HSBC to price contingent annual income CDs linked to stock basket

By Angela McDaniels

Tacoma, Wash., Aug. 26 - HSBC Bank USA, NA plans to price contingent annual income certificates of deposit due Sept. 30, 2015 linked to an equally weighted basket of 20 common stocks, according to a term sheet.

The basket includes Abbott Laboratories, Amazon.com, Inc., Amgen Inc., Apache Corp., AT&T Inc., Bank of America Corp., Burlington Northern Santa Fe Corp., CVS Caremark Corp., eBay Inc., Exelon Corp., FPL Group, Inc., General Electric Co., Intel Corp., Newmont Mining Corp., Nucor Corp., Philip Morris International Inc., Schlumberger Ltd., State Street Corp., Target Corp. and Verizon Communications Inc.

Interest will be payable in September of each year and will equal the sum of the stocks' weighted performances, subject to a floor of zero.

For each basket stock, its performance for each annual interest period will be equal to the fixed rate of 9% to 14% if its return is flat or positive, with the exact fixed rate to be set at pricing. If its return is negative, its performance will be equal to the return, subject to a floor of negative 30%.

The payout at maturity will be par.

The CDs are expected to price Sept. 23 and settle Sept. 30.

Morgan Stanley is the distributor.

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