HSBC plans five-year annual income opportunity CDs linked to U.S. Industry Titans stock basket

By Jennifer Chiou

New York, Feb. 1 - HSBC Bank USA, NA plans to price annual income opportunity series 6 certificates of deposit with an auto cap feature due Feb. 26, 2015 linked to a basket of common stocks, according to a term sheet.

The basket includes Amazon.com, Inc., Archer-Daniels-Midland Co., Bank of America Corp., Berkshire Hathaway Inc. (class B shares), Exelon Corp., First Solar, Inc., Gilead Sciences, Inc., Motorola, Inc. Newmont Mining Corp., Pfizer Inc., Verizon Communications Inc. and Waste Management, Inc.

Interest is payable annually and will equal the average of the returns on the basket stocks, subject to a floor of zero. If the valuation price of a stock is greater than the initial level, that stock's return will be the auto cap rate of 8% to 12%, with the exact cap to be set at pricing. Each individual's stock floor will be negative 30%.

The payout at maturity will be par.

The CDs will price on Feb. 23 and settle on Feb. 26.

HSBC Securities (USA) Inc. is the agent.

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