HSBC to price seven-year CDs linked to Dow Jones Industrial Average

By Angela McDaniels

Tacoma, Wash., Oct. 4 - HSBC Bank USA, NA plans to price 0% certificates of deposit due Oct. 26, 2017 linked to the Dow Jones Industrial Average, according to a term sheet.

The payout at maturity will be par plus the index return, subject to a floor of par.

The final index level will be the average of the index's closing levels on Jan. 21, April 21, July 21 and Oct. 21 of each year during the life of the CDs.

The CDs will be putable on Oct. 31, 2011, Oct. 31, 2012, Oct. 31, 2013, Oct. 31, 2014, Oct. 30, 2015 and Oct. 31, 2016. Investors will receive the current market value of the CDs minus a redemption charge of 3% in year one, 2% in year two and 1% in year three. There is no charge in years four through six.

The CDs (Cusip 40431GFK0) will price Oct. 21 and settle Oct. 26.

HSBC Securities (USA) Inc. is the agent.

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