HSBC plans six-year annual income opportunity CDs on BRIC titans

By Susanna Moon

Chicago, May 3 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due May 27, 2016 based on the performance of a basket of stocks, according to a term sheet.

The underlying companies are AmBev, Aluminum Corp. of China Ltd., Baidu, Inc., Cnooc Ltd., China Mobile Ltd., Icici Bank Ltd., Infosys Technologies Ltd., Mobile Telesystems, Mechel MTL, Petroleo Brasileiro SA, Tata Motors Ltd. and Vale SA.

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 capped 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 June 30, 2011, June 29, 2012, June 28, 2013, June 30, 2014 and June 30, 2015.

The payout at maturity will be par.

The CDs will price on May 24 and settle on May 27.

HSBC Securities (USA) Inc. is the agent.

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