HSBC to price 0% CDs with minimum return linked to three indexes

By Angela McDaniels

Tacoma, Wash., March 2 - HSBC Bank USA, NA plans to price 0% certificates of deposit with minimum return due March 28, 2016 linked to a basket of indexes, according to a term sheet.

The equally weighted basket includes the Dow Jones Euro Stoxx 50 index, Hang Seng index and S&P 500 index.

The payout at maturity will be par plus the greater of the index return and the minimum return, which is expected to be 2% to 5% and will be set at pricing.

The final index level will be the average of the index's closing levels on March 23, June 23, Sept. 23 and Dec. 23 of each year starting in June 2010 and ending in March 2016.

The CDs will be putable on March 31, 2011, March 31, 2012, March 31, 2013, March 31, 2014 and March 31, 2015. The redemption amount will be the then-current market value of the CDs minus an early redemption charge 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 charge in year five or six.

The CDs will price March 22 and settle March 26.

HSBC Securities (USA) Inc. is the agent.

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