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HSBC to price 0.5% accumulated annual return CDs linked to S&P 500
By Angela McDaniels
Tacoma, Wash., July 6 - HSBC Bank USA, NA plans to price 0.5% accumulated annual return certificates of deposit due July 26, 2017 linked to the S&P 500 index, according to a term sheet.
Interest will be payable annually.
The payout at maturity will be par plus the greater of the variable amount and zero. Holders will also receive the last coupon payment
The variable amount will be the sum of the index's year-over-year return in each of the six years making up the life of the CDs. The index return in each year will be subject to a cap of 7% to 10% and a floor of negative 20%. The exact cap will be set at pricing.
The CDs will be putable annually. Investors will receive the current market value of the CDs minus an early redemption charge of 3.25% in year one, 2.25% in year two, 1.25% in year three and 0.25% in year four.
The CDs (Cusip: 40431GVJ5) will price July 21 and settle July 26.
HSBC Securities (USA) Inc. is the agent.
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