HSBC plans six-year annual income opportunity CDs on ten stocks

By Toni Weeks

San Diego, Jan. 4 - HSBC USA Inc. plans to price annual income opportunity CDs with auto cap due Jan. 31, 2018 linked to a basket of ten stocks, according to a pricing sheet.

The basket includes the common stocks of Dow Chemical Co., Eli Lilly and Co., Freeport-McMoRan Copper & Gold Inc., Goldcorp, Inc., Kraft Foods Inc., McDonald's Corp., Paychex, Inc., Raytheon Co., Reynolds American Inc. and Verizon Communications Inc.

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 a rate that is expected to be at least 5.5%. 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 CDs (Cusip: 40431GF61) are expect to price Jan. 26 and settle Jan. 31.

HSBC Securities (USA) Inc. will be the agent.

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