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

By Jennifer Chiou

New York, Feb. 25 - HSBC Bank USA, NA plans to price contingent annual income certificates of deposit due March 29, 2016 linked to an equally weighted basket of 20 common stocks, according to a term sheet.

The basket includes American Electric Power Inc., Archer-Daniels-Midland Co., AT&T Inc., Baker Hughes Inc., Bristol-Myers Squibb Co., Caterpillar Inc., Comcast Corp., ConocoPhillips, Corning Inc., Dow Chemical Co., Exelon Corp., General Electric Co., Intel Corp., Johnson Controls Inc., Merck & Co., MetLife, Inc., Nucor Corp., Philip Morris International Inc., Verizon Communications Inc. and Wells Fargo & Co.

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

If a basket stock's return is positive, its performance will equal a fixed rate of 9% to 11%. The exact rate will be set at pricing. If a basket stock's return is negative, its performance will be equal to its return, subject to a floor of negative 30%.

The payout at maturity will be par.

The CDs are expected to price on March 25 and settle on March 30.

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

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