HSBC plans five-year Rate Builder CDs linked to Safety Rank 1 stocks

By Marisa Wong

Morgantown, W.Va., Feb. 8 – HSBC Bank USA, NA plans to price Rate Builder certificates of deposit due Feb. 27, 2023 linked to a basket of 10 stocks assigned Safety Rank 1 by Value Line, according to a term sheet.

The 10 stocks are Boeing Co., Cisco Systems, Inc., Chevron Corp., Deere & Co., Eli Lilly & Co., Kellogg Co., Pfizer Inc., Procter & Gamble Co., UnitedHealth Group Inc. and Verizon Communications Inc.

According to Value Line, stocks with Safety Rank 1 are “the safest, most stable and least risky investment relative to the Value Line universe” of 1,700 stocks.

Interest will be payable annually. The interest rate will depend on the number of basket stocks that close at or above their initial share prices on the valuation date for that year. The interest rate will be 5% if the number of stocks is 10, 4% if the number is nine, 3% if the number is eight, 2% if the number is seven, 1% if the number is six and 0.75% if the number is five or fewer.

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

HSBC Securities (USA) Inc. is the agent. Incapital LLC is the distributor.

The CDs will price Feb. 22.

The Cusip number is 40434YUU9.

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