HSBC to price annual income opportunity CDs linked to BRIC titans

By Angela McDaniels

Tacoma, Wash., June 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due June 29, 2016 linked to a basket of stocks, according to a term sheet.

The basket includes Aluminum Corp. of China Ltd., Baidu, Inc., China Mobile Ltd., Cnooc Ltd., Companhia de Bebidas das Americas SA (AmBev), Icici Bank Ltd., Infosys Technologies Ltd., Mobile Telesystems, Mechel, Petroleo Brasileiro SA, Tata Motors Ltd. and Vale SA.

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

The return of each stock will be subject to a floor of negative 30% and a cap of 7% to 11%. The exact cap will be set at pricing.

The payout at maturity will be par.

The CDs will be putable on July 29, 2011, July 30, 2012, July 30, 2013, July 30, 2014 and July 30, 2015. Investors will receive the current market value of the CDs minus a 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.

The CDs (Cusip: 40431GAQ2) will price June 24 and settle June 29.

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

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