HSBC plans five-year annual income opportunity CDs on 12 stocks

By Toni Weeks

San Diego, May 2 - HSBC USA Inc. plans to price annual income opportunity CDs with auto cap due May 31, 2016 linked to a basket of 12 stocks, according to a pricing sheet.

The basket includes the common stocks of Bank of America Corp., Bristol-Myers Squibb Co., Broadcom Corp., Entergy Corp., Mosaic Co., Newmont Mining Corp., Schlumberger Ltd., Tiffany & Co., Verizon Communications, Waste Management, WellPoint Inc. and Yahoo! Inc.

Interest is payable annually and will equal the average of the performances of the basket stocks, subject to a floor of 0.5%.

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 50%.

The payout at maturity will be par.

The notes (Cusip: 40431GRT8) are expect to price on May 25 and settle May 31.

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