HSBC plans annual income opportunity CDs tied to global stock basket

By Angela McDaniels

Tacoma, Wash., June 9 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due June 30, 2015 linked to a basket of stocks, according to a term sheet.

The basket includes the class B common stock of Berkshire Hathaway Inc. and the common stocks of Barrick Gold Corp., Baidu, Inc., BHP Billiton Ltd., China Mobile Ltd., Cisco Systems, Nokia Corp., Petroleo Brasileiro SA, Teva Pharmaceutical Industries Ltd. and Wal-Mart Stores, Inc.

Interest is payable in June of each year 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 11% to 15%, with the exact cap to be set at pricing.

The payout at maturity will be par.

The CDs will be putable on June 28, 2010, June 28, 2011, June 28, 2012 and June 27, 2014. The redemption amount will be the current market value of the CDs minus an early redemption fee of 3% in year one, 2% in year two and 1% in year three. There is no fee in year four or five.

The CDs will price June 25 and settle June 30.

HSBC Securities (USA) Inc. is the agent.

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