HSBC to price seven-year annual income opportunity CDs on 10 stocks

By Jennifer Chiou

New York, Oct. 3 - HSBC USA Bank, NA plans to price annual income opportunity certificates of deposit with auto cap due Oct. 31, 2018 linked to a basket of 10 stocks, according to a pricing sheet.

The basket includes the common stocks of Altria Group, Inc., Amazon.com, Inc., Amgen Inc., Archer-Daniels-Midland Co., AT&T Inc., Barrick Gold Corp., General Mills, Inc., Halliburton Co., Intel Corp. and Mattel, Inc.

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 7.25% to 10.25%. The exact auto cap rate will be determined at pricing. 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.

Though the issuer is not obligated to repurchase the securities, the CDs will be putable at any time. 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 redemption charge for years five through seven.

The CDs (Cusip: 40431GZD4) will price on Oct. 26 and settle on Oct. 31.

HSBC Securities (USA) Inc. is the agent.

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