HSBC plans annual income opportunity CDs linked to Asian tigers

By Susanna Moon

Chicago, March 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due March 30, 2016 based on the performance of a basket of stocks, according to a term sheet.

The underlying companies are Baidu Inc., Icici Bank, Canon, LG Display Co. Ltd., China Unicom, Nippon Telegraph and Telephone, Chunghwa Telecom, SK Telecom Co., CNOOC Ltd. and Tata Motors Ltd.

Interest is payable annually and will equal the average of the returns on the basket stocks, with a floor of zero. Each stock's return will be capped at 8% to 12%, with the exact cap to be set at pricing, and will have a floor of negative 30%.

The CDs will be putable on April 29, 2011, April 30, 2012, April 30, 2013, April 30, 2014 and April 30, 2015. Investors will receive the current market value minus an early redemption charge.

The payout at maturity will be par.

The CDs will price on March 25 and settle on March 30.

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