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HSBC plans six-year Far East Opportunity CDs with 2.5% floor, no cap
By Toni Weeks
San Diego, July 6 - HSBC Bank USA, NA plans to price Far East Opportunity Certificates of Deposit due July 26, 2017 linked to a basket of four Asian indexes, according to a term sheet.
The equally weighted basket components are the Hang Seng index, the TWSE index, the MSCI Singapore Free index and the Kospi 200 index.
The payout at maturity will be par plus any gain in the basket, subject to a minimum return of 2.5%. The gain in the basket will be calculated using the average of the index returns measured on each quarterly observation date during the life of the notes.
Investors will receive a minimum of par if the basket falls.
The CDs are putable on July 31, 2012, July 31, 2013, July 31, 2014, July 31, 2015 and July 29, 2016. Investors will be subject to 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 early redemption charge for year five.
The CDs (Cusip: 40431GUM9) are expected to price July 20 and settle July 26.
HSBC Securities (USA) Inc. will be the agent.
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