructions to the Agent or HSBC directly or through his or her investment adviser any time up to two days after the later of (i) the day on which the agreement to purchase the Note is entered into and (ii) deemed receipt of this Information Statement. Such notice should be directed to: Senior Vice President, HSBC Derivative Products Group, 70 York Street, 8th Floor, Toronto, ON M5J 1S9, Fax 416 868 3088. This right of cancellation does not extend to Noteholders buying a Note in any secondary market.

Please see the Information Statement for further details. Please do not hesitate to call us at +1 866 511 4722 or Fiera Capital at +1 866 323 5598 or send us an e-mail for more information.

*The price is before the application of an early trade charge that may apply. The secondary market price for a Note, if available, represents the bid price of such Note as a percentage (%) of the original principal amount invested. The bid price stated is only as of the date indicated.

Important: Please read the disclaimer carefully.