HSBC plans six-year contingent annual income CDs linked to 20 stocks

By Jennifer Chiou

New York, June 26 - HSBC Bank USA, NA plans to price principal-protected contingent annual income certificates of deposit due July 31, 2015 linked to an equally weighted basket of common stocks, according to a term sheet.

The basket includes Amazon.com, Inc., Lowe's Cos., Inc., Philip Morris International Inc., Wal-Mart Stores, Inc., Chevron Corp., Schlumberger Ltd., Bank of New York Mellon Corp., JPMorgan Chase & Co., Gilead Sciences, Inc., Johnson & Johnson, Lockheed Martin Corp., Union Pacific Corp., Apple Inc., Oracle Corp. Freeport-McMoRan Copper & Gold, Inc., Monsanto Corp., AT&T Inc., Verizon Communications Inc., Entergy Corp. and FPL Group, Inc.

Interest is payable in July of each year and will equal the sum of the weighted returns of the basket stocks. The coupon payment each year will be subject to a floor of zero, and each stock's return will be capped at 10% to 15%. The exact cap will be set at pricing.

The payout at maturity will be par.

The CDs will price on July 24 and settle on July 31.

HSBC Securities (USA) Inc. is the distributor.

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