HSBC to price 0% CDs with minimum return linked to Dow Industrials

By Jennifer Chiou

New York, April 5 - HSBC Bank USA, NA plans to price 0% certificates of deposit with minimum return due April 29, 2016 linked to the Dow Jones Industrial Average, according to a term sheet.

The payout at maturity will be par plus the greater of the index return and the minimum return, which is expected to be 2% to 5% and will be set at pricing.

The final index level will be the average of the index's closing levels on July 26, Oct. 26, Jan. 26 and April 26 of each year starting in July 2010 and ending in April 2016.

The CDs will be putable on April 29, 2011, April 30, 2012, April 30, 2013, April 30, 2014 and April 30, 2015. The redemption amount will be the then-current market value of the CDs minus an early 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 will price on April 26 and settle on April 29.

HSBC Securities (USA) Inc. is the agent.

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