HSBC to price six-year annual income opportunity CDs linked to U.S. industry titans

By Angela McDaniels

Tacoma, Wash., Aug. 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit with auto cap feature due Aug. 31, 2016 linked to a basket of stocks, according to a term sheet.

The basket includes Applied Materials Inc., Biogen Idec Inc., Dominion Resources Inc., Ford Motor Co., Las Vegas Sands Corp., McDonald's Corp., Newmont Mining Corp., Nucor Corp., Procter & Gamble Co., PNC Financial Services Group Inc., Sandisk Corp. and Valero Energy Corp.

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%. 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 will be putable on Sept. 30, 2011, Sept. 28, 2012, Sept. 30, 2013, Sept. 30, 2014 and Sept. 30, 2015. Investors will receive the current market value of the CDs minus an early redemption charge of 3.5% in year one, 2.5% in year two, 1.5% in year three and 0.5% in year four. There is no charge in year five.

The CDs (Cusip: 40431GCW7) will price Aug. 26 and settle Aug. 31.

HSBC Securities (USA) Inc. is the agent.

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