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HSBC plans to price CDs with minimum return linked to three indexes
By Angela McDaniels
Tacoma, Wash., Aug. 2 - HSBC Bank USA, NA plans to price 0% certificates of deposit with minimum return due Aug. 30, 2017 linked to an index basket, according to a term sheet.
The equally weighted basket includes the Euro Stoxx 50 index, the Hang Seng index and the S&P 500 index.
The payout at maturity will be par plus the greater of the basket return and the minimum return, which is expected to be 1% to 4% and will be set at pricing.
When determining the basket return, the final level of each index will be the average of its closing levels on Feb. 25, May 25, Aug. 25 and Nov. 25 of each year.
The CDs will be putable on Aug. 31, 2011, Aug. 31, 2012, Aug. 30, 2013, Aug. 29, 2014, Aug. 31, 2015 and Aug. 31, 2016. Investors will receive the current market value minus an early redemption charge of 3.5% in year one, 2.5% in year two, 1.5% in year three and 0.5% in year four. There is no charge in year five or year six.
The CDs (Cusip: 40431GDB2) will price Aug. 24 and settle Aug. 30.
HSBC Securities (USA) Inc. is the agent.
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