HSBC Bank plans to price barrier multi-coupon opportunity CDs linked to Russell 2000

By Angela McDaniels

Tacoma, Wash., Oct. 2 - HSBC Bank USA, NA plans to price 0% barrier multi-coupon opportunity certificates of deposit due Oct. 29, 2012 linked to the Russell 2000 index, according to a term sheet.

The CDs will pay a coupon in October of each year. If the index remained at or below the barrier level throughout the previous year, the coupon will be equal to the greater of the index return and zero. If the index was ever above the barrier, the coupon will be equal to the rebate return.

The barrier is 120% of the initial index level for the first year, 125% of the initial level for the second year and 135% of the initial level for the third year. The rebate return is expected to be 0.5% to 1% and will be set at pricing.

The payout at maturity will be par.

The CDs will be putable at the then-current market value on Oct. 29, 2010 and Oct. 31, 2011.

The CDs are expected to price Oct. 23 and settle Oct. 28.

HSBC Securities (USA) Inc. is the agent, and Advisors Asset Management, Inc. is the distributor.

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