|
Security Offering
|
|
HSBC is offering Trigger Performance Securities linked to the S&P 500
®
Index. The Securities are not subject to a predetermined maximum gain and, accordingly, any return at maturity will be determined by the performance of the Index. The Securities are offered at a minimum investment of 100 Securities at the Price to Public described below.
|
|
Index
|
Initial Level
|
Participation Rate
|
Trigger Level
|
CUSIP/ISIN
|
|
S&P 500
®
Index
|
1,552.10
|
105.83%
|
776.05, which is 50.00% of the Initial Level
|
40433T133/US40433T1337
|
See “Additional Information about HSBC
USA Inc. and the Securities” on page 2 of this pricing supplement. The Securities offered will have the terms specified in
the accompanying prospectus dated March 22, 2012, the accompanying prospectus supplement dated March 22, 2012, the accompanying
Equity Index Underlying Supplement dated March 22, 2012 and the terms set forth herein.
Neither the U.S. Securities and Exchange
Commission, or the SEC, nor any state securities commission has approved or disapproved of the Securities or passed upon the accuracy
or the adequacy of this document, the accompanying prospectus, prospectus supplement or Equity Index Underlying Supplement. Any
representation to the contrary is a criminal offense. The Securities are not deposit liabilities or other obligations of a bank
and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency of the United States or any other
jurisdiction.
The Securities will not be listed on any U.S.
securities exchange or quotation system. HSBC Securities (USA) Inc., an affiliate of HSBC USA Inc., will purchase the Securities
from HSBC USA Inc. for distribution to UBS Financial Services Inc., acting as agent. See “Supplemental Plan of Distribution
(Conflicts of Interest)” on the last page of this pricing supplement for the distribution arrangement.
|
|
Price to Public
(1)
|
Underwriting Discount
(1)
|
Proceeds to Issuer
|
|
Per Security
|
$10.00
|
$0.35
|
$9.65
|
|
Total
|
$3,225,000.00
|
$112,875.00
|
$3,112,125.00
|
|
(1)
See “Supplemental Plan of Distribution (Conflicts of Interest)” on the last page of this pricing supplement.
The
Securities:
|
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
|
UBS Financial Services Inc.
|
HSBC Securities (USA) Inc.
|
|
Additional Information about HSBC USA Inc. and the Securities
|
|
This
pricing supplement relates to the offering of Securities linked to the Index identified on the cover page. As a purchaser of a
Security, you will acquire a senior unsecured debt instrument linked to the Index,
which
will rank equally with all of our other unsecured and unsubordinated debt obligations. Although the offering of Securities relates
to the Index identified on the cover page, you should not construe that fact as a recommendation of the merits of acquiring an
investment linked to the Index, or as to the suitability of an investment in the Securities.
You should read
this document together with the prospectus dated March 22, 2012, the prospectus supplement dated March 22, 2012 and the Equity
Index Underlying Supplement dated March 22, 2012. If the terms of the Securities offered hereby are inconsistent with those described
in the accompanying Equity Index Underlying Supplement, prospectus supplement or prospectus, the terms described in this pricing
supplement shall control. You should carefully consider, among other things, the matters set forth in “Key Risks” beginning
on page 5 of this pricing supplement and in “Risk Factors” beginning on page S-1 of the Equity Index Underlying Supplement
and beginning on page S-3 of the prospectus supplement, as the Securities involve risks not associated with conventional debt securities.
You are urged to consult your investment, legal, tax, accounting and other advisors before you invest in the Securities.
HSBC USA Inc.
has filed a registration statement (including the Equity Index Underlying Supplement, prospectus and prospectus supplement) with
the SEC for the offering to which this pricing supplement relates. Before you invest, you should read the Equity Index Underlying
Supplement, prospectus and prospectus supplement in that registration statement and other documents HSBC USA Inc. has filed with
the SEC for more complete information about HSBC USA Inc. and this offering. You may get these documents for free by visiting EDGAR
on the SEC’s web site at www.sec.gov. Alternatively, HSBC Securities (USA) Inc. or any dealer participating in this offering
will arrange to send you the Equity Index Underlying Supplement, prospectus and prospectus supplement if you request them by calling
toll-free 1-866-811-8049.
You may access these documents on the SEC web
site at www.sec.gov as follows:
¨
Equity
Index Underlying Supplement dated March 22, 2012:
http://www.sec.gov/Archives/edgar/data/83246/000114420412016693/v306691_424b2.htm
¨
Prospectus
supplement dated March 22, 2012:
http://www.sec.gov/Archives/edgar/data/83246/000104746912003151/a2208335z424b2.htm
¨
Prospectus
dated March 22, 2012:
http://www.sec.gov/Archives/edgar/data/83246/000104746912003148/a2208395z424b2.htm
As used herein, references to
the “Issuer,” “HSBC”, “we,” “us” and “our” are to HSBC USA Inc. References
to the “prospectus supplement” mean the prospectus supplement dated March 22, 2012, references to “accompanying
prospectus” mean the HSBC USA Inc. prospectus, dated March 22, 2012 and references to the “Equity Index Underlying
Supplement” mean the Equity Index Underlying Supplement dated March 22, 2012.
|
|
Investor Suitability
|
|
The Securities may be suitable for you if:
¨
You
fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial investment.
¨
You
can tolerate a loss of all or a substantial portion of your Principal Amount and are willing to make an investment that may have
the same downside market risk as the Index.
¨
You
believe the Index will appreciate over the term of the Securities and you are willing to invest in the Securities based on the
Participation Rate of 105.83%.
¨
You
are willing to accept the risk and return profile of the securities versus a conventional debt security with a comparable maturity
issued by HSBC or another issuer with a similar credit rating.
¨
You
do not seek current income from your investment and are willing to forgo dividends paid on the stocks included in the Index.
¨
You
are willing to hold the Securities to maturity, a term of approximately five years, and accept that there may be little or no secondary
market for the Securities.
¨
You
are willing to assume the creditworthiness of HSBC, as Issuer of the Securities, and understand that if HSBC defaults on its obligations,
you may not receive any amounts due to you, including any repayment of principal.
|
|
The Securities may not be suitable for you if:
¨
You
do not fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial
investment.
¨
You
cannot tolerate a loss of all or a substantial portion of your Principal Amount, and you are not willing to make an investment
that may have the same downside market risk as the Index.
¨
You
believe that the level of the Index will decline during the term of the Securities and is likely to close below the Trigger Level
on the Final Valuation Date.
¨
You
require an investment designed to provide full return of principal at maturity.
¨
You
are unwilling to invest in the Securities based on the Participation Rate of 105.83%.
¨
You
prefer the lower risk, and therefore accept the potentially lower returns, of conventional debt securities with comparable maturities
issued by HSBC or another issuer with a similar credit rating.
¨
You
seek current income from your investment or prefer to receive the dividends paid on the stocks included in the Index.
¨
You
are unable or unwilling to hold the Securities to maturity, a term of approximately five years, or you seek an investment for which
there will be an active secondary market.
¨
You
are not willing or are unable to assume the credit risk associated with HSBC, as Issuer of the Securities, for any payment on the
Securities, including any repayment of principal.
|
The suitability considerations
identified above are not exhaustive. Whether or not the Securities are a suitable investment for you will depend on your individual
circumstances, and you should reach an investment decision only after you and your investment, legal, tax, accounting and other
advisors have carefully considered the suitability of an investment in the Securities in light of your particular circumstances.
You should also review “Key Risks” beginning on page 5 of this pricing supplement and “Risk Factors” beginning
on page S-1 of the Equity Index Underlying Supplement and beginning on page S-3 of the prospectus supplement.
|
Final Terms
|
|
Issuer
|
HSBC USA Inc.
|
|
Issue Price
|
$10.00 per Security
|
|
Principal Amount
|
$10.00 per Security
|
|
Term
|
Approximately five years
|
|
Trade Date
|
March 18, 2013
|
|
Settlement Date
|
March 22, 2013
|
|
Final Valuation Date
|
March 19, 2018, subject to adjustment as described under “Additional Terms of the Notes” in the accompanying Equity Index Underlying Supplement.
|
|
Maturity Date
|
March 23, 2018, subject to adjustment as described under “Additional Terms of the Notes” in the accompanying Equity Index Underlying Supplement.
|
|
Index
|
S&P 500
®
Index (Ticker: SPX)
|
|
Trigger Level
|
776.05, which is 50.00% of the Initial Level.
|
|
Participation Rate
|
105.83%
|
|
Payment at Maturity (per $10 Security)
1
|
If the Index Return is greater than zero
,
HSBC will pay a cash payment per Security that provides you with the $10 Principal Amount plus a return equal to the Index Return
multiplied by the Participation Rate, calculated as follows:
$10 + [$10
×
(Index Return
×
Participation Rate)]
If the Index Return is less than or equal
to zero and the Final Level is greater than or equal to the Trigger Level on the Final Valuation Date,
HSBC will pay
you
a cash payment of:
$10 per $10 Security
If the Final Level is less than the Trigger Level
on the Final Valuation Date,
HSBC will pay you a cash payment at maturity less than the Principal Amount of $10 per Security,
if anything, resulting in a loss of principal that is proportionate to the negative Index Return, equal to:
$10 + ($10
×
Index Return)
|
|
Index Return
|
Final Level – Initial
Level
Initial Level
|
|
Initial Level
|
1,552.10, which was the Official Closing Level of the Index on the Trade Date.
|
|
Final Level
|
The Official Closing Level of the Index on the Final Valuation Date.
|
|
Official Closing Level
|
The Official Closing Level on any scheduled trading day will be the closing level of the Index as determined by the calculation agent and based on the value displayed on Bloomberg Professional
®
service page “SPX <INDEX>”, or on any successor page on the Bloomberg Professional
®
service or any successor service, as applicable.
|
|
Calculation Agent
|
HSBC USA Inc. or one of its affiliates
|
|
CUSIP/ISIN
|
40433T133/US40433T1337
|
|
Investment Timeline
|
|
The Initial Level and the Trigger Level were determined and the Participation Rate was set.
|
|
The Final Level and Index Return are determined on
the Final Valuation Date.
If the Index Return is greater than zero, HSBC will
pay you a cash payment per Security that provides you with the $10 Principal Amount plus a return equal to the product of (i) the
Principal Amount multiplied by (ii) the Index Return multiplied by the Participation Rate, calculated as follows:
$10 + [$10 × (Index Return × Participation
Rate)].
If the Index Return is less than or equal to zero
and the Final Level is greater than or equal to the Trigger Level on the Final Valuation Date, HSBC will pay you a cash payment
of $10 per $10 Security.
If the Final Level is less than the Trigger Level
on the Final Valuation Date, HSBC will pay you a cash payment at maturity that will be less than the Principal Amount of $10 per
Security, resulting in a loss of principal that is proportionate to the negative Index Return, equal to:
$10 + ($10 × Index Return).
Under these circumstances, you will lose a significant
portion, and could lose all, of your Principal Amount.
|
Investing in the
Securities involves significant risks. You may lose some or all of your principal amount. Any payment on the Securities,
including any repayment of principal AT MATURITY, is subject to the creditworthiness of HSBC. If HSBC were to default on
its payment obligations, you may not receive any amounts owed to you under the Securities and you could lose your entire investment.
__________________________________________
1
Payment at maturity and any repayment of principal
is provided by HSBC USA Inc., and therefore, is dependent on the ability of HSBC USA Inc. to satisfy its obligations when they
come due.
An investment
in the Securities involves significant risks. Some of the risks that apply to the Securities are summarized here, but you are urged
to read the more detailed explanation of risks relating to the Securities generally in the “Risk Factors” section of
the accompanying Equity Index Underlying Supplement and the accompanying prospectus supplement. You are also urged to consult your
investment, legal, tax, accounting and other advisors before you invest in the Securities.
|
|
¨
|
Risk of Loss at Maturity –
The Securities differ from ordinary debt securities
in that HSBC will not necessarily pay the full Principal Amount of the Securities at maturity. The return on the Securities at
maturity is linked to the performance of the Index and will depend on whether, and to the extent which, the Index Return is positive
or negative and if the Index Return is negative, whether the Final Level is less than the Trigger Level. If the Final Level is
less than the Trigger Level, you will be fully exposed to any negative Index Return and HSBC will pay you less than the Principal
Amount at maturity, if anything, resulting in a loss of principal that is proportionate to the decline in the Final Level as compared
to the Initial Level.
Under these circumstances, you will lose a significant portion, and could lose all, of the Principal
Amount.
|
|
|
¨
|
The Contingent Repayment of Principal Applies Only if You Hold the Securities to Maturity
– You should be willing to hold your Securities to maturity. If you are able to sell your Securities prior to maturity
in the secondary market, you may have to sell them at a loss even if the Index level is above the Trigger Level.
|
|
|
¨
|
The Participation Rate Applies Only if You Hold the Securities to Maturity
– You
should be willing to hold your Securities to maturity. If you are able to sell your Securities prior to maturity in the secondary
market, the price you receive will likely not reflect the full economic value of the Participation Rate or the Securities themselves,
and the return you realize may be less than the Index's return, even if such return is positive. You can receive the full benefit
of the Participation Rate from HSBC only if you hold your Securities to maturity.
|
|
|
¨
|
The Amount Payable on the Securities Is Not Linked to the Level of the Index at Any Time
Other Than on the Final Valuation Date
– The Final Level will be based on the Official Closing Level of the Index on
the Final Valuation Date, subject to postponement for non-trading days and certain market disruption events. Even if the level
of the Index appreciates prior to the Final Valuation Date but then drops on the Final Valuation Date to at or below the Initial
Level, the Payment at Maturity will be less, and may be significantly less, than it would have been had the Payment at Maturity
been linked to the level of the Index prior to such drop. Although the actual level of the Index on the Maturity Date or at other
times during the term of the Securities may be higher than the Final Level, the Payment at Maturity will be based solely on the
Official Closing Level of the Index on the Final Valuation Date.
|
|
|
¨
|
Certain Built-in Costs Are Likely to Adversely Affect the Value of the Securities Prior to
Maturity
– Generally, the price of the Securities in the secondary market, if any, is likely to be lower than the initial
offering price since the issue price includes, and the secondary market prices are likely to exclude, hedging costs, commissions
and other compensation paid with respect to the Securities. You should be willing to hold your Securities to maturity. The Securities
are not designed to be short-term trading instruments. The price at which you will be able to sell your Securities to HSBC, its
affiliates or any party in the secondary market prior to maturity, if at all, may be at a substantial discount from the Principal
Amount of the Securities, even in cases where the Index has appreciated since the Trade Date.
|
|
|
¨
|
No Interest
– HSBC will not make any interest payments with respect to the Securities.
|
|
|
¨
|
Credit of Issuer
–
The Securities are senior
unsecured debt obligations of the Issuer, HSBC, and are not, either directly or indirectly, an obligation of any third party. As
further described in the accompanying prospectus supplement and prospectus, the Securities will rank on par with all of the other
unsecured and unsubordinated debt obligations of HSBC, except such obligations as may be preferred by operation of law. Any payment
to be made on the Securities, including any repayment of principal at maturity, depends on the ability of HSBC to satisfy its obligations
as they come due. As a result, the actual and perceived creditworthiness of HSBC may affect the market value of the Securities
and, in the event HSBC were to default on its obligations, you may not receive any amounts owed to you under the terms of the Securities
and could lose your entire investment.
|
|
|
¨
|
Owning the Securities Is Not the Same as Owning the Stocks Comprising the Index
–
The return on your Securities may not reflect the return you would realize if you actually owned the stocks included in the Index.
As a holder of the Securities, you will not have voting rights or rights to receive dividends or other distributions or other rights
that holders of the stocks included in the Index would have.
|
|
|
¨
|
The Securities Are Not Insured or Guaranteed by any Governmental
Agency of the United States or any Other Jurisdiction
– The Securities are not deposit liabilities or other obligations
of a bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency or program
of the United States or any other jurisdiction. An investment in the Securities is subject to the credit risk of HSBC, and in the
event
HSBC is unable to pay its obligations when due, you may not receive any amounts owed
to you under the Securities
and you could lose your entire investment.
|
|
|
¨
|
Lack of Liquidity
– The Securities will not be listed on any securities exchange
or quotation system. One of our affiliates may offer to repurchase the Securities in the secondary market but is not required to
do so and may cease any such market-making activities at any time without notice. Because other dealers are not likely to make
a secondary market for the Securities, the price at which you may be able to trade your Securities is likely to depend on the price,
if any, at which one of our affiliates is willing to buy the Securities. This price, if any, will exclude any fees or commissions
and therefore will generally be lower than such purchase price.
|
|
|
¨
|
Changes Affecting the Index
– The policies of the reference sponsor concerning
additions, deletions and substitutions of the stocks included in the Index and the manner in which the reference sponsor takes
account of certain changes affecting those stocks included in the Index may adversely affect the level of the Index. The policies
of the reference sponsor with respect to the calculation of the Index could also adversely affect the level of the Index. The reference
sponsor may discontinue or suspend calculation or dissemination of the Index. Any such actions could have an adverse effect on
the value of the Securities.
|
|
|
¨
|
Potential Conflict of Interest
– HSBC and its affiliates may engage in business
with the issuers of the stocks comprising the Index, which could affect the price of such stocks or the level of the Index and
thus, may present a conflict between the obligations of HSBC and you, as a holder of the Securities. Additionally, potential conflicts
of interest may exist between the Calculation Agent, which may be HSBC or any of its affiliates, and you with respect to certain
determinations and judgments that the Calculation Agent must make, which include determining the Payment at Maturity based on the
observed Final Level as well as whether to postpone the determination of the Final Level and the Maturity Date if a Market Disruption
Event occurs and is continuing on the Final Valuation Date.
|
|
|
¨
|
Potentially Inconsistent Research, Opinions or Recommendations by HSBC, UBS or Their Respective
Affiliates
– HSBC, UBS Financial Services Inc., or their respective affiliates may publish research, express opinions
or provide recommendations that are inconsistent with investing in or holding the Securities and which may be revised at any time.
Any such research, opinions or recommendations could affect the level of the Index or the price of the stocks included in the Index,
and therefore, the market value of the Securities.
|
|
|
¨
|
Market Price Prior to Maturity
– The market price of the Securities will be influenced
by many unpredictable and interrelated factors, including the level of the Index; the volatility of the Index; dividends; the time
remaining to the maturity of the Securities; interest rates in the markets in general; geopolitical conditions and economic, financial,
political, regulatory, judicial or other events; and the creditworthiness of HSBC.
|
|
|
¨
|
Potential HSBC Impact on Price
–
Trading or transactions by HSBC or any of its affiliates in the stocks comprising the Index or in futures, options, exchange-traded
funds or other derivative products on stocks comprising the Index, may adversely affect the market value of the stocks comprising
the Index, the level of the Index, and, therefore, the market value of your Securities
.
|
|
|
¨
|
Uncertain Tax Treatment
– There is no direct legal authority as to the proper tax
treatment of the Securities, and therefore significant aspects of the tax treatment of the Securities are uncertain as to both
the timing and character of any inclusion in income in respect of the Securities. Under one reasonable approach, the Securities
should be treated as pre-paid cash-settled executory contracts with respect to the Index. HSBC intends to treat the Securities
consistent with this approach and pursuant to the terms of the Securities, you agree to treat the Securities under this approach
for all U.S. federal income tax purposes. See “U.S. Federal Income Tax Considerations — Certain Equity-Linked Notes
— Certain Notes Treated as Forward Contracts or Executory Contracts” in the prospectus supplement for the U.S. federal
income tax considerations applicable to Securities that are treated as pre-paid cash-settled executory contracts. Because of the
uncertainty regarding the tax treatment of the Securities, we urge you to consult your tax advisor as to the tax consequences of
your investment in a Security.
|
In Notice 2008-2, the Internal
Revenue Service (“IRS”) and the Treasury Department requested comments as to whether the purchaser of an exchange traded
note or pre-paid forward contract (which may include the Securities) should be required to accrue income during its term under
a mark-to-market, accrual or other methodology, whether income and gain on such a note or contract should be ordinary or capital,
and whether foreign holders should be subject to withholding tax on any deemed income accrual. Accordingly, it is possible that
regulations or other guidance could provide that a U.S. holder (as defined in the prospectus supplement) of the Securities is required
to accrue income in respect of the Securities prior to the receipt of payments with respect to the Securities or their earlier
sale. Moreover, it is possible that any such regulations or other guidance could treat all income and gain of a U.S. holder in
respect of the Securities as ordinary income (including gain on a sale). Finally, it is possible that a non-U.S. holder (as defined
in the prospectus supplement) of the Securities could be subject to U.S. withholding tax in respect of the Securities. It is unclear
whether any regulations or other guidance would apply to the Securities (possibly on a retroactive basis). Prospective investors
are urged to consult with their tax advisors regarding Notice 2008-2 and the possible effect to them of the issuance of regulations
or other guidance that affects the U.S. federal income tax treatment of the Securities.
For a more complete discussion
of the U.S. federal income tax consequences of your investment in a Security, please see the discussion under “U.S. Federal
Income Tax Considerations” in the prospectus supplement.
|
Scenario Analysis and Examples at Maturity
|
The scenario
analysis and examples below are provided for illustrative purposes only and are hypothetical. They do not purport to be representative
of every possible scenario concerning increases or decreases in the level of the Index relative to the Initial Level. We cannot
predict the Final Level. You should not take the scenario analysis and these examples as an indication or assurance of the expected
performance of the Index. The numbers appearing in the examples below have been rounded for ease of analysis. The following scenario
analysis and examples illustrate the Payment at Maturity for a $10.00 Security based on the following terms:
|
Investment term:
|
Approximately five years
|
|
Initial Level:
|
1,552.10
|
|
Trigger Level:
|
776.05 (50.00% of the Initial Level)
|
|
Participation Rate:
|
105.83%
|
Example 1
—
The level
of the Index
increases
from the Initial Level of 1,552.10 to a Final Level of 1,707.31.
The Index Return is greater
than zero and expressed as a formula:
Index
Return = (1,707.31 –
1,552.10
) /
1,552.10
= 10.00%
Payment at Maturity
= $10 + [$10
×
(10.00%
×
105.83%)] = $11.0583
Because the Index Return
is equal to 10.00%, the Payment at Maturity is equal to $11.0583 per $10.00 Principal Amount of Securities, and the re
turn
on the Securities is 10.583%.
Example 2
—
The Final
Level is equal to the Initial Level of 1,552.10.
The Index Return is zero and expressed as a formula:
Index
Return = (
1,552.10
–
1,552.10
) /
1,552.10
= 0.00%
Payment at Maturity
= $10.0000
Because the Index Return is zero,
the Payment at Maturity per Security is equal to the original $10.00 Principal Amount per Security (a return of zero percent).
Example 3
—
The level
of the Index
decreases
from the Initial Level of 1,552.10 to a Final Level of 1,241.68.
The Index Return is negative
and expressed as a formula:
Index
Return = (1,241.68 -
1,552.10
) /
1,552.10
= -20.00%
Payment at Maturity
= $10.0000
Because the Index Return is less
than zero, but the Final Level is greater than or equal to the Trigger Level on the Final Valuation Date, HSBC will pay you a Payment
at Maturity equal to $10.00 per $10.00 Principal Amount of Securities (a return of zero percent).
Example 4
—
The level
of the Index
decreases
from the Initial Level of 1,552.10 to a Final Level of 310.42.
The Index Return is negative and
expressed as a formula:
Index
Return = (310.42 -
1,552.10
) /
1,552.10
= -80.00%
Payment at Maturity
= $10 + ($10
×
-80.00%) = $2.0000
Because the Index Return is less
than zero and the Final Level is below the Trigger Level on the Final Valuation Date, the Securities will be fully exposed to any
decline in the level of the Index on the Final Valuation Date. Therefore, the return on the Securities is -80.00%. In this case,
you would incur a loss of 80.00% on the Securities.
If the Final Level is below
the Trigger Level on the Final Valuation Date, the Securities will be fully exposed to any decline in the Index, and you will lose
some or all of your Principal Amount at maturity.
Scenario Analysis –
Hypothetical Payment at Maturity for each $10.00 Principal Amount of Securities.
|
Performance
of the Index*
|
Performance
of the Securities
|
|
Final
Level
|
Index
Return
|
Participation
Rate
|
Payment
at Maturity
|
Return
on Securities at Maturity
|
|
3,104.20
|
100.00%
|
105.83%
|
$20.5830
|
105.830%
|
|
2,948.99
|
90.00%
|
105.83%
|
$19.5247
|
95.247%
|
|
2,793.78
|
80.00%
|
105.83%
|
$18.4664
|
84.664%
|
|
2,638.57
|
70.00%
|
105.83%
|
$17.4081
|
74.081%
|
|
2,483.36
|
60.00%
|
105.83%
|
$16.3498
|
63.498%
|
|
2,328.15
|
50.00%
|
105.83%
|
$15.2915
|
52.915%
|
|
2,172.94
|
40.00%
|
105.83%
|
$14.2332
|
42.332%
|
|
2,017.73
|
30.00%
|
105.83%
|
$13.1749
|
31.749%
|
|
1,862.52
|
20.00%
|
105.83%
|
$12.1166
|
21.166%
|
|
1,707.31
|
10.00%
|
105.83%
|
$11.0583
|
10.583%
|
|
1,552.10
|
0.00%
|
N/A
|
$10.0000
|
0.000%
|
|
1,396.89
|
-10.00%
|
N/A
|
$10.0000
|
0.000%
|
|
1,241.68
|
-20.00%
|
N/A
|
$10.0000
|
0.000%
|
|
1,164.08
|
-25.00%
|
N/A
|
$10.0000
|
0.000%
|
|
931.26
|
-40.00%
|
N/A
|
$10.0000
|
0.000%
|
|
776.05
|
-50.00%
|
N/A
|
$10.0000
|
0.000%
|
|
620.84
|
-60.00%
|
N/A
|
$4.0000
|
-60.000%
|
|
465.63
|
-70.00%
|
N/A
|
$3.0000
|
-70.000%
|
|
310.42
|
-80.00%
|
N/A
|
$2.0000
|
-80.000%
|
|
155.21
|
-90.00%
|
N/A
|
$1.0000
|
-90.000%
|
|
0.00
|
-100.00%
|
N/A
|
$0.0000
|
-100.000%
|
*
The level of
the Index excludes cash dividend payments on the stocks included in the Index.
|
What Are the Tax Consequences of the Securities?
|
|
You should
carefully consider, among other things, the matters set forth in the section “U.S. Federal Income Tax Considerations”
in the prospectus supplement. The following discussion summarizes the U.S. federal income tax consequences of the purchase, beneficial
ownership, and disposition of each of the Securities. This summary supplements the section “U.S. Federal Income Tax Considerations”
in the prospectus supplement and supersedes it to the extent inconsistent therewith.
There are no
statutory provisions, regulations, published rulings or judicial decisions addressing the characterization for U.S. federal income
tax purposes of securities with terms that are substantially the same as those of the Securities. Under one reasonable approach,
the Securities should be treated as pre-paid cash-settled executory contracts with respect to the Index. HSBC intends to treat
the Securities consistent with this approach and pursuant to the terms of the Securities, you agree to treat the Securities under
this approach for all U.S. federal income tax purposes. Subject to certain limitations described in the prospectus supplement,
and based on certain factual representations received from HSBC, in the opinion of HSBC’s special U.S. tax counsel, Morrison
& Foerster LLP, it is reasonable to treat the Securities in accordance with this approach. Pursuant to this approach, HSBC
does not intend to report any income or gain with respect to the Securities prior to their maturity or an earlier sale or exchange
and HSBC intends to treat any gain or loss upon maturity or an earlier sale or exchange as long-term capital gain or loss, provided
that you have held the Security for more than one year at such time for U.S. federal income tax purposes. See "U.S. Federal
Income Tax Considerations — Certain Equity-Linked Notes — Certain Notes Treated as Forward Contracts or Executory Contracts"
in the prospectus supplement for the U.S. federal income tax considerations applicable to Securities that are treated as pre-paid
cash-settled executory contracts.
Because there
are no statutory provisions, regulations, published rulings or judicial decisions addressing the characterization for U.S. federal
income tax purposes of securities with terms that are substantially the same as those of the Securities, other characterizations
and treatments are possible and the timing and character of income in respect of the Securities might differ from the treatment
described above. For example, the Securities could be treated as debt instruments that are “contingent payment debt instruments”
for U.S. federal income tax purposes, subject to the treatment described under the heading “U.S. Federal Income Tax Considerations
— U.S. Federal Income Tax Treatment of the Notes as Indebtedness for U.S. Federal Income Tax Purposes — Contingent
Payment Debt Instruments” in the prospectus supplement.
In Notice 2008-2,
the Internal Revenue Service ("IRS") and the Treasury Department requested comments as to whether the purchaser of an
exchange traded note or pre-paid forward contract (which may include the Securities) should be required to accrue income during
its term under a mark-to-market, accrual or other methodology, whether income and gain on such a note or contract should be ordinary
or capital, and whether foreign holders should be subject to withholding tax on any deemed income accrual. Accordingly, it is possible
that regulations or other guidance could provide that a U.S. holder (as defined in the prospectus supplement) of the Securities
is required to accrue income in respect of the Securities prior to the receipt of payments with respect to the Securities or their
earlier sale. Moreover, it is possible that any such regulations or other guidance could treat all income and gain of a U.S. holder
in respect of the Securities as ordinary income (including gain on a sale). Finally, it is possible that a non-U.S. holder (as
defined in the prospectus supplement) of the Securities could be subject to U.S. withholding tax in respect of the Securities.
It is unclear whether any regulations or other guidance would apply to the Securities (possibly on a retroactive basis). Prospective
investors are urged to consult with their tax advisors regarding Notice 2008-2 and the possible effect to them of the issuance
of regulations or other guidance that affects the U.S. federal income tax treatment of the Securities.
We will not attempt
to ascertain whether any of the entities whose stock is included in, or owned by, the Index, as the case may be, would be treated
as a passive foreign investment company (“PFIC”) or United States real property holding corporation (“USRPHC”),
both as defined for U.S. federal income tax purposes. If one or more of the entities whose stock is included in, or owned by, the
Index, as the case may be, were so treated, certain adverse U.S. federal income tax consequences might apply. You should refer
to information filed with the SEC and other authorities by the entities whose stock is included in, or owned by, the Index, as
the case may be, and consult your tax advisor regarding the possible consequences to you if one or more of the entities whose stock
is included in, or owned by, the Index, as the case may be, is or becomes a PFIC or a USRPHC.
Withholding and
reporting requirements under the legislation enacted on March 18, 2010 (as discussed beginning on page S-48 of the 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, with respect to non-U.S. Holders, withholding due to any payment being
treated as a “dividend equivalent” (as discussed beginning on page S-47 of the 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 Securities.
PROSPECTIVE
PURCHASERS OF THE SECURITIES SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES
TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SECURITIES.
|
|
The S&P 500
®
Index
|
|
Description of the Index
The Index is a capitalization-weighted
index of 500 U.S. stocks. It is designed to measure performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries.
The top 5 industry groups by market capitalization
as of March 18, 2013 were: Information Technology, Financials, Health Care, Consumer Discretionary and Energy.
In September 2012, S&P Dow Jones Indices LLC updated
its index methodology so that, subject to several exceptions, shareholdings by specified types of insiders that represent more
than 5% of the outstanding shares of a security are removed from the float for purposes of calculating the SPX.
For more information about the Index, see “The
S&P 500
Ò
Index” on page S-6 of the accompanying Equity Index
Underlying Supplement.
|
Historical Performance of the Index
The following graph sets forth the historical performance
of the Index based on the daily historical closing levels from March 18, 2008 to March 18, 2013 as reported on the Bloomberg Professional
®
service. We have not undertaken any independent review of, or made any due diligence inquiry with respect to, the information obtained
from the Bloomberg Professional
®
service. The historical levels of the Index should not be taken as an indication
of future performance.
Source: Bloomberg Professional
®
service
The Official Closing Level of the Index on March
18, 2013 was 1,552.10
|
|
License Agreement
Standard
& Poor’s
®
and S&P
®
are registered trademarks of Standard & Poor’s Financial
Services LLC (“S&P”); Dow Jones
®
is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow
Jones”); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC. “Standard & Poor’s
®
”,
“S&P 500
®
” and “S&P
®
” are trademarks of S&P and have been licensed
for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by HSBC. The S&P 500
®
Index (the “Index”) is a product of S&P Dow Jones Indices LLC, and has been licensed for use by HSBC.
The
Securities 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 Securities or any member of the public regarding the advisability of investing in securities
generally or in the Securities 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 Securities. S&P Dow Jones Indices has no obligation to take the needs of HSBC or the holders
of the Securities 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 Securities or the timing of the issuance or
sale of the Securities or in the determination or calculation of the equation by which the Securities 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
Securities. 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 Securities currently being issued by HSBC, but which may be similar to and competitive with the Securities. 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 Index and the Securities.
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.
|
|
Events of Default and Acceleration
|
|
If the Securities have become
immediately due and payable following an event of default (as defined in the accompanying prospectus) with respect to the Securities,
the Calculation Agent will determine the accelerated payment due and payable at maturity in the same general manner as described
in “Final Terms” in this pricing supplement. In that case, the scheduled trading day preceding the date of acceleration
will be used as the Final Valuation Date for purposes of determining the Index Return. If a Market Disruption Event exists with
respect to the Index on that scheduled trading day, then the accelerated Final Valuation Date for the Index will be postponed for
up to five scheduled trading days (in the same manner used for postponing the originally scheduled Final Valuation Date). The accelerated
Maturity Date will also be postponed by an equal number of business days.
If the Securities have become
immediately due and payable following an event of default, you will not be entitled to any additional payments with respect to
the Securities. For more information, see “Description of Debt Securities — Senior Debt Securities — Events of
Default” in the accompanying prospectus.
|
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
|
Pursuant to the terms of a distribution
agreement, HSBC Securities (USA) Inc., an affiliate of HSBC, will purchase the Securities from HSBC for distribution to UBS Financial
Services Inc. (the “Agent”). HSBC has agreed to sell to the Agent, and the Agent has agreed to purchase, all of the
Securities at the price indicated on the cover of this pricing supplement. The Agent may allow a concession not in excess of the
underwriting discount set forth on the cover of this pricing supplement to its affiliates for distribution to brokerage accounts.
HSBC has agreed to indemnify the Agent against liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that the Agent may be required to make relating to these liabilities as described in the prospectus
supplement and the prospectus.
Subject to regulatory constraints,
HSBC USA Inc. (or an affiliate thereof) intends to offer to purchase the Securities in the secondary market, but is not required
to do so and may cease making such offers at any time. HSBC or its affiliate will enter into swap agreements or related hedge transactions
with one of its other affiliates or unaffiliated counterparties, which may include the Agent, in connection with the sale of the
Securities and the Agent and/or an affiliate may earn additional income as a result of payments pursuant to the swap or related
hedge transactions.
In addition, HSBC Securities
(USA) Inc. or another of its affiliates or agents may use this pricing supplement in market-making transactions after the initial
sale of the Securities, but is under no obligation to make a market in the Securities and may discontinue any market-making activities
at any time without notice.
See “Supplemental Plan
of Distribution (Conflicts of Interest)” on page S-49 in the accompanying prospectus supplement.
|