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HSBC plans annual income opportunity CDs linked to global stock basket
By Angela McDaniels
Tacoma, Wash., July 30 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due Aug. 31, 2015 linked to a basket of stocks, according to a term sheet.
The basket includes AstraZeneca plc, Goldman Sachs Group, Inc., Infosys Technologies Ltd., Kraft Foods Inc., PetroChina Co. Ltd., Research In Motion Ltd., Sony Corp., Toyota Motor Corp., Vale SA and Vodafone Group plc.
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 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 Aug. 31, 2010, Aug. 31, 2011, Aug. 31, 2012, Aug. 30, 2013 and Aug. 29, 2014. The redemption amount will be the current market value of the CDs minus an early redemption fee 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 fee in year five or six.
The CDs will price Aug. 26 and settle Aug. 31.
HSBC Securities (USA) Inc. is the agent.
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