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Filed
Pursuant to Rule 424(b)(2)
Registration
No. 333-158385
PRICING
SUPPLEMENT
(To
Prospectus dated April 2, 2009,
Prospectus
Supplement dated April 9, 2009,
and
Product Supplement dated April 9,
2009)
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Structured
Investments
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HSBC
USA Inc.
$
6,341,000
Return
Enhanced Notes Linked to an Equally Weighted Basket of Eight Components,
Consisting of the Respective Common Stocks of the Reference Asset Issuers,
due March 31, 2011
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General
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·
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Terms
used in this pricing supplement are described or defined herein, in the
accompanying product supplement, prospectus supplement and prospectus. The
Notes offered will have the terms described in the product supplement,
prospectus supplement or prospectus. The Notes are not principal
protected, and you may lose up to 100.00% of your initial
investment.
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·
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All
references to “Enhanced Market Participation Notes” in the product
supplement shall refer to these Return Enhanced
Notes.
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·
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This
pricing supplement relates to a single note offering. The purchaser of a
Note will acquire a security linked to the Reference Asset described
below.
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·
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Although
the offering relates to a Reference Asset, you should not construe that
fact as a recommendation as to the merits of acquiring an investment
linked to the Reference Asset, any Basket Component or any securities
derivative of or relating to a Basket Component nor as to the suitability
of an investment in the related
Notes.
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·
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Senior
unsecured debt obligations of HSBC USA Inc. maturing March 31,
2011.
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·
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Minimum
purchase of $10,000. Minimum denominations of $1,000 and
integral multiples thereof.
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·
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If the terms of the Notes set
forth below are inconsistent with those described in the accompanying
product supplement, the terms set forth below will
supersede.
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Key Terms
Issuer
Rating:
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AA-
(S&P), A1 (Moody’s), AA
(Fitch)*
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Reference
Asset:
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The
Notes are linked to an equally weighted basket (the “Basket”) consisting
of the respective common stocks of the Reference Asset Issuers (each such
common stock a “Basket Component” and together, the “Basket
Components”).
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Reference
Asset Issuers:
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Chesapeake
Energy Corporation (“CHK”), El Paso Corporation (“EP”), Southwestern
Energy Company (“SWN”), Petrohawk Energy Corporation (“HK”), Pioneer
Natural Resources Company (“PXD”), Range Resources Corporation (“RRC”),
SandRidge Energy, Inc. (“SD”), and Mariner Energy, Inc. (“ME”) (each a
“Reference Asset Issuer”).
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Component
Weighting:
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With
respect to each Basket Component,
12.50%.
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Principal
Amount:
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$1,000
per Note.
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Trade
Date:
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March
12, 2010
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Pricing
Date:
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March
12, 2010
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Original
Issue Date:
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March
17, 2010
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Final
Valuation Date:
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March
28, 2011, subject to adjustment as described herein and in the
accompanying product supplement.
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Observation
Period:
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The
period beginning on and excluding the Pricing Date and ending on and
including the Final Valuation Date.
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Maturity
Date:
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3
business days after the Final Valuation Date and is expected to be March
31, 2011. The Maturity Date is subject to further adjustment as
described under “Market Disruption Events” herein and under “Specific
Terms of the Notes — Market Disruption Events” in the accompanying product
supplement.
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Upside
Participation Rate:
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300%
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Maximum
Cap:
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31.20%. In no event will the return on
your Notes exceed the Maximum Cap of 31.20%. This means the
Payment at Maturity per $1,000 Principal Amount of Notes will not exceed
$1,312.00.
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Payment
at Maturity:
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For
each Note, if the Basket Return is positive or zero, you will receive a
cash payment on the Maturity Date that is based on the Basket Return,
subject to the Maximum Cap, equal to the lesser of (a) $1,000 + ($1,000 ×
Basket Return × Upside Participation Rate); or (b) $1,000 + ($1,000 ×
Maximum Cap).
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Note
that the Basket Return will never exceed the Maximum Cap of
31.20%.
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For each Note, if the Basket Return
is negative, you will receive a cash payment on the Maturity Date that is based
on the Basket Return, equal to $1,000 + ($1,000 × Basket Return). If the Basket
Ending Level is less than the Basket Starting Level you will lose some or all of
your investment. This
means that if the Basket Return is -100.00%, you will lose your entire
investment.
Basket
Return:
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The
quotient, expressed as a percentage, of (i) the Basket Ending Level minus
the Basket Starting Level divided by (ii) the Basket Starting Level,
expressed as a formula:
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Basket Ending Level –
Basket Starting Level
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Basket
Starting Level:
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100
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Basket
Ending Level:
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The
Basket Closing Level on the Final Valuation
Date.
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Basket
Closing Level:
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The
Basket Closing Level will be calculated as
follows:
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100
× [1 + (the sum of the Basket Component return multiplied by the Component
Weighting, for each Basket
Component)]
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Each
of the Basket Component returns set forth in the formula above refers to
the return for the relevant Basket Component, which reflects the
performance of the relevant Basket Component, expressed as the percentage
change from the Initial Price of that Basket Component to the Final Price
of that Basket Component.
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Initial
Price:
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The
Official Closing Prices (as defined below) of the respective Basket
Components as determined by the calculation agent on the Pricing Date,
which, with respect to CHK, was 25.64, with respect to EP, was 11.43, with
respect to SWN, was 44.36, with respect to HK, was 22.19, with respect to
PXD, was 52.78, with respect to RRC, was 51.33, with respect to SD, was
8.22, and with respect to ME, was
15.75.
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Final
Price:
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With
respect to each Basket Component, the Official Closing Price of the
respective Basket Component on the Final Valuation Date, adjusted as
described under “Adjustments” below by the calculation
agent.
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Official
Closing Price:
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With
respect to each Basket Component, the Official Closing Price on any
scheduled trading day during the Observation Period will be the relevant
official price of one share of such Basket Component on the relevant
exchange for such Basket Component as of the close of the regular trading
session of such exchange and as reported in the official price
determination mechanism for such exchange. If the Basket
Component is not listed or traded as described above for any reason other
than a market disruption event (as defined below), then the Official
Closing Price for the Basket Component on any scheduled trading day will
be the average, as determined by the calculation agent, of the bid prices
for one share of the Basket Component obtained from as many dealers in the
Reference Asset selected by the calculation agent as will make those bid
prices available to the calculation agent. The number of dealers need not
exceed three and may include the calculation agent or any of its or our
affiliates.
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CUSIP/ISIN:
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4042K0T47
/ US4042K0T470
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Form
of Notes:
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Book-Entry
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Listing:
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The
Notes will not be listed on any U.S. securities exchange or quotation
system.
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* A
credit rating reflects the creditworthiness of HSBC USA Inc. and is not a
recommendation to buy, sell or hold securities, and it may be subject to
revision or withdrawal at any time by the assigning rating organization. The
Notes themselves have not been independently rated. Each rating should be
evaluated independently of any other rating.
Investment
in the Notes involves certain risks. You should refer to “Selected Risk
Considerations” beginning on page PS-3 of this document and “Risk Factors” on
page PS-4 of the product supplement and page S-3 of the prospectus
supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the Notes or determined that this pricing supplement,
or the accompanying product supplement, prospectus supplement and prospectus, is
truthful or complete. Any representation to the contrary is a
criminal offense.
The Notes
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 of the United States or any other jurisdiction and involve
investment risks including possible loss of the principal amount invested due to
the credit risk of HSBC. HSBC Securities (USA) Inc. or another of our
affiliates or agents may use this pricing supplement in market-making
transactions in any Notes after their initial sale. Unless we or our agent informs you
otherwise in the confirmation of sale, this pricing supplement is being used in
a market-making transaction. HSBC Securities (USA) Inc., an affiliate of
ours, will purchase the Notes from us for distribution to the placement
agent. See “Supplemental Plan of Distribution (Conflicts of
Interest)” on page PS-16 of this pricing supplement. We have appointed J.P.
Morgan Securities Inc. as placement agent for the sale of the
Notes. J.P. Morgan Securities Inc. will offer the Notes to investors
directly or through other registered broker-dealers.
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Price
to Public(1)
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Fees
and Commissions
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Proceeds
to Issuer
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Per
Note
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$1,000
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$10
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$990
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Total
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$6,341,000
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$63,410
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$6,277,590
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(1) Certain fiduciary accounts will pay a
purchase price of $990 per Note, and the placement agents with respect to sales
made to such accounts will forgo any fees.
Additional Terms Specific to the
Notes
This
pricing supplement relates to a single note offering linked to the Reference
Asset identified on the cover page. The purchaser of a Note will acquire a
senior unsecured debt security linked to the Reference
Asset. Although the note offering relates only to the Reference Asset
identified on the cover page, you should not construe that fact as a
recommendation as to the merits of acquiring an investment linked to the Basket,
any Basket Component or any securities derivative of or relating to a Basket
Component, or as to the suitability of an investment in the Notes.
You
should read this document together with the prospectus dated April 2, 2009, the
prospectus supplement dated April 9, 2009 and the product supplement dated April
9, 2009. If the terms of the Notes offered hereby are inconsistent
with those described in the accompanying product 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 “Selected Risk Considerations” beginning on page PS-3 of
this pricing supplement and “Risk Factors” on page PS-4 of the product
supplement and page S-3 of the prospectus supplement, as the Notes involve risks
not associated with conventional debt securities. All references to “Enhanced
Market Participation Notes” in the product supplement shall refer to these
Return Enhanced Notes. We urge you to consult your investment, legal,
tax, accounting and other advisers before you invest in the Notes. As
used herein, references to the “Issuer”, “HSBC”, “we”, “us” and “our” are to
HSBC USA Inc.
HSBC has
filed a registration statement (including a prospectus, a prospectus supplement
and a product supplement) with the U.S. Securities and Exchange Commission
(“SEC”) for the offering to which this pricing supplement
relates. Before you invest, you should read the prospectus,
prospectus supplement and product supplement in that registration statement and
other documents HSBC has filed with the SEC for more complete information about
HSBC 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 or any dealer participating in this offering will arrange to send you the
prospectus, prospectus supplement and product supplement if you request them by
calling toll-free 1-866-811-8049.
You may
also obtain:
Supplemental Information Relating to the
Terms of the Notes
Notwithstanding
anything contained in the accompanying prospectus supplement to the contrary,
the Notes will be issued under the senior indenture dated March 31, 2009,
between HSBC USA Inc., as Issuer, and Wells Fargo Bank, National Association, as
trustee. Such indenture has substantially the same terms as the
indenture described in the accompanying prospectus supplement. HSBC
Bank USA, N.A. will act as paying agent with respect to the Notes pursuant to a
Paying Agent and Securities Registrar Agreement dated June 1, 2009, between HSBC
USA Inc. and HSBC Bank USA, N.A.
Selected Purchase
Considerations
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·
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APPRECIATION POTENTIAL —
The Notes provide the opportunity to enhance returns by multiplying any
positive Basket Return by the Upside Participation Rate of 300%, subject
to the Maximum Cap of 31.20%. Accordingly, the Payment at Maturity will
not exceed $1,312.00 for every $1,000 Principal Amount of Notes. Because
the Notes are our senior unsecured debt obligations, the payment of any
amount at maturity is subject to our ability to pay our obligations as
they become due. YOU MAY LOSE UP TO 100.00% OF YOUR INITIAL
INVESTMENT.
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·
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FULL PARTICIPATION IN THE
DECLINE OF THE REFERENCE ASSET — Payment at
Maturity of the Principal Amount of the Notes is fully exposed to a
decline in the Basket Ending Level, as compared to the Basket Starting
Level. If the level of the Basket declines, you will lose 1.00%
of the Principal Amount for every 1.00% that the Basket Return is less
than zero. If
the Basket Return is -100.00%, you will lose your entire
investment.
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TAX TREATMENT — There is
no direct legal authority as to the proper tax treatment of the Notes, and
therefore significant aspects of the tax treatment of the Notes are
uncertain as to both the timing and character of any inclusion in income
in respect of the Notes. Under one approach, the Notes should
be treated as pre-paid forward or other executory contracts with respect
to the Basket. We intend to treat the Notes consistent with
this approach. Pursuant to the terms of the Notes, you agree to
treat the Notes under this approach for all U.S. federal income tax
purposes. Notwithstanding any disclosure in the accompanying
product supplement to the contrary, our special U.S. tax counsel in this
transaction is Sidley Austin LLP. Subject
to the limitations described therein, and based on certain factual
representations received from us, in the opinion of our special U.S. tax
counsel, Sidley Austin LLP, it is
reasonable to treat the Notes as pre-paid forward or other executory
contracts with respect to the Basket. Pursuant to this
approach, we do not intend to report any income or gain with respect to
the Notes prior to their maturity or an earlier sale or exchange and we
intend 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 Note for more than one year at such time for U.S. federal income tax
purposes.
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We
will not attempt to ascertain whether any Reference Asset Issuer would be
treated as a United States real property holding corporation, as defined
for U.S. federal income tax purposes. If one or more Reference
Asset Issuers were so treated, certain adverse U.S. federal income tax
consequences might apply. You should refer to information filed with the
SEC by the Reference Asset Issuers and consult your tax advisor regarding
the possible consequences to you, if any, in the event that one or more
Reference Asset Issuers is or becomes a United States real property
holding corporation.
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For
a discussion of certain of the U.S. federal income tax consequences of
your investment in a Note, please see the discussion under “Certain U.S.
Federal Income Tax Considerations” in the accompanying product
supplement.
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·
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DIVERSIFICATION AMONG THE
BASKET COMPONENTS — The return on the Notes is linked to an equally
weighted basket consisting of the respective common stocks of the
Reference Asset Issuers. For additional information about each Basket
Component see the information set forth under “Description of the
Reference Asset” herein.
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Selected Risk
Considerations
An
investment in the Notes involves significant risks. Investing in the Notes is
not equivalent to investing directly in the Reference Asset or any Basket
Component. These risks are explained in more detail in the “Risk
Factors” sections of the accompanying product and prospectus
supplement.
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·
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SUITABILITY OF NOTES FOR
INVESTMENT — A person should reach a decision to invest in the
Notes after carefully considering, with his or her advisors, the
suitability of the Notes in light of his or her investment objectives and
the information set out in this pricing supplement. Neither
HSBC nor any dealer participating in the offering makes any recommendation
as to the suitability of the Notes for
investment.
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YOUR INVESTMENT IN THE NOTES
MAY RESULT IN A LOSS — The Notes do not guarantee any return of
principal. The return on the Notes at maturity is linked to the
performance of the Reference Asset and will depend on whether, and the
extent to which, the Basket Return is positive or negative. If the Basket
Ending Level has declined, as compared to the Basket Starting Level, you
will not receive the full amount of your initial investment at maturity.
YOU MAY LOSE UP TO
100.00% OF YOUR INVESTMENT.
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THE NOTES ARE SUBJECT TO THE
CREDIT RISK OF HSBC USA INC. — The Notes are senior unsecured debt
obligations of the Issuer, HSBC, and are not, either directly or
indirectly, an obligation of any third party. Any payment to be made on
the Notes 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 Notes and, in the event HSBC were
to default on its obligations, you may not receive the amount owed to you
under the terms of the Notes.
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RISKS ASSOCIATED WITH AN
INVESTMENT LINKED TO COMPANIES IN THE ENERGY INDUSTRY — The
Reference Asset Issuers develop and produce crude oil and natural gas and
provide drilling and other energy resources production and distribution
related services. Stock prices for these types of companies are
affected by supply and demand both for their specific product or service
and for energy products and services in general. The price of
oil and gas, exploration and production spending, government regulation,
world events and economic conditions will likewise affect the performance
of these companies. The stock prices of oil service companies
could be subject to wide fluctuations in response to a variety of factors,
including the ability of the Organization of the Petroleum Exporting
Countries (“OPEC”) to set and maintain production levels and pricing, the
level of production in non-OPEC countries, the demand for oil and gas,
which is negatively impacted by economic downturns, the policies of
various governments regarding exploration and development of oil and gas
reserves, advances in exploration and development technology and the
political environment of oil-producing
regions. Correspondingly, securities of companies in the energy
field are subject to swift price and supply fluctuations caused by events
relating to international politics, energy conservation, the success of
exploration projects, and tax and other governmental regulatory
policies. Weak demand for the companies’ products or services
or for energy products and services in general, as well as negative
developments in these other areas, would adversely impact the Reference
Asset Issuers’ performance, and therefore the Basket and your return on
the Notes.
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CONCENTRATION
OF INVESTMENT IN A PARTICULAR INDUSTRY — The equity securities issued by
the Reference Asset Issuers are in the following
industries: oil and natural gas and its transmission, exploration and
production. Consequently, the value of the
Notes may be subject to greater volatility and be more adversely affected
by a single economic, environmental, political or regulatory occurrence
affecting such industries than an investment linked to a more broadly
diversified group of issuers. Stock prices for these types of
companies are affected by supply and demand both for their specific
product or service and for energy products and services in
general.
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CHANGES IN THE VALUES OF THE
BASKET COMPONENTS MAY OFFSET EACH OTHER — Movements in the prices
of the Basket Components may not correlate with each other. At a time when
the price of one of the Basket Components increases, the price of the
other Basket Components may not increase as much or may even decline.
Therefore, in calculating the Basket Return, increases in the price of one
or more of the Basket Components may be moderated, or more than offset, by
lesser increases or declines in the price of the other Basket
Components.
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CERTAIN BUILT-IN COSTS ARE
LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES PRIOR TO MATURITY
— While the Payment at Maturity described in this pricing supplement is
based on the full Principal Amount of your Notes, the original issue price
of the Notes includes the placement agent’s commission and the estimated
cost of hedging our obligations under the Notes through one or more of our
affiliates. As a result, the price, if any, at which HSBC Securities (USA)
Inc. will be willing to purchase Notes from you in secondary market
transactions, if at all, will likely be lower than the original issue
price, and any sale of Notes by you prior to the Maturity Date could
result in a substantial loss to you. The Notes are not designed to be
short-term trading instruments. Accordingly, you should be able and
willing to hold your Notes to
maturity.
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NO INTEREST OR DIVIDEND
PAYMENTS OR VOTING RIGHTS — As a holder of the Notes, you will not
receive interest payments, and you will not have voting rights or rights
to receive cash dividends or other distributions or other rights that
holders of the Basket Components would
have.
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THE NOTES LACK LIQUIDITY
— The Notes will not be listed on any securities exchange. HSBC Securities
(USA) Inc. may offer to purchase the Notes in the secondary market but is
not required to do so and may cease making such offers at any time.
Because other dealers are not likely to make a secondary market for the
Notes, the price at which you may be able to trade your Notes is likely to
depend on the price, if any, at which HSBC Securities (USA) Inc. is
willing to buy the Notes. Even if there is a secondary market, it may not
provide enough liquidity to allow you to trade or sell the Notes
easily.
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POTENTIAL CONFLICTS — We
and our affiliates play a variety of roles in connection with the issuance
of the Notes, including acting as calculation agent and hedging our
obligations under the Notes. In performing these duties, the economic
interests of the calculation agent and other affiliates of ours are
potentially adverse to your interests as an investor in the Notes. We will
not have any obligation to consider your interests as a holder of
the
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Notes
in taking any corporate action that might affect the level of the
Reference Asset and the value of the Notes.
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IN SOME CIRCUMSTANCES, THE
PAYMENT YOU RECEIVE ON THE NOTES MAY BE PARTIALLY BASED ON THE COMMON
STOCK OF A COMPANY OTHER THAN THE EIGHT BASKET COMPONENTS INITIALLY IN THE
BASKET — Following certain corporate events relating to the
respective Reference Asset Issuer where such issuer is not the surviving
entity, the amount of cash you receive at maturity may be based on the
common stock of a successor to the respective Reference Asset Issuer or
any cash or any other assets distributed to holders of such Basket
Component in such corporate event. The occurrence of these corporate
events and the consequent adjustments may materially and adversely affect
the value of the Notes. For more information, see “Merger Event and Tender
Offer” beginning on page PS-14
below.
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THE NOTES ARE NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OF THE UNITED STATES OR ANY OTHER
JURISDICTION AND INVOLVE INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED DUE TO THE CREDIT RISK OF HSBC — The
Notes 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 Notes is subject to the
credit risk of HSBC, and in the event that HSBC is unable to pay its
obligations as they become due, you may not receive the full Payment at
Maturity of the Notes.
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·
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THERE IS LIMITED ANTI-DILUTION
PROTECTION — The calculation
agent will adjust the Final Price of a Basket Component, which will affect
the Basket Return and, consequently, the Payment at Maturity, for certain
events affecting the shares of such Basket Component, such as stock splits
and corporate actions. The calculation agent is not required to make an
adjustment for every corporate action which affects the shares of the
Basket Components. If an event occurs that does not require the
calculation agent to adjust the prices of the shares of the Basket
Components, the market price of the Notes may be materially and adversely
affected. See “Adjustments” below for additional
information.
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·
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MANY ECONOMIC AND MARKET
FACTORS WILL IMPACT THE VALUE OF THE NOTES — In addition to the
level of the Reference Asset on any day, the value of the Notes will be
affected by a number of economic and market factors that may either offset
or magnify each other, including:
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·
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the
expected volatility of the Basket
Components;
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·
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the
time to maturity of the Notes;
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·
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the
dividend rate on the Basket
Components;
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·
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interest
and yield rates in the market
generally;
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·
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a
variety of economic, financial, political, regulatory or judicial events;
and
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·
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our
creditworthiness, including actual or anticipated downgrades in our credit
ratings.
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What
Is the Total Return on the Notes at Maturity Assuming a Range of Performances
for the Reference Asset?
The
following table illustrates the hypothetical total return at maturity on the
Notes. The “total return” as used in this pricing supplement is the number,
expressed as a percentage, that results from comparing the Payment at Maturity
per $1,000 Principal Amount of Notes to $1,000. The hypothetical total returns
set forth below reflect the Basket Starting Level of 100.00, the Upside
Participation Rate of 300% and the Maximum Cap of 31.20%. The hypothetical total
returns set forth below are for illustrative purposes only and may not be the
actual total returns applicable to a purchaser of the Notes. The numbers
appearing in the following table and examples have been rounded for ease of
analysis.
Hypothetical
Basket Ending Level
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Hypothetical
Basket Return
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Hypothetical
Total Return
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180.00
|
80.00%
|
31.20%
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165.00
|
65.00%
|
31.20%
|
150.00
|
50.00%
|
31.20%
|
140.00
|
40.00%
|
31.20%
|
130.00
|
30.00%
|
31.20%
|
120.00
|
20.00%
|
31.20%
|
115.00
|
15.00%
|
31.20%
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110.40
|
10.40%
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31.20%
|
110.00
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10.00%
|
30.00%
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105.00
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5.00%
|
15.00%
|
102.50
|
2.50%
|
7.50%
|
100.50
|
0.50%
|
1.50%
|
100.00
|
0.00%
|
0.00%
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95.00
|
-5.00%
|
-5.00%
|
90.00
|
-10.00%
|
-10.00%
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85.00
|
-15.00%
|
-15.00%
|
80.00
|
-20.00%
|
-20.00%
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70.00
|
-30.00%
|
-30.00%
|
60.00
|
-40.00%
|
-40.00%
|
50.00
|
-50.00%
|
-50.00%
|
40.00
|
-60.00%
|
-60.00%
|
30.00
|
-70.00%
|
-70.00%
|
20.00
|
-80.00%
|
-80.00%
|
10.00
|
-90.00%
|
-90.00%
|
0.00
|
-100.00%
|
-100.00%
|
Hypothetical Examples of Amounts Payable
at Maturity
The
following examples illustrate how the total returns set forth in the table above
are calculated.
Example 1: The level of the Reference
Asset increases from the Basket Starting Level of 100.00 to a Basket Ending
Level of 110.00. Because the Basket Ending Level of 110.00 is greater
than the Basket Starting Level of 100.00 and the Basket Return of 10.00%
multiplied by the Upside Participation Rate of 300.00% does not exceed the
Maximum Cap of 31.20%, the investor receives a Payment at Maturity of
$1,300.00 per $1,000 Principal Amount of Notes, calculated as
follows:
$1,000 +
[$1,000 × (10.00% × 300.00%)] = $1,300.00
Example 2: The level of the Reference
Asset increases from the Basket Starting Level of 100.00 to a final level of
115.00. Because the Basket Ending Level of 115.00 is greater than the
Basket Starting Level of 100.00 and the Basket Return of 15.00% multiplied by
the Upside Participation Rate of 300.00% exceeds the Maximum Cap of 31.20%, the
investor receives a Payment at Maturity of $1,312.00 per $1,000 Principal Amount
of Notes, the maximum payment per Note, calculated as follows:
$1,000 +
($1,000 ×
31.20%) = $1,312.00
Example 3: The level of the Reference
Asset decreases from the Basket Starting Level of 100.00 to a Basket Ending
Level of 70.00. Because the Basket Return is -30.00% and the Basket
Ending Level of 70.00 is less than the Basket Starting Level of 100.00, the
investor receives a Payment at Maturity of $700.00 per $1,000 Principal Amount
of Notes, calculated as follows:
$1,000 +
($1,000 ×
- -30.00%) = $700.00
Description of the Reference
Asset
This
pricing supplement is not an offer to sell and it is not an offer to buy
interests in any Basket Component. All disclosure contained in this
pricing supplement regarding the Reference Asset, including the performance and
description of the Basket Components, where applicable, are derived from
publicly available information. Neither HSBC nor any of its affiliates assumes
any responsibilities for the adequacy or accuracy of information about any
Basket Component contained in this pricing supplement. You should
make your own investigation into each Basket Component.
We urge
you to read the section “Sponsors or Issuers and Reference Asset” on
page S-37 in the accompanying prospectus supplement.
REFERENCE
ASSET ISSUER AND REFERENCE ASSET INFORMATION
The Notes
have not been passed on by the Reference Asset Issuers as to their legality or
suitability. The Notes are not issued by and are not financial or legal
obligations of the Reference Asset Issuers. The Reference Asset Issuers make no
warranties and bear no liabilities with respect to the Notes. This pricing
supplement relates only to the Notes offered and does not relate to any security
of an underlying issuer.
All
information on the Basket Components and the Reference Asset Issuers is derived
from publicly available information. Companies with securities registered under
the Securities Exchange Act of 1934 (the ”Exchange Act”) are required to file
periodically certain financial and other information specified by the SEC.
Information provided to or filed with the SEC electronically can be accessed
through a website maintained by the SEC. The address of the SEC’s website is
http://www.sec.gov. Information provided to or filed with the SEC pursuant to
the Exchange Act by a company issuing a Basket Component can be located by
reference to the SEC file number specified in the description of the Basket
Components below. In addition, information filed with the SEC can be
inspected and copied at the Public Reference Section of the SEC, 100F Street,
N.E., Room 1580, Washington, D.C. 20549. Copies of this material can
also be obtained from the Public Reference Section, at prescribed
rates. We do not make any representation or warranty as to the
accuracy or completeness of any materials referred to above, including any
filings made by a Reference Asset Issuer with the SEC. In connection with any
issuance of Notes under the applicable pricing supplement, neither we nor the
agent has participated in the preparation of the above-described documents or
made any due diligence inquiry with respect to the sponsors or issuers of the
respective Basket Components. Neither we nor any affiliate makes any
representation that such publicly available documents or any other publicly
available information regarding the sponsor or issuer of the Basket Components
is accurate or complete. Furthermore, we cannot give any assurance that all
events occurring prior to the date hereof (including events that would affect
the accuracy or completeness of the publicly available documents described
herein) that would affect the trading level or price of a Basket Component (and
therefore the price of such Basket Component at the time we price the Notes)
have been publicly disclosed. Subsequent disclosure of any such events or the
disclosure of or failure to disclose material future events concerning the
sponsor or issuer of the respective Basket Components could affect the value
received at maturity with respect to the Notes and therefore the price of the
Notes.
CHESAPEAKE
ENERGY CORPORATION (CHK)
Description
of Chesapeake Energy Corporation
Chesapeake
Energy Corporation has stated in its filings with the SEC that it owns interests
in producing natural gas and oil wells.
Historical
Performance of Chesapeake Energy Corporation
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$23.64
|
$15.06
|
$21.94
|
June
30, 2005
|
$23.98
|
$17.85
|
$22.80
|
September
30, 2005
|
$38.98
|
$22.90
|
$38.25
|
December
30, 2005
|
$40.01
|
$26.62
|
$31.73
|
March
31, 2006
|
$35.57
|
$27.80
|
$31.41
|
June
30, 2006
|
$33.75
|
$26.81
|
$30.25
|
September
29, 2006
|
$33.76
|
$28.07
|
$28.98
|
December
29, 2006
|
$34.27
|
$27.92
|
$29.05
|
March
30, 2007
|
$31.83
|
$27.27
|
$30.88
|
June
29, 2007
|
$37.75
|
$30.88
|
$34.60
|
September
28, 2007
|
$37.15
|
$31.38
|
$35.26
|
December
31, 2007
|
$41.19
|
$35.25
|
$39.20
|
March
31, 2008
|
$49.83
|
$34.44
|
$46.15
|
June
30, 2008
|
$68.10
|
$45.26
|
$65.96
|
September
30, 2008
|
$73.89
|
$31.19
|
$35.86
|
December
31, 2008
|
$35.43
|
$9.84
|
$16.17
|
March
31, 2009
|
$20.13
|
$13.28
|
$17.06
|
June
30, 2009
|
$24.66
|
$16.45
|
$19.83
|
September
30, 2009
|
$29.49
|
$16.92
|
$28.40
|
December
31, 2009
|
$30.00
|
$22.07
|
$25.88
|
March
12, 2010*
|
$29.20
|
$23.56
|
$25.64
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Chesapeake Energy Corporation’s common
stock from January 3, 2005 through March 12, 2010, based on information from
Bloomberg Professional® service.
The market price of the Basket Component on March 12, 2010 was $25.64. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
EL
PASO CORPORATION (EP)
Description
of El Paso Corporation
El Paso
Corporation has stated in its filings with the SEC that it is an energy company
that primarily operates in the natural gas transmission and exploration and
production sectors of the energy industry.
Historical
Performance of El Paso Corporation
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$13.10
|
$10.02
|
$10.58
|
June
30, 2005
|
$11.87
|
$9.37
|
$11.52
|
September
30, 2005
|
$14.16
|
$11.13
|
$13.90
|
December
30, 2005
|
$14.07
|
$10.78
|
$12.16
|
March
31, 2006
|
$13.95
|
$11.80
|
$12.05
|
June
30, 2006
|
$15.99
|
$11.85
|
$15.00
|
September
29, 2006
|
$16.38
|
$12.82
|
$13.64
|
December
29, 2006
|
$15.84
|
$12.92
|
$15.28
|
March
30, 2007
|
$15.66
|
$13.72
|
$14.47
|
June
29, 2007
|
$17.43
|
$14.41
|
$17.23
|
September
28, 2007
|
$18.56
|
$15.00
|
$16.97
|
December
31, 2007
|
$18.33
|
$15.29
|
$17.24
|
March
31, 2008
|
$18.27
|
$14.83
|
$16.64
|
June
30, 2008
|
$21.95
|
$16.57
|
$21.74
|
September
30, 2008
|
$22.47
|
$11.25
|
$12.76
|
December
31, 2008
|
$12.53
|
$5.32
|
$7.83
|
March
31, 2009
|
$9.51
|
$5.22
|
$6.25
|
June
30, 2009
|
$10.91
|
$6.11
|
$9.23
|
September
30, 2009
|
$10.84
|
$8.00
|
$10.32
|
December
31, 2009
|
$11.37
|
$8.94
|
$9.83
|
March
12, 2010*
|
$11.59
|
$9.56
|
$11.43
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of El Paso Corporation’s common stock from
January 3, 2005 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $11.43. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
SOUTHWESTERN
ENERGY COMPANY (SWN)
Description
of Southwestern Energy Company
Southwestern
Energy Company has stated in its filings with the SEC that it is an independent
energy company engaged in natural gas and crude oil exploration, development and
production. It also has natural gas gathering and marketing
businesses.
Historical
Performance of Southwestern Energy Company
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$7.89
|
$5.55
|
$7.10
|
June
30, 2005
|
$11.93
|
$6.72
|
$11.75
|
September
30, 2005
|
$18.72
|
$12.00
|
$18.35
|
December
30, 2005
|
$20.89
|
$15.60
|
$17.97
|
March
31, 2006
|
$22.13
|
$14.47
|
$16.10
|
June
30, 2006
|
$20.59
|
$11.85
|
$15.58
|
September
29, 2006
|
$19.18
|
$13.88
|
$14.94
|
December
29, 2006
|
$21.48
|
$13.62
|
$17.53
|
March
30, 2007
|
$20.82
|
$15.79
|
$20.49
|
June
29, 2007
|
$25.26
|
$20.38
|
$22.25
|
September
28, 2007
|
$23.23
|
$17.84
|
$20.93
|
December
31, 2007
|
$28.50
|
$20.85
|
$27.86
|
March
31, 2008
|
$35.39
|
$23.77
|
$33.69
|
June
30, 2008
|
$49.45
|
$32.96
|
$47.61
|
September
30, 2008
|
$52.46
|
$27.04
|
$30.54
|
December
31, 2008
|
$39.08
|
$19.05
|
$28.97
|
March
31, 2009
|
$35.48
|
$25.33
|
$29.69
|
June
30, 2009
|
$46.47
|
$28.90
|
$38.85
|
September
30, 2009
|
$45.80
|
$34.26
|
$42.68
|
December
31, 2009
|
$51.33
|
$39.77
|
$48.20
|
March
12, 2010*
|
$52.82
|
$40.51
|
$44.36
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Southwestern Energy Company’s common stock
from January 3, 2005 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $44.36. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
PETROHAWK
ENERGY CORPORATION (HK)
Description
of Petrohawk Energy Corporation
Petrohawk
Energy Corporation has stated in its filings with the SEC that it is an
independent oil and natural gas company engaged in the exploration, development
and production of predominately natural gas properties located onshore in the
United States.
Historical
Performance of Petrohawk Energy Corporation
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$10.91
|
$7.57
|
$10.44
|
June
30, 2005
|
$11.90
|
$7.57
|
$10.83
|
September
30, 2005
|
$14.90
|
$10.47
|
$14.39
|
December
30, 2005
|
$15.16
|
$11.05
|
$13.21
|
March
31, 2006
|
$16.25
|
$11.75
|
$13.69
|
June
30, 2006
|
$14.64
|
$10.01
|
$12.53
|
September
29, 2006
|
$12.97
|
$9.76
|
$10.38
|
December
29, 2006
|
$13.08
|
$9.90
|
$11.51
|
March
30, 2007
|
$13.46
|
$11.95
|
$13.17
|
June
29, 2007
|
$17.23
|
$12.87
|
$15.86
|
September
28, 2007
|
$17.07
|
$13.65
|
$16.42
|
December
31, 2007
|
$19.11
|
$15.55
|
$17.31
|
March
31, 2008
|
$20.47
|
$14.33
|
$20.17
|
June
30, 2008
|
$48.50
|
$19.55
|
$46.31
|
September
30, 2008
|
$53.41
|
$17.55
|
$21.63
|
December
31, 2008
|
$21.66
|
$8.50
|
$15.63
|
March
31, 2009
|
$22.87
|
$14.89
|
$19.23
|
June
30, 2009
|
$26.90
|
$18.50
|
$22.30
|
September
30, 2009
|
$25.81
|
$18.01
|
$24.21
|
December
31, 2009
|
$28.46
|
$20.45
|
$23.99
|
March
12, 2010*
|
$27.36
|
$20.46
|
$22.19
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Petrohawk Energy Corporation’s common stock
from January 3, 2005 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $22.19. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
PIONEER
NATURAL RESOURCES COMPANY (PXD)
Description
of Pioneer Natural Resources Company
Pioneer
Natural Resources Company has stated in its filings with the SEC that it is an
independent oil and gas exploration and production company with current
operations in the United States, South Africa and Tunisia. It is a
holding company whose assets consist of direct and indirect ownership interests
in, and whose business is conducted substantially through, its
subsidiaries.
Historical
Performance of Pioneer Natural Resources Company
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$44.82
|
$32.91
|
$42.72
|
June
30, 2005
|
$45.22
|
$36.67
|
$42.08
|
September
30, 2005
|
$56.35
|
$39.66
|
$54.92
|
December
30, 2005
|
$55.98
|
$45.39
|
$51.27
|
March
31, 2006
|
$54.46
|
$38.02
|
$44.25
|
June
30, 2006
|
$46.75
|
$36.44
|
$46.41
|
September
29, 2006
|
$46.70
|
$37.07
|
$39.12
|
December
29, 2006
|
$44.46
|
$36.48
|
$39.69
|
March
30, 2007
|
$43.62
|
$37.18
|
$43.11
|
June
29, 2007
|
$54.17
|
$42.60
|
$48.71
|
September
28, 2007
|
$49.78
|
$39.43
|
$44.98
|
December
31, 2007
|
$54.87
|
$42.92
|
$48.84
|
March
31, 2008
|
$50.00
|
$36.43
|
$49.12
|
June
30, 2008
|
$81.26
|
$48.50
|
$78.28
|
September
30, 2008
|
$82.21
|
$46.25
|
$52.28
|
December
31, 2008
|
$52.26
|
$14.03
|
$16.18
|
March
31, 2009
|
$20.44
|
$11.89
|
$16.47
|
June
30, 2009
|
$30.56
|
$15.67
|
$25.50
|
September
30, 2009
|
$36.74
|
$21.78
|
$36.29
|
December
31, 2009
|
$49.98
|
$33.50
|
$48.17
|
March
12, 2010*
|
$54.03
|
$41.88
|
$52.78
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Pioneer Natural Resources Company’s common
stock from January 3, 2005 through March 12, 2010, based on information from
Bloomberg Professional® service.
The market price of the Basket Component on March 12, 2010 was $52.78. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
RANGE
RESOURCES CORPORATION (RRC)
Description
of Range Resources Corporation
Range
Resources Corporation has stated in its filings with the SEC that it is an
independent natural gas company engaged in the exploration, development and
acquisition of primarily natural gas properties, mostly in the Southwestern and
Appalachian regions of the United States.
Historical
Performance of Range Resources Corporation
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from January 3,
2005 through March 12, 2010. We obtained the data in this table from Bloomberg
Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2005
|
$17.59
|
$12.36
|
$15.57
|
June
30, 2005
|
$18.61
|
$13.51
|
$17.93
|
September
30, 2005
|
$26.33
|
$18.01
|
$25.74
|
December
30, 2005
|
$28.37
|
$20.71
|
$26.34
|
March
31, 2006
|
$30.40
|
$22.52
|
$27.31
|
June
30, 2006
|
$30.29
|
$21.74
|
$27.19
|
September
29, 2006
|
$30.37
|
$23.39
|
$25.24
|
December
29, 2006
|
$31.77
|
$22.80
|
$27.46
|
March
30, 2007
|
$33.80
|
$25.33
|
$33.40
|
June
29, 2007
|
$41.58
|
$33.40
|
$37.41
|
September
28, 2007
|
$41.84
|
$33.28
|
$40.66
|
December
31, 2007
|
$51.88
|
$37.18
|
$51.36
|
March
31, 2008
|
$65.53
|
$43.02
|
$63.45
|
June
30, 2008
|
$76.77
|
$61.20
|
$65.54
|
September
30, 2008
|
$72.98
|
$37.37
|
$42.87
|
December
31, 2008
|
$44.15
|
$23.79
|
$34.39
|
March
31, 2009
|
$45.86
|
$30.90
|
$41.16
|
June
30, 2009
|
$48.78
|
$38.76
|
$41.41
|
September
30, 2009
|
$52.86
|
$35.48
|
$49.36
|
December
31, 2009
|
$60.13
|
$41.99
|
$49.85
|
March
12, 2010*
|
$54.48
|
$45.00
|
$51.33
|
* As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Range Resources Corporation’s common stock
from January 3, 2005 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $51.33. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
SANDRIDGE
ENERGY, INC. (SD)
Description
of SandRidge Energy, Inc.
SandRidge
Energy, Inc. has stated in its filings with the SEC that it is an independent
natural gas and oil company concentrating on exploration, development and
production activities related to the exploitation of its holdings in West
Texas. It owns related gas gathering and treating facilities, a gas
marketing business and an oil field services business, including its wholly
owned drilling rig business.
Historical
Performance of SandRidge Energy, Inc.
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from November
6, 2007 (the date of SandRidge
Energy Inc.’s initial public offering) through March 12, 2010. We
obtained the data in this table from Bloomberg Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
December
31, 2007*
|
$36.09
|
$29.53
|
$35.86
|
March
31, 2008
|
$41.00
|
$28.55
|
$39.15
|
June
30, 2008
|
$68.88
|
$37.88
|
$64.58
|
September
30, 2008
|
$69.34
|
$17.46
|
$19.60
|
December
31, 2008
|
$19.23
|
$4.86
|
$6.15
|
March
31, 2009
|
$8.78
|
$4.49
|
$6.59
|
June
30, 2009
|
$11.83
|
$6.31
|
$8.52
|
September
30, 2009
|
$15.00
|
$7.44
|
$12.96
|
December
31, 2009
|
$14.07
|
$7.97
|
$9.43
|
March
12, 2010**
|
$11.08
|
$7.25
|
$8.22
|
*
Information for the fourth calendar quarter of 2007 includes data for the period
from November 6, 2007 through December 31, 2007. Accordingly, the “Quarterly
High,” “Quarterly Low” and “Quarterly Close” data indicated are for this
shortened period only and do not reflect complete data for the fourth calendar
quarter of 2007.
** As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of SandRidge Energy, Inc.’s common stock from
November 6, 2007 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $8.22. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
MARINER
ENERGY, INC. (ME)
Description
of Mariner Energy, Inc.
Mariner
Energy, Inc. has stated in its filings with the SEC that it is an independent
oil and gas exploration, development and production company.
Historical
Performance of Mariner Energy, Inc.
The
following table sets forth (to the extent available) the quarterly high and low
intraday prices, as well as end-of-quarter closing prices on the relevant
exchange, of the Basket Component for each quarter in the period from February
21, 2006 (the date of Mariner
Energy, Inc.’s initial public offering) through March 12, 2010. We
obtained the data in this table from Bloomberg Professional® service,
without independent verification by us. All historical prices are denominated in
US dollars and rounded to the nearest penny. Historical prices of the Basket
Component should not be taken as an indication of future performance of the
Basket Component.
QUARTER
ENDING
|
QUARTER
HIGH
|
QUARTER LOW
|
QUARTER
CLOSE
|
March
31, 2006*
|
$21.70
|
$18.05
|
$20.51
|
June
30, 2006
|
$20.65
|
$14.81
|
$18.37
|
September
29, 2006
|
$19.68
|
$15.95
|
$18.37
|
December
29, 2006
|
$21.35
|
$17.68
|
$19.60
|
March
30, 2007
|
$20.55
|
$16.88
|
$19.13
|
June
29, 2007
|
$25.86
|
$19.20
|
$24.25
|
September
28, 2007
|
$25.43
|
$17.82
|
$20.71
|
December
31, 2007
|
$25.00
|
$19.78
|
$22.88
|
March
31, 2008
|
$30.06
|
$22.86
|
$27.01
|
June
30, 2008
|
$37.38
|
$26.60
|
$36.97
|
September
30, 2008
|
$37.25
|
$19.20
|
$20.50
|
December
31, 2008
|
$20.43
|
$6.86
|
$10.20
|
March
31, 2009
|
$12.84
|
$6.46
|
$7.75
|
June
30, 2009
|
$15.74
|
$7.49
|
$11.75
|
September
30, 2009
|
$15.41
|
$9.65
|
$14.18
|
December
31, 2009
|
$16.66
|
$11.35
|
$11.61
|
March
12, 2010**
|
$16.27
|
$11.84
|
$15.75
|
*
Information for the first calendar quarter of 2006 includes data for the period
from February 21, 2006 through March 31, 2006. Accordingly, the “Quarterly
High,” “Quarterly Low” and “Quarterly Close” data indicated are for this
shortened period only and do not reflect complete data for the first calendar
quarter of 2006.
** As of
the date of this pricing supplement available information for the first calendar
quarter of 2010 includes data for the period from January 1, 2010 through March
12, 2010. Accordingly, the “Quarterly High,” “Quarterly Low” and “Quarterly
Close” data indicated are for this shortened period only and do not reflect
complete data for the first calendar quarter of 2010.
The graph
below illustrates the performance of Mariner Energy, Inc.’s common stock from
February 21, 2006 through March 12, 2010, based on information from Bloomberg
Professional® service.
The market price of the Basket Component on March 12, 2010 was $15.75. Past performance
of the Basket Component is not indicative of the future performance of the
Basket Component.
Market Disruption
Events
If the
Final Valuation Date is not a scheduled trading day for a Basket Component, then
the Final Valuation Date for such Basket Component will be the next day that is
a scheduled trading day for such Basket Component. If a market
disruption event (as defined below) exists for a Basket Component on the Final
Valuation Date, then the Final Valuation Date for such Basket Component will be
the next scheduled trading day on which a market disruption event does not exist
with respect to such Basket Component. If the market disruption event
continues for five consecutive scheduled trading days, then the fifth of such
consecutive scheduled trading days will nonetheless be the Final Valuation Date
for such Basket Component, and the calculation agent will determine, in its
discretion, the Final Price of such Basket Component on that date in good faith
and in its sole discretion using its estimate of the exchange traded price for
such Basket Component that would have prevailed but for that market disruption
event. For the avoidance of doubt, if no market disruption event exists with
respect to a Basket Component on the originally scheduled Final Valuation Date,
the determination of such Basket Component’s Final Price will be made on the
originally scheduled Final Valuation Date, irrespective of the existence of a
market disruption event with respect to one or more of the other Basket
Components. If the Final Valuation Date for any Basket Component is postponed,
then the Maturity Date will also be postponed until the third business day
following the latest postponed Final Valuation Date and no interest will be
payable in respect of such postponement.
“Market
disruption event” means for purposes hereof:
With
respect to a Basket Component and any date, the occurrence or existence of any
of the following conditions which the calculation agent determines is material:
(i) any suspension of or limitation imposed on trading by any relevant exchange
or related exchange or otherwise, and whether by reason of movements in price
exceeding limits permitted by that relevant exchange or related exchange or
otherwise, (a) relating to the Basket Component or (b) in any futures or options
contracts relating to the Basket Component; or (ii) any event (other than an
event described in (iii) below) that disrupts or impairs (as determined by the
calculation agent) the ability of market participants in general (a) to effect
transactions in, or obtain market values for, the Basket Component or (b) to
effect transactions in, or obtain market values for, any futures or options
contracts relating to the Basket Component; or (iii) the closure on any
scheduled trading day of any relevant exchange or related exchange prior to its
scheduled closing time unless that earlier closing time is announced by that
relevant exchange or related exchange at least one hour prior to the actual
closing time for the regular trading session on that relevant exchange or
related exchange on that scheduled trading day; or (iv) the relevant exchange or
any related exchange for the Basket Component fails to open for trading during
its regular trading session.
“Relevant
exchange” means with respect to a Basket Component, the primary exchange for
that Basket Component.
“Related
exchange” means with respect to a Basket Component, the exchanges or quotation
systems, if any, on which options or futures contracts on that relevant Basket
Component are traded or quoted, and as may be selected from time to time by the
calculation agent.
“Scheduled
closing time” means, with respect to any exchange and a scheduled trading day,
the scheduled weekday closing time of that exchange on that scheduled trading
day, without regard to after hours or any other trading outside of the regular
trading session hours.
“Scheduled
trading day” means with respect to a Basket Component, any day on which the
relevant exchange for that Basket Component and each related exchange for that
Basket Component are scheduled to be open for trading for that Basket
Component.
The
calculation agent will notify the noteholders of the existence of a market
disruption event on any day that, but for the occurrence or existence of a
market disruption event, would have been the Final Valuation Date.
Merger Event and Tender
Offer
A “merger
event” shall mean, in respect of a Basket Component, any (i) reclassification or
change of the shares of the Basket Component that results in a transfer of or an
irrevocable commitment to transfer all shares of the Basket Component
outstanding, (ii) consolidation, amalgamation or merger of the Reference Asset
Issuer with or into another entity (other than a consolidation, amalgamation or
merger of the Reference Asset Issuer with or into another entity and which does
not result in any such reclassification or change of all shares of the Basket
Component) or (iii) a takeover offer, tender offer, exchange offer,
solicitation, proposal or other event by any entity or person to purchase or
otherwise obtain 100% of the outstanding shares of the Basket Component that
results in a transfer of or an irrevocable commitment to transfer all shares of
the Basket Component (other than those shares of the Basket Component owned or
controlled by the offeror), or (iv) consolidation, amalgamation, merger or
binding share exchange of the Reference Asset Issuer or its subsidiaries with or
into another entity in which the Reference Asset Issuer is the continuing entity
and which does not result in a reclassification or change of the shares of the
Basket Component outstanding but results in the outstanding shares of the Basket
Component (other than shares of the Basket Component owned or controlled by that
other entity) immediately prior to that event collectively representing less
than 50% of the outstanding shares of the Basket Component immediately following
that event, in each case if the approval date (as defined below) is on or before
a Final Valuation Date.
A “tender
offer” shall mean, in respect of the voting shares of a Reference Asset Issuer,
any takeover offer, tender offer, exchange offer, solicitation, proposal or
other event by any entity or person that results in that entity or person
purchasing, or otherwise obtaining or having the right to obtain, by conversion
or other means, not less than 10% of the outstanding voting shares of the
Reference Asset Issuer as determined by the calculation agent, based upon the
making of filings with governmental or self-regulatory agencies or such other
information as the calculation agent deems relevant.
If a
merger event or a tender offer occurs in respect of a Basket Component that is
an American depositary share and the Basket Component is still publicly quoted,
traded or listed on the New York Stock Exchange or the NASDAQ National Market or
their successors in interest, then the calculation agent shall adjust such terms
and conditions of the Notes as the calculation agent determines appropriate to
account for that event.
If a
merger event or tender offer occurs in respect of a Basket Component and the
shares of the Basket Component are exchanged for new shares (with no other
distributions of property in respect of the shares of the Basket Component), and
those new shares are publicly quoted, traded or listed on the New York Stock
Exchange, the NASDAQ National Market or their successors in interest, then the
Basket Component shall be adjusted to comprise the number of new shares to which
a holder of one share of the Basket Component immediately prior to the
occurrence of the merger event or tender offer, as the case may be, would be
entitled upon consummation of the merger event or tender offer. The calculation
agent shall also adjust such terms and conditions of the Notes as the
calculation agent determines appropriate to account for that event and such new
shares shall be deemed Basket Component.
If a
merger event or tender offer occurs and any distributions of property (other
than the publicly quoted new shares referred to above) are made on the shares of
the Basket Component, in whole or in part, then the calculation agent shall
accelerate the Maturity Date to the day which is five business days after the
approval date (as defined below). On the Maturity Date, we shall pay to each
holder of a Note the Payment at Maturity, provided that for purposes of that
calculation, the Official Closing Price of the Basket Component will be deemed
to be the value of all consideration received (or that would be received) in
respect of that event, and the Final Valuation Date will be deemed to be the
approval date and the relevant period with respect to any interest payment shall
be deemed to end on and include the approval date. In addition, the calculation
agent shall adjust the Payment at Maturity for the value of the imbedded options
that would preserve for a holder of Notes the economic equivalent of any
remaining payment obligations with respect to the Notes hereunder. The “approval
date” is the closing date of a merger event, or, in the case of a tender offer,
the date on which the person or entity making the tender offer acquires or
acquires the right to obtain the relevant percentage of the voting shares of the
Reference Asset Issuer, or if that date is not a scheduled trading day, the
immediately preceding scheduled trading day. In the case of an acceleration of
the maturity of the Notes, interest, if any, will be paid on the Notes through
and excluding the related date of accelerated payment.
Notwithstanding
these alternative arrangements, a merger event or tender offer may affect the
Basket Component in a manner that adversely affects the value of, and trading
in, the Notes. Similarly, an adjustment or acceleration resulting from a merger
event or a tender offer may adversely affect the value of, or the trading in,
the Notes.
Share Delisting, Nationalization,
Insolvency
A share
delisting shall be deemed to have occurred if at any time during the period from
and including the issue date to and including the Final Valuation Date the
shares of a Basket Component cease to be listed on the relevant exchange for
those shares for any reason and are not immediately re-listed on a successor
exchange which is the New York Stock Exchange, the NASDAQ National Market or a
successor in interest (a “successor exchange”). If the Basket Component is
immediately re-listed on a successor exchange, then the Basket Component shall
continue to be deemed to be the Basket Component.
A
nationalization shall be deemed to have occurred if, at any time during the
period from and including the issue date to and including the Final Valuation
Date, all or substantially all of the assets of a Reference Asset Issuer are
nationalized, expropriated, or are otherwise required to be transferred to any
governmental agency, authority or entity.
An
insolvency shall be deemed to have occurred if, at any time during the period
from and including the issue date to and including the Final Valuation Date, by
reason of voluntary or involuntary liquidation, bankruptcy or insolvency or any
analogous proceeding involving a Reference Asset Issuer (i) any shares of the
related Basket Component are required to be transferred to a trustee, liquidator
or other similar official or (ii) holders of any shares of the related Basket
Component become legally prohibited from transferring those shares.
If a
nationalization, insolvency or share delisting occurs, the calculation agent
shall accelerate the Maturity Date to the day which is five business days after
the announcement date (as defined below). On the accelerated Maturity Date, the
Issuer shall pay to each noteholder the Payment at Maturity and for the purposes
of that calculation, the Official Closing Price of the Basket Component will be
deemed to be the closing price on the scheduled trading day immediately prior to
the announcement date. In addition, the calculation agent shall adjust the
Payment at Maturity for the value of the imbedded options that would preserve
for a holder of Notes the economic equivalent of any remaining payment
obligations with respect to the Notes hereunder. The “announcement date” means
(i) in the case of a nationalization, the day of the first public announcement
by the relevant government authority that all or substantially all of the assets
of the Reference Asset Issuer are to be nationalized, expropriated or otherwise
transferred to any governmental agency, authority or entity, (ii) in the case of
a delisting event, the day of the first public announcement by the relevant
exchange that the shares of the Basket Component will cease to trade or be
publicly quoted on that exchange or the deposit agreement is terminated or (iii)
in the case of an insolvency, the day of the first public announcement of the
institution of a proceeding or presentation of a petition or passing of a
resolution (or other analogous procedure in any jurisdiction) that leads to an
insolvency with respect to the Reference Asset Issuer. In the case of an
acceleration of the maturity of the Notes interest, if any, will be paid on the
Notes through and excluding the related date of accelerated
payment.
Adjustments
Following
the declaration by a Reference Asset Issuer of the terms of any potential
adjustment event (as defined below), the calculation agent will determine
whether that potential adjustment event has a diluting or concentrative effect
on the theoretical value of the Basket Component and, if so, will make such
calculations and adjustments to the terms of the Note as may be necessary in
order to account for the economic effect of such event.
For
purposes hereof, “potential adjustment event” means the occurrence of any of the
following after the issue date of the Notes:
(i) a
subdivision, consolidation or reclassification of the shares of the Basket
Component (unless a merger event), or a free distribution or dividend of any
shares of the Basket Component to existing holders by way of bonus,
capitalization or similar issue;
(ii) a
distribution or dividend to existing holders of shares of the Basket Component
of (A) the Basket Component (B) other share capital or securities granting the
right to payment of dividends and/or the proceeds of liquidation of the
Reference Asset Issuer equally or proportionately with such payments to holders
of those shares or (C) other types of securities, rights or warrants or other
assets, in any case for payment (cash or other) at less than the prevailing
market price as determined by the calculation agent;
(iii) an
extraordinary dividend;
(iv) a
call by the relevant Reference Asset Issuer in respect of shares of the Basket
Component that are not fully paid;
(v) a
repurchase by the Reference Asset Issuer of shares of the Basket Component
whether out of profits or capital and whether the consideration for such
repurchase is cash, securities or otherwise; or
(vi)
any other similar event that may have a diluting or concentrative effect on the
theoretical value of the shares of the Basket Component.
Events of Default and
Acceleration
If the
Notes have become immediately due and payable following an event of default (as
defined in the accompanying prospectus) with respect to the Notes, the
calculation agent will determine the accelerated payment due and payable at
maturity in the same general manner as described in “Payment at Maturity” 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 Basket Ending Level, including the determinations of
each Basket Component’s Final Price. If a market disruption event
exists with respect to a Basket Component on that scheduled trading day, then
the accelerated Final Valuation Date for such Basket Component 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 then be the third business day following the postponed
accelerated Final Valuation Date. For the avoidance of doubt, if no
market disruption event exists with respect to a Basket Component on the
scheduled trading day preceding the date of acceleration, the determination of
such Basket Component’s Final Price will be made on such date, irrespective of
the existence of a market disruption event with respect to one or more of the
other Basket Components occurring on such date.
If the
Notes have become immediately due and payable following an event of default, you
will not be entitled to any additional payments with respect to the
Notes. For more information, see “Description of Debt Securities —
Events of Default” and “— Events of Default; Defaults” in the
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 Notes from HSBC for distribution to J.P.
Morgan Securities Inc. J.P. Morgan Securities Inc. will act as
placement agent for the Notes and will receive a fee that will not exceed $10
per $1,000 face amount of Notes.
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 Notes, but is under no obligation to do so and may discontinue any
market-making activities at any time without notice.
See
“Supplemental Plan of Distribution” on page S-52 in the prospectus
supplement.