HSBC plans annual income opportunity CDs tied to global industry titans

By Angela McDaniels

Tacoma, Wash., Aug. 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit with auto cap feature due Aug. 31, 2016 linked to a basket of stocks, according to a term sheet.

The basket includes the common stocks of Amgen Inc., Barrick Gold Corp., Ebay Inc., Research In Motion Ltd. and UBS AG, the class B common stock of Nike Inc. and the American Depositary Receipts of Astrazeneca plc, Credit Suisse Group, Petrochina Co. Ltd., SAP AG, Sony Corp. and Vodafone Group plc.

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

If a basket stock's return is zero or positive, its performance will be fixed at 7% to 10%. If a basket stock's return is negative, its performance will be the greater of the stock return and negative 30%.

The payout at maturity will be par.

The CDs will be putable on Sept. 30, 2011, Sept. 28, 2012, Sept. 30, 2013, Sept. 30, 2014 and Sept. 30, 2015. Investors will receive the current market value of the CDs minus an early redemption charge of 3.5% in year one, 2.5% in year two and 1.5% in year three. There is no charge in year four or year five.

The CDs (Cusip: 40431GCU1) will price Aug. 26 and settle Aug. 31.

HSBC Securities (USA) Inc. is the agent.

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