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HSBC plans to price annual income opportunity CDs linked to 10 stocks
By Angela McDaniels
Tacoma, Wash., Dec. 1 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due Dec. 31, 2015 linked to a basket of stocks, according to a term sheet.
The basket includes Biogen Idec Inc., eBay Inc., Hess Corp., Lowe's Cos., Inc., Nucor Corp., PepsiCo, Inc., U.S. Bancorp, Viacom Inc. (class B shares), Waste Management, Inc. and Yum! Brands, Inc.
Interest is payable annually and will equal the average of the returns on the basket stocks, subject to a floor of zero. Each stock's return will be capped at 8% to 12%, with the exact cap to be set at pricing, and will have a floor of negative 30%.
The payout at maturity will be par.
The CDs will be putable on Dec. 30, 2010, Dec. 30, 2011, Dec. 31, 2012, Dec. 30, 2013 and Dec. 30, 2014. The redemption amount will be the then-current market value of the CDs 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 years five or six.
The CDs will price Dec. 28 and settle Dec. 31.
HSBC Securities (USA) Inc. is the agent. Advisors Asset Management, Inc. is the distributor.
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