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HSBC to price annual income opportunity CDs linked to Asian titans
By Toni Weeks
San Diego, Sept. 7 - HSBC Bank USA, NA plans to price annual income opportunity CDs with auto cap feature due Sept. 27, 2018 linked to a basket of 10 stocks, according to a term sheet.
The basket includes the common stocks of Aluminum Corp. of China Ltd., Baidu, Inc., China Unicom, Chunghwa Telecom Co., Ltd., CNOOC Ltd., Icici Bank Ltd., Infosys Technologies Ltd., LG Display Co. Ltd., SK Telecom Co., Ltd. and Tata Motors Ltd.
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 6% to 9%. 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 issuer said it is generally willing to repurchase CDs from depositors at any time. It will pay the current market value of the CDs minus an early withdrawal charge of 3.5% in year one, 2.5% in year two, 1.5% in year three and 0.5% in year four.
The CDs (Cusip: 40431GYU7) are expected to price Sept. 23 and settle Sept. 28.
HSBC Securities (USA) Inc. is the agent.
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