Calculation
of Registration Fee
Title of Each Class of
Securities Offered
|
|
Maximum Aggregate
Offering Price
|
|
Amount of
Registration Fee
(1)
|
|
Debt Securities
|
|
$24,401,970
|
|
$3,328.43
|
(1)
Calculated in accordance with Rule 457 (r) of
the Securities Act of 1933, as amended.
|
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-180289
(To Prospectus dated March 22, 2012,
Prospectus Supplement dated March 22, 2012 and
|
Product Supplement ARN-2 dated March 27, 2012)
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 ARN-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.
_________________________
|
|
Per Unit
|
Total
|
|
Public offering price
(1)
|
$ 10.00
|
$ 24,401,970.00
|
|
Underwriting discount
(1)
|
$ 0.20
|
$ 488,039.40
|
|
Proceeds, before expenses, to HSBC
|
$ 9.80
|
$ 23,913,930.60
|
|
|
(1)
|
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.
March 28, 2013
2,440,197 Units
$10 principal amount
per unit
CUSIP No. 40433T265
Pricing Date March
28, 2013
Settlement Date April
5, 2013
Maturity Date May
29, 2014
Accelerated Return
Notes
®
Linked to the Russell 2000
®
Index
|
|
§
|
Maturity
of approximately 14 months
|
|
|
§
|
3-to-1
upside exposure to increases
in the Index, subject to
a capped return of 14.13%
|
|
|
§
|
1-to-1
downside exposure to decreases
in the Index, with 100%
of your investment at risk
|
|
|
§
|
All
payments occur at maturity
and are subject to the credit
risk of HSBC USA Inc.
|
§
No
listing on any securities exchange
Summary
The Accelerated Return Notes
®
Linked to the Russell
2000
®
Index, due May 29, 2014 (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 Russell 2000
®
Index (the “Index”) is greater than the Starting Value. If the Ending Value is less than the Starting Value,
you will lose all or a portion 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:
|
|
§
|
Product supplement ARN-2 dated March 27, 2012:
http://sec.gov/Archives/edgar/data/83246/000114420412017418/v307213_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
|
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 ARN-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:
You
will receive per unit,
up to a maximum payment not to exceed the Capped Value:
You
will receive per unit:
If
the Ending Value is less than the Starting Value, you will lose all or a portion of the principal amount of your notes.
Original Offering
Price:
$10.00 per unit
Term:
Approximately
14 months
Market Measure:
The
Russell 2000
®
Index (Bloomberg symbol: “RTY”), a price return index.
Starting Value:
951.54
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 on page S-22 of product supplement
ARN-2.
Capped Value:
$11.413
per unit of the notes, which represents a return of 14.13% over the Original Offering Price.
Maturity Valuation
Period:
May 19, 2014, May 20, 2014, May 21, 2014, May 22, 2014, and May 23, 2014
Participation Rate:
300%
Calculation Agent:
Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and HSBC, acting jointly.
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.
§
No
listing on any securities exchange
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
the Ending 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
|
Accelerated Return Notes
®
|
This graph reflects the returns on
the notes, based on the Participation Rate of 300% and the Capped Value of $11.413 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.
|
§
No
listing on any securities exchange
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, Ending Value, and term of your investment.
The following table is based on a Starting Value of 100, the
Participation Rate of 300%, and the Capped Value of $11.413 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
|
Percentage
Change from the Starting Value to the Ending Value
|
Redemption
Amount per Unit
|
Total
Rate of Return on the Notes
|
|
60.00
|
-40.00%
|
$6.000
|
-40.00%
|
|
70.00
|
-30.00%
|
$7.000
|
-30.00%
|
|
80.00
|
-20.00%
|
$8.000
|
-20.00%
|
|
90.00
|
-10.00%
|
$9.000
|
-10.00%
|
|
94.00
|
-6.00%
|
$9.400
|
-6.00%
|
|
97.00
|
-3.00%
|
$9.700
|
-3.00%
|
|
100.00
(1)
|
0.00%
|
$10.000
|
0.00%
|
|
103.00
|
3.00%
|
$10.900
|
9.00%
|
|
106.00
|
6.00%
|
$11.413
(2)
|
14.13%
|
|
110.00
|
10.00%
|
$11.413
|
14.13%
|
|
120.00
|
20.00%
|
$11.413
|
14.13%
|
|
130.00
|
30.00%
|
$11.413
|
14.13%
|
|
140.00
|
40.00%
|
$11.413
|
14.13%
|
|
150.00
|
50.00%
|
$11.413
|
14.13%
|
|
160.00
|
60.00%
|
$11.413
|
14.13%
|
|
|
(1)
|
The
hypothetical
Starting Value of 100 used in these examples has been chosen for illustrative purposes only. The actual
Starting Value is 951.54, which was the closing level of the Index on the pricing date.
|
|
|
(2)
|
The Redemption Amount per unit cannot exceed the 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.
§
No
listing on any securities exchange
Redemption Amount Calculation Examples
|
Example 1
|
|
The Ending Value is 80.00, or 80.00% of the Starting Value:
|
|
Starting Value: 100.00
|
|
Ending Value: 80.00
|
|
= $8.00
Redemption Amount per unit
|
|
Example 2
|
|
The Ending Value is 102.00, or 102.00% of the Starting Value:
|
|
Starting Value: 100.00
|
|
Ending Value: 102.00
|
|
= $10.60
Redemption Amount per unit
|
|
Example 3
|
|
The Ending Value is 130.00, or 130.00% of the Starting Value:
|
|
Starting Value: 100.00
|
|
Ending Value: 130.00
|
|
= $19.00, however, because the Redemption Amount for the notes cannot exceed the Capped Value, the Redemption Amount will be $11.413 per unit
|
§
No
listing on any securities exchange
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 receive dividends or other distributions by the issuers of these securities.
|
|
|
§
|
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-34 of product supplement ARN-2.
|
§
No
listing on any securities exchange
The Index
All disclosures in this term sheet regarding the Index have
been derived from publicly available sources, which we have not independently verified. The information summarizes the current
index methodology as published by Russell Investment Group (“Russell,” or the “Index Sponsor”) and may
be changed by Russell at any time. Additional information on the Index is available at the following website: http://www.russell.com.
No information on that website is deemed to be included or incorporated by reference in this term sheet.
“Russell 2000
®
” and “Russell
3000
®
” are trademarks of Russell and have been licensed for use by us. The notes are not sponsored, endorsed,
sold, or promoted by Russell, and Russell makes no representation regarding the advisability of investing in the notes.
Russell Investment Group Publishes the Index
The Index is calculated, published, and disseminated by the
Index Sponsor, and measures the composite price performance of stocks of 2,000 companies determined by Russell to be part of the
U.S. equity market. All 2,000 stocks are traded on a major U.S. exchange, and form a part of the Russell 3000
®
Index. The Russell 3000
®
Index is composed of the 3,000 largest United States companies as determined by market
capitalization and represents approximately 98.00% of the United States equity market.
The Index consists of the smallest 2,000 companies included
in the Russell 3000
®
Index. The Index is designed to track the performance of the small capitalization segment of
the United States equity market. Real-time dissemination of the Index began on January 1, 1987. The top five industry groups
by market capitalization as of May 31, 2012 were: Financial Services, Consumer Discretionary, Producer Durables, Technology and
Health Care.
Only stocks belonging to companies domiciled in the U.S. are
allowed into the Index. This is determined by examining the country of incorporation, country of headquarters and country of most
liquid exchange. Preferred and convertible preferred stock, redeemable shares, warrants, participating preferred stock, trust receipts,
rights, pink sheets, OTC Bulletin Board companies and closed-end mutual funds are excluded from the Index. Real Estate Investment
Trusts and Beneficial Trusts however, are eligible for inclusion.
In general, only one class of securities of a company is allowed
in the Index, although exceptions to this general rule have been made where the Russell has determined that each class of securities
acts independently of the other. Stocks must trade at or above $1.00 on the last trading day in May of each year to be eligible
for inclusion in the Index. However, if a stock falls below $1.00 on the last day of May, it will be considered eligible if the
daily closing during the month of May is equal to or greater than $1.00.
The primary criterion used to determine the initial list of
securities eligible for the Russell 3000
®
Index is total market capitalization, which is defined as the price of
a company’s shares times the total number of available shares, as described below. Based on closing values on the last trading
day of May of each year, the Russell reconstitutes the composition of the Russell 3000
®
Index using the then existing
market capitalizations of eligible companies. As of the last Friday in June of each year, the Russell Index is adjusted to reflect
the reconstitution of the Russell 3000
®
Index for that year. If, however, the last Friday is the 28
th
,
29
th
or 30
th
, reconstitution will occur on the preceding Friday.
Computation of the Index
The Index is a capitalization-weighted index. The Index reflects
changes in the market value (i.e. capitalization) of the component stocks relevant to their market value on a base date. The Index
is determined by adding the market values of the component stocks, which are determined by multiplying the price of each stock
as of the last trading day in May by the number of total outstanding shares, to obtain the total market capitalization of the 2,000
stocks. The total market capitalization is then divided by a divisor, which gives the adjusted capitalization of the Index on the
base date of December 31, 1978 (when calculated by Russell). For each security, the most recently traded price on the last
trading day in May will be used in determining the Index. If a component security is not open for trading on its primary market,
the lowest price from another market will be used.
Capitalization Adjustments
Available shares are assumed to be shares available for trading.
Exclusion of capitalization held by other listed companies and large holdings of private investors (10% or more) is based on information
recorded in SEC filings. Other sources are used in cases of missing or questionable data.
The following types of shares are considered unavailable for the purposes of capitalization determinations:
|
|
·
|
Initial
Public Offering lock-ups – shares that are locked up during
an initial public offering (“IPO”) will be considered
unavailable at the time the IPO enters the index;
|
ing on any securities exchange
|
|
·
|
Government
holdings – shares held directly by government holders will
be considered unavailable and removed completely; shares held
by government investment boards and/or investment arms will be
removed if the holding is 10% or more; and, shares held by government
pension plans will be considered institutional holdings and will
not be removed;
|
|
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·
|
ESOP or LESOP shares – shares
of corporations that have Employee Stock Ownership Plans (“ESOP”) or Leveraged Employee
Stock Ownership Plans (“LESOP”) that comprise 10% or more of the shares outstanding
are adjusted;
|
|
|
|
|
|
|
·
|
Corporate cross-owned shares – when shares
of a company in the Index are held by another company also in the Index, this is considered corporate cross-ownership. Any percentage
held in this class will be adjusted;
|
|
|
|
|
|
|
·
|
Large private and corporate shares
– when an individual, a group of individuals acting together, or a corporation not in the
index owns more than 10% of the shares outstanding. However, institutional holdings (investment
companies, partnerships, insurance companies, mutual funds, banks, or venture capital companies)
are not included in this class; and
|
|
|
|
|
|
|
·
|
Unlisted share classes – classes
of common stock that are not traded on a United States securities exchange or NASDAQ will be adjusted.
|
Corporate Action Adjustments
Annual reconstitution is the process by which the Index is completely
rebuilt. Reconstitution is a vital part of the creation of a benchmark which accurately represents a particular market segment.
Companies may get larger or smaller over time, or change in their characteristics. When a stock is acquired, delisted, or moves
to the pink sheets or bulletin boards, the stock is deleted from the Index at either the current day at the stock’s last
traded price or, the following day at the closing over-the-counter (“OTC”) Bulletin Board price. The following summarizes
the types of the Index maintenance adjustments and indicates whether or not an index adjustment is required:
|
|
·
|
“No Replacement”
Rule – Securities that leave the Index for any reason (e.g. mergers, acquisitions, or other similar corporate activity) are
not replaced. Therefore, the number of securities in the Index will fluctuate according to corporate activity.
|
|
|
|
|
|
|
·
|
Mergers and Acquisitions –
When acquisitions or mergers take place between constituent companies, the stock’s capitalization moves to the acquiring
stock; as a result, mergers have no effect on the total capitalization of the Index. Shares are updated for the acquiring stock
at the time the transaction is final. If the action is determined to be final after 1:00 p.m. Eastern time, the action will be
delayed and applied on the following day. If the acquiring company is a member but the acquired company is not, the acquiring company’s
shares will be adjusted at the month end. If, however, the acquiring company is not a member, the target will be deleted from the
Index after the action is final.
|
|
|
|
|
|
|
·
|
Deleted Stocks – When deleting stocks from
the Index as a result of exchange delisting or reconstitution, the price used is the last traded price on the day of deletion,
including potentially the OTC Bulletin Board price. Previously, prices used to reflect delisted stocks were the last traded price
on their primary exchange. There may be corporate events, like mergers or acquisitions that result in the lack of a current market
price for the deleted security and in such an instance the latest primary exchange closing price available will be used.
|
|
|
|
|
|
|
·
|
Additions for Spin-Offs –
Spin-off companies are added to the parent company’s index and capitalization tier of membership, if the spin-off is large
enough. To be eligible, the spun-off company’s total market capitalization must be greater than the market-adjusted total
market capitalization of the smallest security in the Index at the latest reconstitution.
|
|
|
|
|
|
|
·
|
Quarterly IPO Additions –
Eligible companies that have recently completed an IPO are added to the Index at the end of each calendar quarter based on total
market capitalization ranking within the market-adjusted capitalization breaks established during the most recent reconstitution.
Market adjustments will be made using the returns of the Russell 3000
®
Index. Eligible companies will be added to
the Index using their industry’s average style probability established at the latest constitution. In order for a company
to be added to the Index in a quarter (outside of reconstitution), the IPO company must meet all Russell U.S. Index eligibility
requirements. Also, the IPO company must meet the following criteria on the final trading day of the month prior to quarter-end:
(i) priced and traded; (ii) rank larger in total market capitalization than the market-adjusted smallest company in the
Index as of the latest June reconstitution; and (iii) meet criteria (i) and (ii) during an initial offering period.
|
|
|
·
|
Reincorporations - Members of the Index that are
reincorporated to another country are analyzed for country assignment the following year during reconstitution, as long as they
continue to trade in the U.S. Companies that reincorporate and no longer trade in the U.S. are immediately deleted from the U.S.
indexes and placed in the appropriate country within the Russell Global Index. Those that reincorporate to the U.S. during the
year will be assessed during reconstitution for membership.
|
|
|
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·
|
Rights Offerings – Russell will only adjust the index to account for a right if the subscription
price of the right is at a discount from the market price.
|
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§
No
listing on any securities exchange
|
|
·
|
Tender offers – A company that is acquired
through a tender offer will be removed from the Index if (i) the initial tender offer expires; (ii) the shareholders validly tendered;
(iii) all regulatory requirements have been fulfilled and (iv) the acquiring company is able to finalize the acquisition.
|
|
|
|
|
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|
·
|
Bankruptcy and Voluntary Liquidations – A company
that has filed for Chapter 7 or has filed a liquidation plan will be removed from the Index at the time of filing. If a company
files for Chapter 11 bankruptcy, it will not be delisted unless it is delisted from the primary exchange.
|
|
|
|
|
|
|
·
|
Dividends – Gross dividends are included in
the daily total return calculation of the Index on the basis of their ex-dates rather than the pay-date because this is when the
marketplace price adjustment occurs.
|
|
|
|
|
|
|
·
|
Stock Distributions – When a stated amount
of shares are distributed on the ex-date, price adjustment and shares are increased on the ex-date. When an undetermined amount
of shares are to be distributed at a future date based on earnings and profits, the price adjustment will occur on the ex-date
and the shares will be increased on the pay-date.
|
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Halted Securities – When a stock’s trading
is halted, the Index will hold the security at its most recent closing price until trading resumes or delisting occurs unless the
stock is halted for 40 days or more or due to exchange rules or regulatory issues for more than one quarter, in which case Russell
will review the situation on a case by case basis.
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Each month, the Index is updated for changes to shares outstanding
as companies report changes in share capital to the SEC. Only cumulative changes to shares outstanding greater than are reflected
in the Index. This does not affect treatment of major corporate events, which are ordinarily effective on the ex-date.
The following graph shows the monthly historical performance
of the Index in the period from January 2007 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 the pricing date, the
closing level of the Index was 951.54.
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
The notes are not sponsored, endorsed, sold or promoted by Frank Russell Company (“Frank Russell”).
Frank Russell makes no representation or warranty, express or implied, to the owners 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 Russell 2000
®
Index to track general stock market
§
No
listing on any securities exchange
performance or a segment of the same. Frank
Russell’s publication of the Russell 2000
®
Index in no way suggests or implies an opinion by Frank Russell
as to the advisability of investment in any or all of the securities upon which the Russell 2000
®
Index is based.
Frank Russell’s only relationship to HSBC is the licensing of certain trademarks and trade names of Frank Russell and of
the Russell 2000
®
Index which is determined, composed and calculated by Frank Russell without regard to the HSBC
or the notes. Frank Russell is not responsible for and has not reviewed the notes nor any associated literature or publications
and Frank Russell makes no representation or warranty express or implied as to their accuracy or completeness, or otherwise. Frank
Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the notes. Frank Russell
has no obligation or liability in connection with the administration, marketing or trading of the notes:
FRANK RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN AND FRANK RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
FRANK RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO THE OBTAINED BY HSBC, INVESTORS, OWNERS OF THE NOTES, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN. FRANK RUSSELL MAKES
NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING,
IN NO EVENT SHALL FRANK RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
§
No
listing on any securities exchange
Supplement to the Plan of Distribution
We will 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, 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.
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 ARNs” beginning on page S-9 and “Use of Proceeds”
on page S-19 of product supplement ARN-2.
§
No
listing on any securities exchange
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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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 ARN-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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No assurance can be given that the IRS or any court will agree with this characterization and tax treatment.
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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.
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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-34 of product supplement ARN-2.
Validity of the Notes
In the opinion of Morrison & Foerster LLP, as counsel to the Issuer, when the notes offered by this
term sheet have been executed and delivered by the Issuer and authenticated by the trustee pursuant to the Senior Indenture referred
to in the prospectus supplement dated March 22, 2012, and issued and paid for as contemplated herein, such notes will be valid,
binding and enforceable obligations of the Issuer, entitled to the benefits of the Senior Indenture, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of
general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith). This opinion
is given as of the date hereof and is limited to the laws of the State of New York, the Maryland General Corporation Law (including
the statutory provisions, all applicable provisions of the Maryland Constitution and the reported judicial decisions interpreting
the foregoing) and the federal laws of the United States of America. This opinion is subject to customary assumptions about the
trustee’s authorization, execution and delivery of the Senior Indenture and the genuineness of signatures and to such counsel’s
reliance on the Issuer and other sources as to certain factual matters, all as stated in the legal opinion dated July 27, 2012,
which has been filed as Exhibit 5.1 to the Issuer’s Current Report on Form 8-K dated July 27, 2012.
§
No
listing on any securities exchange
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.
“Accelerated Return Notes
®
”
and “ARNs
®
” are registered service marks of Bank of America Corporation, the parent company of MLPF&S.
General Steel (CE) (USOTC:GSIH)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024
General Steel (CE) (USOTC:GSIH)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024
