|
|
Subject to Completion
Preliminary Term Sheet dated
March 28, 2013
|
Filed Pursuant to Rule 433
Registration No. 333-180289
(To Prospectus dated March 22, 2012,
Prospectus Supplement dated March 22, 2012 and
Product Supplement LIRN-2 dated March
27, 2012)
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|
Units
|
Pricing Date*
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April , 2013
|
|
$10 principal
amount per unit
|
Settlement Date*
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May , 2013
|
|
CUSIP No.
|
Maturity Date*
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April , 2015
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*Subject to change based on the actual date the notes are priced
for initial sale to the public (the “pricing date”)
|
Capped Leveraged
Index Return Notes
®
Linked to the Dow
Jones Global Titans 50 Index
SM
|
|
§
|
Maturity
of approximately two
years
|
|
|
§
|
2-to-1
upside exposure to
increases in the Index,
subject to a capped
return of [14% to 18%]
|
|
|
§
|
1-to-1
downside exposure to
decreases in the Index
beyond a 5% decline,
with up to 95% of the
Original Offering Price
at risk
|
|
|
§
|
All
payments occur at maturity
and are subject to
the credit risk of
HSBC USA Inc.
|
|
|
§
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No
listing on any securities
exchange
|
The notes are being issued by HSBC USA Inc. (“HSBC”).
Investing in the notes involves a number of risks. There are important differences between the notes and a conventional debt security,
including different investment risks. See “Risk Factors” on page TS-6 of this term sheet and beginning on page S-9
of product supplement LIRN-2.
_________________________
Neither the Securities and Exchange Commission (the “SEC”)
nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy or the adequacy of this
document, the accompanying product supplement, prospectus or prospectus supplement. Any representation to the contrary is a criminal
offense.
_________________________
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|
Per Unit
|
Total
|
|
Public offering price
(1)(2)
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$ 10.00
|
$
|
|
Underwriting discount
(1)(2)
|
$ 0.20
|
$
|
|
Proceeds, before expenses, to HSBC
|
$ 9.80
|
$
|
|
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(1)
|
For any purchase of 500,000 units or more in a single transaction by an individual investor,
the public offering price and the underwriting discount will be $9.95 per unit and $0.15 per unit, respectively.
|
|
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(2)
|
For any purchase by certain fee-based trusts and discretionary accounts managed by U.S. Trust
operating through Bank of America, N.A., the public offering price and underwriting discount will be $9.80 per unit and $0.00 per
unit, respectively. See as well “Supplement to the Plan of Distribution.”
|
The notes:
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Merrill
Lynch & Co.
April , 2013
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Summary
The Capped Leveraged Index Return Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
,
due April , 2015 (the “notes”) are our senior unsecured
debt securities and are not a direct or indirect obligation of any third party. The notes are not deposit liabilities or other
obligations of a bank and are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other governmental
agency of the United States or any other jurisdiction.
The notes will rank equally with all of our other
senior unsecured
debt. Any payments due on the notes, including any repayment of principal, depends on the credit risk of HSBC and its ability to
satisfy its obligations as they come due.
The notes provide you a leveraged return, subject to a cap, if the Ending Value (as
determined below) of the Dow Jones Global Titans 50 Index
SM
(the “Index”) is greater than the Starting Value.
If the Ending Value is less than the Threshold Value, you will lose a portion, which could be significant, of the principal amount
of your notes.
The terms and risks of the notes are contained in this term
sheet and the documents listed below (together, the “Note Prospectus”). The documents have been filed as part of a
registration statement with the SEC, which may, without cost, be accessed on the SEC website as indicated below or obtained from
MLPF&S by calling 1-866-500-5408:
Our Central Index Key, or CIK, on the SEC Website is 83246.
Before
you invest, you should read the Note Prospectus, including this term sheet, for information about us and this offering. Any prior
or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus.
You should carefully consider, among other things, the matters set forth under “Risk Factors” in the section indicated
on the cover of this term sheet. The notes involve risks not associated with conventional debt securities. Capitalized terms used
but not defined in this term sheet have the meanings set forth in product supplement LIRN-2. Unless otherwise indicated or unless
the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar
references are to HSBC.
|
Terms of the Notes
|
Redemption Amount Determination
|
|
Issuer:
|
HSBC USA Inc. (“HSBC”)
|
On the maturity date, you will receive a cash payment per unit
determined as follows:
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|
Original Offering Price:
|
$10.00 per unit
|
|
Term:
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Approximately two years
|
|
Market Measure:
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The Dow Jones Global Titans Index
SM
(Bloomberg symbol: “DJGT”), a price return index.
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Starting Value:
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The closing level of the Index on the pricing date.
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|
Ending Value:
|
The average of the closing levels of the Index on each scheduled calculation day occurring during the Maturity Valuation Period. The calculation days are subject to postponement in the event of Market Disruption Events, as described beginning on page S-20 of product supplement LIRN-2.
|
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Threshold Value:
|
95% of the Starting Value, rounded to two decimal places.
|
|
Capped Value:
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[$11.40 to $11.80] per unit of the notes, which represents a return of [14% to 18%] over the Original Offering Price. The actual Capped Value will be determined on the pricing date.
|
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Maturity Valuation Period:
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Five scheduled calculation days shortly before the maturity date
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Participation Rate:
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200%
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Calculation Agent:
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Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and HSBC, acting jointly.
|
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Fees Charged:
|
The public offering price of the notes includes the underwriting discount of $0.20 per unit as listed on the cover page and an additional charge of $0.075 per unit more fully described on page TS-11
|
|
Capped Leveraged Index Return Notes
®
|
TS-2
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Investor Considerations
|
You may wish to consider an investment in the notes if:
|
The notes may not be an appropriate investment for you if:
|
|
|
|
|
§
You anticipate that the Index will increase moderately from the Starting Value to the Ending Value.
§
You accept that your investment will result in a loss, which could be significant, if the Index decreases from the Starting
Value to an Ending Value that is below the Threshold Value.
§
You accept that the return on the notes, if any, will be capped.
§
You are willing to forgo the interest payments that are paid on traditional interest bearing debt securities.
§
You are willing to forgo dividends or other benefits of owning the stocks included in the Index.
§
You are willing to accept that a secondary market is not expected to develop for the notes, and understand that the market
prices for the notes, if any, may be less than the Original Offering Price and will be affected by various factors, including our
actual and perceived creditworthiness, and the fees charged, as described on page TS-2.
§
You are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Redemption
Amount.
|
§
You believe that the Index will decrease from the Starting Value or that it will not increase sufficiently over the term
of the notes to provide you with your desired return.
§
You seek 100% return of principal at maturity.
§
You seek an uncapped return on your investment.
§
You seek interest payments or other current income on your investment.
§
You want to receive dividends or other distributions paid on the stocks included in the Index.
§
You seek an investment for which there will be a liquid secondary market.
§
You are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes.
|
We urge you to consult your investment, legal, tax, accounting,
and other advisors before you invest in the notes.
Hypothetical Payout Profile
The below graph is based on
hypothetical
numbers and
values.
|
Capped Leveraged Index Return Notes
®
|
This graph reflects the returns on
the notes, based on the Participation Rate of 200%, a Threshold Value of 95% of the Starting Value and a Capped Value of $11.60,
the midpoint of the Capped Value range of [$11.40 to $11.80] per unit. The green line reflects the returns on the notes, while
the dotted gray line reflects the returns of a direct investment in the stocks included in the Index, excluding dividends.
This graph has been prepared for
purposes of illustration only.
|
|
Capped Leveraged Index Return Notes
®
|
TS-3
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Hypothetical Payments at Maturity
The following table and examples are for purposes of illustration
only. They are based on
hypothetical
values and show
hypothetical
returns on the notes.
The actual amount you
receive and the resulting total rate of return will depend on the actual Starting Value, Threshold Value, Ending Value, Capped
Value, and term of your investment.
The following table is based on a Starting Value of 100, a Threshold
Value of 95, the Participation Rate of 200%, and a Capped Value of $11.60 per unit. It illustrates the effect of a range of Ending
Values on the Redemption Amount per unit of the notes and the total rate of return to holders of the notes. The following examples
do not take into account any tax consequences from investing in the notes.
|
Ending
Value
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Percentage
Change from
the Starting Value to the
Ending Value
|
Redemption
Amount per Unit
|
Total
Rate of Return on the
Notes
|
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60.00
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-40.00%
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$6.50
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-35.00%
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70.00
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-30.00%
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$7.50
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-25.00%
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85.00
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-15.00%
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$9.00
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-10.00%
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90.00
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-10.00%
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$9.50
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-5.00%
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94.00
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-6.00%
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$9.90
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-1.00%
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95.00
(1)
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-5.00%
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$10.00
|
0.00%
|
|
98.00
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-2.00%
|
$10.00
|
0.00%
|
|
100.00
(2)
|
0.00%
|
$10.00
|
0.00%
|
|
104.00
|
4.00%
|
$10.80
|
8.00%
|
|
106.00
|
6.00%
|
$11.20
|
12.00%
|
|
110.00
|
10.00%
|
$11.60
(3)
|
16.00%
|
|
120.00
|
20.00%
|
$11.60
|
16.00%
|
|
130.00
|
30.00%
|
$11.60
|
16.00%
|
|
140.00
|
40.00%
|
$11.60
|
16.00%
|
|
150.00
|
50.00%
|
$11.60
|
16.00%
|
|
160.00
|
60.00%
|
$11.60
|
16.00%
|
|
|
|
|
|
|
|
(1)
|
This is the
hypothetical
Threshold Value.
|
|
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(2)
|
The
hypothetical
Starting Value of 100 used in these examples has been chosen for illustrative purposes only, and does
not represent a likely actual Starting Value for the Index.
|
|
|
(3)
|
The Redemption Amount per unit cannot exceed the
hypothetical
Capped Value.
|
For recent actual levels of the Index, see “The Index”
section below. The Index is a price return index and as such the Ending Value will not include any income generated by dividends
paid on the stocks included in the Index, which you would otherwise be entitled to receive if you invested in those stocks directly.
In addition, all payments on the notes are subject to issuer credit risk.
|
Capped Leveraged Index Return Notes
®
|
TS-4
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Redemption Amount Calculation Examples
|
Example 1
|
|
The Ending Value is 85, or 85% of the Starting Value:
|
|
Starting Value: 100
|
|
Ending Value: 85
|
|
Threshold Value: 95
|
|
Redemption Amount per unit
|
|
Example 2
|
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The Ending Value is 98, or 98% of the Starting Value:
|
|
Starting Value: 100
|
|
Ending Value: 98
|
|
Threshold Value: 95
|
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Redemption Amount (per unit) =
$10.00
, the Original Offering Price, since the Ending Value is less than the Starting Value but equal to or greater than the Threshold Value.
|
|
Example 3
|
|
The Ending Value is 104, or 104% of the Starting Value:
|
|
Starting Value: 100
|
|
Ending Value: 104
|
|
= $10.80
Redemption Amount per unit
|
|
Example 4
|
|
The Ending Value is 130, or 130% of the Starting Value:
|
|
Starting Value: 100
|
|
Ending Value: 130
|
|
= $16.00, however, because the Redemption Amount for the notes cannot exceed the Capped Value, the Redemption Amount will be $11.60 per unit
|
|
Capped Leveraged Index Return Notes
®
|
TS-5
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Risk Factors
We urge you to read the section “Risk Factors”
in the product supplement and in the accompanying prospectus supplement. Investing in the notes is not equivalent to investing
directly in the Index. You should understand the risks of investing in the notes and should reach an investment decision only after
careful consideration, with your advisers, with respect to the notes in light of your particular financial and other circumstances
and the information set forth in this term sheet and the accompanying product supplement, prospectus supplement and prospectus.
In addition to the risks in the product supplement identified
below, you should review “Risk Factors” in the accompanying prospectus supplement, including the explanation of risks
relating to the notes described in the section “— Risks Relating to All Note Issuances.”
|
|
§
|
Your investment may result in a loss; there is no
guaranteed return of principal.
|
|
|
§
|
Your yield may be less than the yield on a conventional
debt security of comparable maturity.
|
|
|
§
|
Payments on the notes are subject to our credit risk.
|
|
|
§
|
Your return, if any, is limited to the return represented
by the Capped Value.
|
|
|
§
|
Your investment return may be less than a comparable
investment directly in the Index, or the components included in the Index.
|
|
|
§
|
You must rely on your own evaluation of the merits
of an investment linked to the Index.
|
|
|
§
|
Commissions, fees and hedging costs as described on
page TS-11 may affect the price at which you will be able to sell the notes in secondary market transactions.
|
|
|
§
|
We cannot assure you that a trading market for your
notes will ever develop or be maintained. MLPF&S is not obligated to make a market for, or to repurchase, the notes.
|
|
|
§
|
The Redemption Amount will not reflect changes in
the value of the Index prior to the Maturity Valuation Period.
|
|
|
§
|
The publisher of the Index may adjust the Index in
a way that affects its value, and the Index publisher has no obligation to consider your interests.
|
|
|
§
|
If you attempt to sell the notes prior to maturity,
their market value, if any, will be affected by various factors that interrelate in complex ways and their market value may be
less than their Original Offering Price.
|
|
|
§
|
Purchases and sales by us, MLPF&S and our respective
affiliates of the securities represented by the Index may affect your return.
|
|
|
§
|
Our trading and hedging activities, and those of MLPF&S,
may create conflicts of interest with you.
|
|
|
§
|
Our hedging activities, and those of MLPF&S, may
affect your return on the notes and their market value.
|
|
|
§
|
There may be potential conflicts of interest involving
the calculation agent. We may appoint and remove the calculation agent.
|
|
|
§
|
The notes are not insured by any governmental agency
of the United States or any other jurisdiction.
|
|
|
§
|
You will have no rights as a security holder, you
will have no rights to receive any of the securities represented by the Index, and you will not be entitled to dividends or other
distributions by the issuers of these securities.
|
|
|
§
|
Exchange rate movements may impact the value of the notes.
|
|
|
§
|
Your return may be affected by factors affecting the international securities markets.
|
|
|
§
|
Except to the extent that the common stock of HSBC Holdings plc (the parent corporation of HSBC) or Bank of America Corporation
(the parent company of MLPF&S) is included in the Index, we and MLPF&S do not control any company included in the Index
and are not responsible for any disclosure made by any other company.
|
|
|
§
|
Our business activities and those of MLPF&S relating to the companies represented by the Index may create conflicts of
interest with you.
|
|
|
§
|
The U.S. federal income tax consequences of the notes
are uncertain and may be adverse to a holder of the notes. See “Summary Tax Consequences” below and “U.S. Federal
Income Tax Summary” beginning on page S-33 of product supplement LIRN-2.
|
|
Capped Leveraged Index Return Notes
®
|
TS-6
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
The Index
All disclosures contained in this term sheet regarding the Index,
including, without limitation, its make-up, method of calculation, and changes in its components, have been derived from publicly
available sources. The information reflects the policies of S&P Dow Jones Indices LLC (the “Index Sponsor”), and
is subject to change by the Index Sponsor. The Index Sponsor has no obligation to continue to publish, and may discontinue publication
of, the Index. The consequences of the Index Sponsor discontinuing publication of the Index are discussed in the section entitled
“Description of LIRNs—Discontinuance of a Market Measure” beginning on page S-23 of product supplement LIRN-2.
None of us, the calculation agent, or the selling agent accepts any responsibility for the calculation, maintenance, or publication
of the Index or any successor index.
The Index is composed of 50 stocks, selected from the Dow Jones
Global Index
SM
to reflect the performance of the world’s leading multinational companies. The base date for the
Index is December 31, 1991, with a corresponding base value of 100. As of February 28, 2013, the component companies of the Index
had their headquarters in the following countries (with the percentage of component companies noted parenthetically): United States
(66.29%); United Kingdom (9.09%); Switzerland (7.58%); Australia (3.08%); France (3.08%); Japan (3.07%); South Korea (2.28%); Germany
(2.25%); Spain (1.76%); Italy (0.81%); and Russia (0.70%).
Index Composition and Maintenance
The 50 stocks composing the Index are selected from the Dow
Jones Global Index
SM
, a broad market benchmark that covers 51 countries. The initial components of the Index were selected
as follows:
(a) If a company had more than one class of shares
in all of the components of the Dow Jones Global Index
SM
, then only the most liquid class was eligible.
(b) If a company did not generate revenue
from foreign markets, it was ineligible.
(c) For countries with significant barriers to direct
foreign investment, the Index Sponsor may opt to include depository receipts or other types of offshore listings in the Index.
(d) A selection list was defined as the largest 100
companies in the Dow Jones Global Index
SM
by float-adjusted market capitalization.
(e) Companies on the selection list were
ranked by each of the following:
(i) Float-adjusted market capitalization
(ii) Sales/revenue
(iii) Net income
(f) For each company, a final rank was calculated
by weighting the float-adjusted market capitalization rank at 60%, the sales/revenue rank at 20%, and the net income rank at 20%.
(g) The top 50 stocks by final rank were
selected as the components of the Index.
The composition of the Index is reviewed annually, based on
the free-float market capitalization of the stocks in the Dow Jones Global Index
SM
at the end of May. Changes to the
composition of the Index are announced in early June, and following a minimum two-week notification period, the composition changes
are implemented after official closing prices have been determined on the third Friday of June. All changes become effective at
the opening of trading for the next index dissemination day. The annual review process proceeds according to the initial selection
of the Index as described above under (a) and (b), but a selection is defined as the 50 current component stocks plus the 50 largest
noncomponent stocks ranked by float-adjusted market capitalization. The companies on the selection list are then ranked as described
above. The top 50 stocks by final rank are selected as Index components. Once the Index component list is established, it is finalized
based on the following buffer rules: (i) if a non-component is ranked among the top 30 stocks on the selection list, then it replaces
the lowest-ranked component in the Index; and (ii) if a component is not ranked among the top 70 stocks on the selection list,
then it is replaced by the highest-ranked non-component on the selection list.
In addition to the annual review process, the component weights
for the stocks in the Index are reviewed quarterly based on market capitalization and free-float data as of the Wednesday immediately
preceding the third Friday of March, June, September, and December. At each quarterly update, the weighting of each component is
capped at 10% of the total float-adjusted market capitalization of the Index. If the weighting of a component exceeds 10%, it is
reduced to 10% by a weighting cap factor.
The Index Sponsor also continually reviews the composition of
the Index to reflect extraordinary corporate actions involving the component companies, such as mergers, takeovers, spin-offs,
initial public offerings, delistings, and bankruptcy filings, and publishes a monthly selection list to indicate possible changes
in the composition of the Index at the next annual review.
|
Capped Leveraged Index Return Notes
®
|
TS-7
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Index Composition Adjustments
The following summarizes adjustments to the Index necessitated
by specific corporate events:
(i) Initial Public Offerings — An initial public
offering becomes eligible for inclusion in the Index at the next annual review. It will replace the smallest component in the Index
if it is a component of the Dow Jones Global Index
SM
, qualifies for the Index selection list, and is among the top 30
companies on the selection list.
(ii) Spin-offs — If the largest spin-off company
is among the top 70 companies on the Index selection list, it will replace its parent company in the Index. Otherwise, the original
component is replaced by the highest ranked non-component on the selection list. Changes in the Index composition due to a spin-off
are effective on the same day the corporate action becomes effective, following a minimum notification period of two trading days.
(iii) Mergers and Takeovers — If both companies
are components of the Index, and if the surviving company satisfies the selection criteria for the Index, then it will replace
one of the two components. The other original component will be replaced by the highest ranked non-component on the selection list.
If the surviving company does not satisfy the selection criteria for the Index, then the two original components will be replaced
by the two highest ranked non-components on the selection list. For mergers and takeovers occurring between a component and a non-component
of the Index, if the surviving company satisfies the selection criteria for the Index, then it replaces the original component
company. If the surviving company does not satisfy the selection criteria for the Index, then the original component will be replaced
by the highest ranked non-component on the selection list. Changes in the Index composition due to a merger or takeover are effective
on the same day the corporate action becomes effective, following a minimum notification period of two trading days.
Index Calculation
The Index is calculated with the “Laspeyres formula,”
which measures the aggregate price changes in the component stocks against a fixed base quantity weight. The formula for calculating
the Index value can be expressed as follows:
Index =
free-float market capitalization
of the Index
x100
adjusted base date market capitalization
of the Index
The free-float market capitalization of the Index is equal to
the sum of the products of the closing price, market capitalization, and free-float factor for each component stock as of the time
the Index is being calculated. The Index Sponsor calculates and disseminates the Index over a 24-hour dissemination period. The
Index closing level is based on each component stock’s last traded price at the close of trading on its primary market during
that day’s Index dissemination period and is published at 5:30 p.m., New York City time. If, on a particular day, a stock
does not trade at all, or trading in a stock is suspended before the opening of its primary market or the primary market for a
stock is closed due to a holiday, the Index Sponsor will use the stock’s closing price for the previous day to calculate
the Index closing level for that day. All trading prices are converted into U.S. dollars and the Index closing level for a trading
day is determined by using the last available WM closing spot rates as reported by Reuters on that trading day.
Index Divisor Adjustments
The Index Sponsor uses an index divisor to insulate the Index
from the effects of component changes to the Index and various corporate actions. The Index Sponsor divides the affected Index’s
market capitalization by the index divisor after the close of trading on each day that there is a change in either Index membership
or shares outstanding for an Index component. The index divisor is adjusted as necessary to maintain the continuity of the Index
and to prevent distortions due to changes in the composition of the Index resulting from the addition, deletion, or replacement
of component companies, as well as changes of more than 10% in a component company’s number of free-float shares. Other corporate
actions requiring divisor adjustments include mergers, takeovers, spin-offs, rights offerings, share repurchases, public offerings,
return of capital distributions, special cash distributions, and special stock distributions of other than the same stock.
Changes to Weightings
If the number of free-float shares outstanding for an Index
component changes by more than 10% due to an extraordinary corporate action, then the new number of free-float shares and free-float
weighting will become effective on the same day the corporate action becomes effective, following a minimum notification period
of two trading days. If the number of free-float shares outstanding for an Index component changes by less than 10% due to an extraordinary
corporate action, or if the changes occur over a prolonged period, then the number of free-float shares and free-float weighting
will become effective at the next quarterly shares update. If a company’s free-float shares change due to changes in its
ownership structure, then the new free-float total will become effective at the next quarterly shares update.
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Capped Leveraged Index Return Notes
®
|
TS-8
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
The following graph shows the monthly historical performance
of the Index in the period from January 2008 through February 2013. We obtained this historical data from Bloomberg L.P. We have
not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On March 21, 2013, the
closing level of the Index was 205.58.
Historical Performance of the Index
This historical data on the Index is not necessarily indicative
of the future performance of the Index or what the value of the notes may be. Any historical upward or downward trend in the level
of the Index during any period set forth above is not an indication that the level of the Index is more or less likely to increase
or decrease at any time over the term of the notes.
Before investing in the notes, you should consult publicly available
sources for the levels of the Index.
License Agreement
S&P
®
is a registered trademark of Standard
& Poor’s Financial Services LLC (“S&P”) and Dow Jones
®
, and Dow Jones Global Titans 50
IndexSM are trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P
Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by HSBC. The Index is a product of S&P Dow Jones
Indices LLC and/or its affiliates, and has been licensed for use by HSBC.
The notes are not sponsored, endorsed, sold or promoted by S&P
Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P Dow Jones Indices”).
S&P Dow Jones Indices makes no representation or warranty, express or implied, to the holders of the notes or any member of
the public regarding the advisability of investing in securities generally or in the notes particularly or the ability of the Index
to track general market performance. S&P Dow Jones Indices’ only relationship to HSBC with respect to the Index
is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices. The
Index is determined, composed and calculated by S&P Dow Jones Indices without regard to HSBC or the notes. S&P Dow
Jones Indices has no obligation to take the needs of HSBC or the holders of the notes into consideration in determining, composing
or calculating the Index. S&P Dow Jones Indices is not responsible for and has not participated in the determination
of the prices, and amount of the notes or the timing of the issuance or sale of the notes or in the determination or calculation
of the equation by which the notes are to be converted into cash. S&P Dow Jones Indices has no obligation or liability
in connection with the administration, marketing or trading of the notes. There is no assurance that investment products based
on the Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC
is not an investment advisor. Inclusion of a security within the Index is not a recommendation by S&P Dow Jones Indices
to buy, sell, or hold such security, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group
Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to the notes currently being issued
by HSBC, but which may be similar to and competitive with the notes. In addition, CME Group Inc. and its affiliates may trade
financial products which are linked to the performance of the Index. It is possible that this trading activity will affect
the value of the notes.
|
Capped Leveraged Index Return Notes
®
|
TS-9
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY,
TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO,
ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES
NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE OR AS TO RESULTS TO BE OBTAINED BY HSBC, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR
WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW
JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO,
LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER
IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN S&P DOW JONES INDICES AND HSBC, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
|
Capped Leveraged Index Return Notes
®
|
TS-10
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Supplement to the Plan of Distribution
We may deliver the notes against payment therefor in New York,
New York on a date that is greater than three business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange
Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to any
such trade expressly agree otherwise. Accordingly, if the initial settlement of the notes occurs more than three business days
from the pricing date, purchasers who wish to trade the notes more than three business days prior to the original issue date will
be required to specify alternative settlement arrangements to prevent a failed settlement.
The notes will not be listed on any securities exchange. In
the original offering of the notes, the notes will be sold in minimum investment amounts of 100 units.
MLPF&S will not receive an underwriting discount for notes
sold to certain fee-based trusts and fee-based discretionary accounts managed by U.S. Trust operating through Bank of America,
N.A.
If you place an order to purchase the notes, you are consenting
to MLPF&S acting as a principal in effecting the transaction for your account.
MLPF&S may repurchase and resell the notes, with repurchases
and resales being made at prices related to then-prevailing market prices or at negotiated prices. MLPF&S may act as principal
or agent in these market-making transactions; however it is not obligated to engage in any such transactions.
The distribution of the Note Prospectus in connection with these
offers or sales will be solely for the purpose of providing investors with the description of the terms of the notes that was made
available to investors in connection with their initial offering. Secondary market investors should not, and will not be authorized
to, rely on the Note Prospectus for information regarding HSBC or for any purpose other than that described in the immediately
preceding sentence.
Role of MLPF&S
MLPF&S will participate as selling agent in the distribution
of the notes. Under our distribution agreement with MLPF&S, MLPF&S will purchase the notes from us as principal at the
public offering price indicated on the cover of this term sheet, less the indicated underwriting discount. In connection with hedging
our obligations under the notes, we will enter into a hedge transaction with an affiliate of MLPF&S, which will include a charge
of up to $0.075 per unit, representing an estimated profit credited to MLPF&S through the hedge transaction. The public offering
price you pay for the notes includes this charge and the underwriting discount. This charge and fee reduce the economic terms of
the notes. In arranging the hedge transaction for the notes, MLPF&S seeks bids from market participants, which could include
one of our affiliates. Additional profits and losses may be realized by the hedge providers from these hedging transactions. For
further information regarding how these fees and hedging costs may affect the price at which you will be able to sell the notes
in secondary market transaction and conflicts of interest, see "Risk Factors—General Risks Relating to LIRNs”
beginning on page S-9 and “Use of Proceeds” on page S-18 of product supplement LIRN-2.
|
Capped Leveraged Index Return Notes
®
|
TS-11
|
|
Capped
Leveraged
Index
Return
Notes
®
Linked
to the Dow Jones Global Titans 50 Index
SM
, due April , 2015
|
|
Summary Tax Consequences
You should consider the U.S. federal income tax consequences
of an investment in the notes, including the following:
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§
|
There is no statutory, judicial, or administrative
authority directly addressing the characterization of the notes.
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§
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You agree with us (in the absence of an administrative
determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as pre-paid executory
contracts with respect to the Index.
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§
|
Under this characterization and tax treatment of the
notes, a U.S. Holder (as defined in product supplement LIRN-2) generally will recognize capital gain or loss upon maturity or
upon a sale or exchange of the notes prior to maturity. This capital gain or loss generally will be long-term capital gain or
loss if you held the notes for more than one year.
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|
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§
|
No assurance can be given that the IRS or any court
will agree with this characterization and tax treatment.
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§
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Withholding and reporting requirements under the legislation
enacted on March 18, 2010 (as discussed beginning on page S-48 of the accompanying prospectus supplement), will generally apply
to payments made after December 31, 2013. However, this withholding tax will not be imposed on payments pursuant to obligations
outstanding on January 1, 2014. Additionally, withholding due to any payment being treated as a “dividend equivalent”
(as discussed beginning on page S-47 of the accompanying prospectus supplement) will begin no earlier than January 1, 2014. Holders
are urged to consult with their own tax advisors regarding the possible implications of this recently enacted legislation on their
investment in the notes.
|
You should consult your own tax advisor concerning the U.S.
federal income tax consequences to you of acquiring, owning, and disposing of the notes, as well as any tax consequences arising
under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other
tax laws. You should review carefully the discussion under the section entitled “U.S. Federal Income Tax Summary” beginning
on page S-33 of product supplement LIRN-2.
Where You Can Find More Information
We have filed a registration statement (including a product
supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this term sheet relates. Before you
invest, you should read the Note Prospectus, including this term sheet, and the other documents that we have filed with the SEC,
for more complete information about us and this offering. You may get these documents without cost by visiting EDGAR on the SEC
website at www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you these
documents if you so request by calling MLPF&S toll-free at 1-866-500-5408.
Market-Linked Investments Classification
MLPF&S classifies certain market-linked investments (the
“Market-Linked Investments”) into categories, each with different investment characteristics. The following description
is meant solely for informational purposes and is not intended to represent any particular Enhanced Return Market-Linked Investment
or guarantee any performance.
Enhanced Return Market-Linked Investments
are short- to medium-term investments that offer you a way to enhance exposure to a particular market view without taking on a
similarly enhanced level of market downside risk. They can be especially effective in a flat to moderately positive market (or,
in the case of bearish investments, a flat to moderately negative market). In exchange for the potential to receive better-than
market returns on the linked asset, you must generally accept market downside risk and capped upside potential. As these investments
are not market downside protected, and do not assure full repayment of principal at maturity, you need to be prepared for the possibility
that you may lose all or part of your investment.
“Leveraged Index Return Notes
®
” and
“LIRNs
®
” are registered service marks of Bank of America Corporation, the parent company of MLPF&S.
|
Capped Leveraged Index Return Notes
®
|
TS-12
|
Grafico Azioni DXI Capital (CE) (USOTC:DXIEF)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni DXI Capital (CE) (USOTC:DXIEF)
Storico
Da Giu 2023 a Giu 2024
