HSBC Minimum Annual Income Deposit Notes, Series 5

Secondary market price*:
(less any applicable Early Trading Charges)
Last updated:

If held to maturity, the Notes will pay:

  • 100 per cent of the principal amount invested; and
  • Annual variable Coupons in the first and second year of the Term, subject to a minimum of US USD1.25 per Note and a maximum of USD7.85 per Note, depending upon the price performance of a notional portfolio of ten(10) equally-weighted shares set out below. Benning in the third year and ending at maturity, a Noteholder may be entitled to receive an annual Coupon of up to a maximum of USD7.85 per Note, depending upon the price performance of the Portfolio. The Coupon Rate will be a percentage amount equal to the average of all of the ten (10) Reference Share Returns, subject to a minimum Coupon Rate of 1.25 per cent and a maximum Coupon Rate of 7.85 per cent in the first and second year. Beginning in the third year and ending at maturity, there is no minimum Coupon Rate and the maximum Coupon Rate will remain at 7.85 per cent. As a result, except in the first and second year, there is no assurance that a Coupon will be payable in any subsequent year during the Term of the Note.

Key features

Issue date: 5 April 2011
Maturity date: 5 April 2016
Note term: 5 years
CUSIP #: CA40427HRZ87
Currency: USD
Selling Agent Fees: US $2.00 per Note

Highlights

  • Principal protected at maturity
  • Eligible for registered accounts
  • An annual variable Coupon, subject to a minimum of USD1.25 per Note for the first and second year and a maximum of US $7.85 per Note

Underlying asset(s)

Notional Portfolio
Reference share Ticker Exchange
Credit Suisse Group AG CS NYSE
Gold Fields Limited GFI NYSE
Kraft Foods Inc KFT NYSE
Nokia Corporation NOK NYSE
Petroleo Brasileiro S.A. PBR NYSE
Raytheon Company RTN NYSE
Taiwan Semiconductor Manufacturing Company Ltd TSM NYSE
Teva Pharmaceutical Industries Ltd TEVA Nasdaq
Vodafone Group Plc VOD Nasdaq
Wal-mart Stores Inc WMT 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 US $1.25 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

HSBC Securities (Canada) Inc. intends, in normal market conditions, 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. Sale of Notes prior to maturity may subject to an Early Trading Charge as follows:

Time period Early trading charge
Issue Date to and including October 4, 2011 2.00%
October 5, 2011 to and including April 4, 2012 1.50%
April 5, 2012 to and including October 4, 2012 1.00%
October 5, 2012 to and including the April 4, 2013 0.50%
April 5, 2013 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 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.

Risk factors

The Notes subject the Noteholders to significant risks, including the potential for lost investment opportunities. Potential Noteholders should carefully review and consider all risks set forth in this Information Statement including:

  • The Notes will not constitute insured deposits;
  • A Noteholder may not receive more than the minimum Coupon amount of USD1.25 per Note on each Coupon Payment Date in the first and second year;
  • Except in the first and second year, there is no assurance a Noteholder will receive a Coupon for any subsequent year during the Term of the Note;
  • A Noteholder will not receive more than the maximum Coupon amount of USD7.85 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 for the Notes and if such a market develops, there can be no assurance that it will be liquid;
  • 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;
  • Adjustments as a result of certain Special Circumstances; and
  • Currency risk

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 HSBC directly or through his or her investment advisor 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: HSBC Derivative Products Group, 70 York Street, 8th Floor, Toronto, ON M5J 1S9, Fax (416) 868-3088. This rescission right 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 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.