HSBC Bank to price contingent annual income CDs linked to 20 stocks

By Angela McDaniels

Tacoma, Wash., Sept. 28 - HSBC Bank USA, NA plans to price contingent annual income certificates of deposit due Oct. 30, 2015 linked to an equally weighted basket of 20 common stocks, according to a term sheet.

The basket includes Alcoa Inc., Amazon.com, Inc., Apple Inc., AT&T Inc., Bank of America Corp., Boeing Co., ConocoPhillips, Devon Energy Corp., Entergy Corp., Exelon Corp., Freeport-McMoRan Copper & Gold Inc., General Electric Co., Gilead Sciences, Inc., Hewlett-Packard Co., Home Depot, Inc., Pfizer Inc., Philip Morris International Inc., Procter & Gamble Co., Verizon Communications Inc. and Wells Fargo & Co.

Interest will be payable in October of each year and will equal the sum of the stocks' weighted returns, subject to a floor of zero.

The return of each basket stock for each annual interest period will be subject to a cap of 9% to 13% and a floor of negative 30%. The exact cap will be set at pricing.

The payout at maturity will be par.

The CDs are expected to price Oct. 23 and settle Oct. 30.

HSBC Securities (USA) Inc. is the agent. Morgan Stanley Smith Barney is the distributor.

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