HSBC to price annual income opportunity CDs linked to emerging markets stock basket

By Marisa Wong

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

The basket includes the common stocks of Check Point Software Technologies Ltd., Infosys Technologies Ltd. and Mobile Telesystems and the American Depositary Receipts of Anglogold Ashanti Ltd., Baidu Inc., Gold Fields Ltd., Harmony Gold Mining Co. Ltd., Icici Bank Ltd., Teva Pharmaceutical Industries Ltd., Turkcell Iletisim Hizmetleri AS, Tata Motors Ltd. and Yingli Green Energy Holding Co. Ltd.

Interest is payable annually and will equal the average of the returns of the basket stocks, subject to a floor of zero. The return of each basket stock is subject to a cap of 6% to 9% and a floor of negative 30%.

The payout at maturity will be par.

The CDs will be putable on Oct. 31, 2011, Oct. 31, 2012, Oct. 31, 2013, Oct. 31, 2014 and Oct. 30, 2015. Investors will receive the current market value of the CDs minus an early redemption charge of 3% in year one, 2% in year two and 1% in year three. There is no charge in year four or five.

The CDs (Cusip: 40431GER6) will price Sept. 24 and settle Sept. 29.

HSBC Securities (USA) Inc. is the agent.

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