HSBC plans annual income opportunity CDs linked to global stock basket

By Angela McDaniels

Tacoma, Wash., Sept. 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due Sept. 29, 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 10% to 14%, 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. Investors will receive the then-current market value of the CDs minus an early redemption charge of 3.5% in the first year, 2.5% in the second year, 1.5% in the third year and 0.5% in the fourth year. There is no charge in years five and six.

The CDs are expected to price Sept. 24 and settle Sept. 29.

HSBC Securities (USA) Inc. is the agent, and Advisors Asset Management, Inc. is the distributor.

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