HSBC plans seven-year annual income opportunity CDs tied to 10 stocks

By Toni Weeks

San Diego, Oct. 3 - HSBC USA Inc. plans to price annual income opportunity CDs with auto cap due Oct. 29, 2018 linked to a basket of 10 stocks, according to a pricing sheet.

The basket includes the common stocks of Monsanto Co., eBay Inc., Exelon Corp., Maxim Integrated Products, Bank of Montreal, Sysco Corp., Eli Lilly & Co., St. Jude Medical Inc., Altria Group Inc. and CME Group 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% 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: 40431GZR3) are expect to price Oct. 25 and settle Oct. 28.

HSBC Securities (USA) Inc. will be the agent.

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