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HSBC plans income plus CDs tied to stocks with 4.5% potential coupon
By Angela McDaniels
Tacoma, Wash., Feb. 2 - HSBC Bank USA, NA plans to price income plus certificates of deposit due Feb. 27, 2018 linked to a basket of common stocks, according to a term sheet.
The basket includes Home Depot, Inc., Kraft Foods, Inc., McDonald's Corp., Merck & Co., Inc. and Verizon Communications, Inc.
Interest will be payable annually. The interest rate will be 1.5% plus (a) the performance-based annual coupon if each basket stock closes at or above its initial share price on the valuation date or (b) 0% otherwise. The performance-based annual coupon is expected to be at least 3% and will be set at pricing.
The payout at maturity will be par.
The CDs will be putable on March 30, 2012, March 28, 2013, March 31, 2014, March 31, 2015, March 31, 2016 and March 31, 2017. Investors will receive the current market value of the CDs.
The CDs (Cusip: 40431GMM8) will price Feb. 22 and settle Feb. 25.
HSBC Securities (USA) Inc. is the agent.
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