HSBC to sell annual income market-linked CDs based on 20 stocks

By Susanna Moon

Chicago, Dec. 11 - HSBC Bank USA, NA plans to price annual income market-linked certificates of deposit due Dec. 29, 2015 linked to a basket of stocks, according to a term sheet.

The underlying companies are Carnival Corp., CSX Corp., Starbucks Corp., Fedex Corp., Archers Daniel Midland Co., Apple Inc., Coca-Cola Co., Intel Corp., Chesapeake Energy Corp., Alcoa Inc., Occidental Petroleum Corp., Freeport-McMoran Copper & Gold Inc., Goldman Sachs Group, Inc., AT&T Inc., US Bancorp, Verizon Communications Inc., Bristol Myers Squibb Co., Exelon Corp., Southern Co. and Wellpoint Inc.

Interest is payable annually and will equal the average of the returns on the basket stocks, with 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 price on Dec. 23 and settle on Dec. 29.

Morgan Stanley Smith Barney is the distributor.

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