HSBC Bank plans to price sector selector CDs linked to ETF basket

By Angela McDaniels

Tacoma, Wash., July 30 - HSBC Bank USA, NA plans to price 0% sector selector certificates of deposit with minimum return due Aug. 27, 2015 linked to a basket of exchange-traded funds, according to a term sheet.

The basket includes the iShares MSCI Emerging Markets index fund, Market Vectors Gold Miners, Energy Select Sector SPDR fund, Financial Select Sector SPDR fund, Healthcare Select Sector SPDR fund and Semiconductor Holdrs Trust.

The payout at maturity will be par plus the sum of the locked-in returns, subject to a minimum return of 5%.

On Aug. 24 of each year, the fund that has experienced the highest return on that day will be selected and its return will be the locked-in return for that observation date, subject to a cap that is expected to be 8% to 11% and will be set at pricing. This fund will then be removed from the basket.

The CDs will be putable on Aug. 30, 2010, Aug. 30, 2011, Aug. 30, 2012, Aug. 30, 2013 and Aug. 29, 2014. The redemption amount will be the current market value of the CDs minus an early redemption fee of 3% in year one, 2% in year two and 1% in year three. There is no fee in year four, five or six.

The CDs are expected to price Aug. 24 and settle Aug. 27.

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.