HSBC plans six-year annual income opportunity CDs on U.S. titans

By Susanna Moon

Chicago, April 5 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due May 2, 2016 based on the performance of a basket of stocks, according to a term sheet.

The underlying companies are AT&T Inc., Boeing Co., Campbell Soup Co., Celgene Corp., Chubb Corp., Cigna Corp., E.I. DuPont de Nemours & Co., Freeport-McMoran Copper & Gold Inc., Microsoft Corp., Peabody Energy Corp., Qualcomm Inc. and Southern Co.

Interest is payable annually and will equal the average of the performances of the basket stocks, with a floor of zero.

If a stock's return is flat or positive, its performance will be fixed at 8% to 12%, with the exact percentage to be set at pricing. If the stock's return is negative, its performance will be the greater of the return and negative 30%.

The CDs are putable on May 31, 2011, May 31, 2012, May 31, 2013, May 30, 2014 and May 29, 2015.

The payout at maturity will be par.

The CDs will price on April 27 and settle on April 30.

HSBC Securities (USA) Inc. is the agent.

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