HSBC plans seven-year Annual Income Opportunity CDs on global titans

By Jennifer Chiou

New York, Jan. 4 - HSBC Bank USA, NA plans to price Annual Income Opportunity certificates of deposit with auto cap feature due Jan. 31, 2019 linked to a global industry titans basket of 10 common stocks, according to a term sheet.

The basket includes AstraZeneca plc, Encana Corp., General Mills, Inc., Gerdau SA, Home Depot, Inc., Icici Bank Ltd., Randgold Resources Ltd., Taiwant Semiconductor Manufacturing Co., Unilever NV and Vodafone Group plc.

Interest is payable annually and will equal the average of the performances of the basket stocks, subject to a minimum interest rate of zero.

A stock's performance will be equal to the auto cap rate if its return is zero or positive. The auto cap rate is expected to be at least 7% and will be set at pricing. If a stock's return is negative, its performance will be the greater of its return and negative 30%.

The payout at maturity will be par plus the last coupon payment.

The issuer said it is generally willing to repurchase CDs from depositors at any time. It will pay the early redemption amount, which equals par plus any interest due plus the early redemption fee and less an early withdrawal charge of 3.5% in year one, 2.5% in year two, 1.5% in year three, 0.5% in year four and zero after that. The early redemption fee is the current market value of the CDs minus any interest due and minus the principal amount of the CDs.

The CDs (Cusip: 40431GG60) will price on Jan. 26 and settle on Jan. 31.

HSBC Securities (USA) Inc. is the agent.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.