HSBC 485 FTSE Income (6.24% p.a. Daily Range Accrual) Note
Factsheet - For Professional Intermediaries Only – 13th March 2013
Investment Summary / Key Facts
The HSBC485FTSE Income Note incorporates:
  • Apotentialincome of6.24% per annum.
  • Semi-annual income– maximum semi-annual coupon equal to 3.12%.
  • Income accrued on a daily basis; every day the FTSE closes above 4000 points and below 8000 points a fraction of the potential coupon is earnt.
  • Asoft protection level of 4,000 FTSE points(observed on the final day only).
  • Exposure to one of the safest banks as measured by bond spreads and credit ratings.
/ Type / Note
Issuer / HSBC Bank plc
Rating / Aa3 (Moody’s) / AA- (S&P)
Underlying Index / FTSE 100
Currency / GBP
Maturity / 6 years
Denomination / GBP 1
Return Paid as Income / Maximum 6.24% per annum
Income Accrual Range / 4,000 – 8,000 FTSE points
(observed daily)
Soft Protection Level / 4,000 FTSE points (maturity only)
Strike Date / 13-Mar-2013
Initial Index Level / TBD
Sedol / TBD
ISIN / TBD
Taxation / Income (under current rules)
Eligibility / Direct investments, ISAs, SIPP, SSAS, most Trusts
NON-Eligibility / Offshore Bond
Example Income and Payoff Scenarios
Scenario / Income paid over life / Original Capital / Explanation
The FTSE closeswithin the range 100% of the time (i.e. the FTSE closes between 4000 and 8000 points on every trading day). FTSE above 4,000 points at maturity. / 37.44% / 100.00% / The full 6.24% per annum(37.44% total) has been earnt.
100% of the original capital is returned as FTSE not below 4,000 points at maturity.
The FTSE closeswithin the rangeon every trading day for the first five years, but closesoutside the range for half of the final year.
FTSE above 4,000 points at maturity. / 34.32% / 100.00% / 34.32% is earnt and paid over the first 5 years.
Only half the final year coupon is paid – eg, 1.56% paid semi-annually in the final year.
100% of the original capital is returned as FTSE not below 4,000 points at maturity.
The FTSE has traded within the range for the first five years, but is outside the range for half of the final year.
At maturity the FTSE is below 4,000 points; it is at 55% of its Initial level. / 34.32% / 59.00% / 30.0% is earnt and paid over the first 5 years.
Only half the final year coupon is paid – eg, 1.56% paid semi-annually in the final year.
55% of the original capital is returnedas FTSE below 4,000 points at maturity and is at 55% of its Initial level at maturity.
Summary – How is the Income paid – illustrative example