HSBC plans income opportunity CDs linked to 12 wide moat stocks

By Toni Weeks

San Diego, Aug. 3 - HSBC Bank USA, NA plans to price annual income opportunity CDs with auto cap due Aug. 30, 2018 linked to a basket of 12 stocks, according to a term sheet.

The basket includes the common stocks of Applied Materials, Inc., Biogen Idec Inc., BlackRock, Inc., Boston Scientific Corp., Companhia de Bebidas, eBay Inc., Harley-Davidson, Inc., Johnson & Johnson, Maxim Integrated Products, Inc., Monsanto Co., Potash Corp. of Saskatchewan Inc. and Vulcan Materials Co.

Each of the basket stocks had received a Morningstar Economic Moat rating of "wide" as of July 25.

Interest is payable in August of each year 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% to 10%. 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.

The CDs (Cusip: 40431GVV8) are expected to price Aug. 25 and settle Aug. 28.

HSBC Securities (USA) Inc. is the agent.

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