HSBC plans three-year annual income opportunity notes on 12 stocks

By Jennifer Chiou

New York, Sept. 7 - HSBC USA Inc. plans to price annual income opportunity securities with auto cap due Oct. 2, 2014 linked to a basket of stocks, according to an FWP with the Securities and Exchange Commission.

The underlying companies are Alpha Natural Resources, AT&T, El Paso Corp., Ford Motor Co., Freeport-McMoRan Copper & Gold, Gap Inc., Las Vegas Sands Corp., Nvidia Corp., Pfizer Inc., Salesforce.com Inc., Time Warner Inc. and Xerox Corp.

The coupon will be the average return of the basket stocks, up to the auto cap rate of 4% to 6%. Interest is payable annually and cannot be less than zero.

If a basket stock's return is zero or positive, the return will be 4% to 6%. 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 notes (Cusip: 4042K1NJ8) will price on Sept. 27 and settle on Sept. 30.

HSBC Securities (USA) Inc. is the agent.

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