HSBC plans to price five-year barrier multi-coupon opportunity CDs linked to Russell 2000

By Angela McDaniels

Tacoma, Wash., Aug. 3 - HSBC Bank USA, NA plans to price barrier multi-coupon opportunity certificates of deposit due Aug. 27, 2015 linked to the Russell 2000 index, according to a term sheet.

The CDs will pay a coupon in August of each year. If the index remained at or below the barrier level throughout the previous year, the coupon will be the greater of the index return and zero. If the index was ever above the barrier, no coupon will be paid.

The barrier will be 115% of the initial index level for the first year and will increase to 120% to 125% of the initial level in the second year, to 130% in the third year, to 140% in the fourth year and to 150% in the fifth year. The exact barrier for the second year will be set at pricing.

The payout at maturity will be par.

The CDs will be putable on Sept. 30, 2011, Sept. 28, 2012, Sept. 30, 2013 and Sept. 30, 2014. Investors will receive the market value of the CDs minus an early redemption charge of 2.5% in year one, 1.5% in year two and 0.5% in year three. There is no charge in year four.

The CDs (Cusip: 40431GDQ9) will price Aug. 23 and settle Aug. 26.

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

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