HSBC Bank plans to price income opportunity CDs linked to Asian titans

By Marisa Wong

Madison, Wis., March 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit with auto cap feature due March 30, 2017 linked to a basket of 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.

The CDs will pay a coupon in March of each year equal to the average of the basket stocks' component returns, subject to a minimum of zero.

If a basket stock's underlying return is flat or positive, its component return will equal the auto cap rate, which is expected to be 7% to 10% and will be set at pricing. Otherwise, its component return will be the greater of its underlying return and negative 30%.

The payout at maturity will be par.

The CDs will be putable on April 30, 2012, April 30, 2013, April 30, 2014, April 30, 2015, and April 29, 2016. Investors will receive the current market value of the CDs minus a 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 redemption charge for year five.

The CDs (Cusip: 40431GNQ8) will price March 25 and settle March 30.

HSBC Securities (USA) Inc. is the agent.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.