HSBC S&P/TSX60® Index-Linked "Two Step" Notes, Series 1 (Principal at Risk) (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, which will be subject to a maximum return of 54%. 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.
The Note Securities are only available to accredited investors. Please contact HSBC for more information at +1 866 511 4722 or send us an e-mail for more information.
||25 February 2010
||25 February 2013
|Lower Barrier Return:
|Selling agent fees:
||CAD2.00 per Note (2.00% of the Principal Amount)
- Non-Principal Protected: 99% 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
a) If the Reference Index Return is equal to or greater than zero and less than 30%, an Investor will receive their Principal Amount invested + $30 per Note Security
b) If the Reference Index Return is equal to or greater than 30%, an Investor will participate on a 1:1 basis (subject to the Cap of 54%)
Negative Reference Index Return
c) If the Reference Index Return is less than 0% and greater than or equal to -20%, an Investor will receive 100% of the Principal Amount invested
d) If Reference Index Return is less than -20%, an Investor will lose 1% of the Principal Amount invested for every 1% that the Reference Index Return is calculated to be less than zero (For example, if the Reference Index Return is calculated to be -25%, an Investor will suffer a 25% loss and will receive only 75% of their Principal Amount invested at maturity)
||Initial Index Level
Are the Notes right for you?
The Notes may be an appropriate investment for you, if, among other things, 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 S&P 500 Index; and (3) are investing for the longer term. The Notes do not provide investors with a return or income stream prior to maturity. The effective yield to maturity of the Notes may be less than that which would be payable on a conventional fixed-rate or floating-rate debt instrument. The Notes are generally more suitable for purchasing and holding up to maturity. Potential investors should consult with their own investment, legal and tax advisers to determine the suitability.
Early trading charge/Secondary market
As a result of hold periods and resale restrictions under applicable securities laws, 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 provide 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. Other than any price which HSBC Securities may, but is under no obligation to, obtain or provide, there is no guarantee that third parties will be available in any such secondary market, if one exists. HSBC Securities may, from time to time, purchase and sell Note Securities but will not be obligated to do so. HSBC Securities will have the right, in its sole discretion, to cease to purchase or sell Note Securities. If a secondary market develops, it may be suspended or discontinued at any time without notice to Investors. After June 26, 2010, sales of the Note Securities 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:
Noteholders should carefully review and consider all risks set forth in the Term Sheet with their investment adviser, including:
- The volatility or degree to which the level of the Index changes
- Notes will not constitute insured deposits under the Canada Deposit Insurance Corporation Act
- 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 instrument or instruments comprising each Index are unpredictable
- The historical, or pro forma, performance of each Index is not an indication of future performance
- Extraordinary events – HSBC may redeem the Notes prior to maturity upon the occurrence of certain extraordinary events, which include events that could have an impact on HSBC's ability to perform its obligations under the Notes or to hedge its position in respect of its obligation to make payments under the Notes
- Conflicts of interest with the calculation agent
Please do not hesitate to call us at +1 866 511 4722 or send us an e-mail for more information.
||Early trading charge
|June 27 2010 to and including August 25 2010
|August 26 2010 to and including November 25 2010
|November 26 2010 to and including February 25 2011
|February 26 2011 to and including the Maturity Date
Important: Please read the disclaimer carefully.