HSBC plans four-year barrier multi-coupon opportunity CDs linked to Market Vectors Gold Miners ETF

By Angela McDaniels

Tacoma, Wash., April 5 - HSBC Bank USA, NA plans to price 0% barrier multi-coupon opportunity certificates of deposit due April 28, 2014 linked to the Market Vectors Gold Miners exchange-traded fund, according to a term sheet.

The CDs will pay a coupon in April of each year. If the fund's share price remained at or below the barrier level throughout the previous year, the coupon will be equal to the greater of the fund return and zero. If the share price was ever above the barrier, the coupon will be equal to the rebate return.

The barrier is 120% of the initial share price for the first year and will increase to 130% of the initial price in the second year, to 140% in the third year and to 150% in the fourth year. The rebate return is expected to be 0.5% to 1% and will be set at pricing.

The payout at maturity will be par.

The CDs will be putable on May 31, 2011, May 31, 2012 and May 31, 2013. The redemption amount will be the then-current market value of the CDs minus an early redemption charge of 2% in year one and 1% in year two. There is no charge in year three.

The CDs will price April 22 and settle April 27.

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

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