HSBC to sell six-year annual income opportunity CDs linked to commodity titans

By Susanna Moon

Chicago, Dec. 31 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due Jan. 26, 2016 based on a basket of commodity stocks, according to a term sheet.

The underlying companies are Barrick Gold Corp., Archer-Daniels-Midland Co., Cameco Corp., El Paso Corp., Freeport-McMoRan Copper & Gold Inc., International Paper Co., Mosaic Co., Schlumberger Ltd., Transocean Ltd. and Weyerhaeuser Co.

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 11%, 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 Jan. 31, 2011, Jan. 31, 2012, Jan. 31, 2013, Jan. 31, 2014 and Jan. 30, 2015.

The CDs will price on Jan. 21 and settle on Jan. 26.

HSBC Securities (USA) Inc. is the agent.

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