HSBC plans five-year annual income opportunity CDs on U.S. titans

By Jennifer Chiou

New York, June 2 - HSBC Bank USA, NA plans to price annual income opportunity series 8 certificates of deposit due June 30, 2015 linked to the performance of a basket of U.S. industry titans stocks, according to a term sheet.

The underlying companies are AT&T Inc., Boeing Co., Campbell Soup Co., Celgene Corp., Chubb Corp., Cigna Corp., E.I. DuPont de Nemours & Co., Freeport-McMoran Copper & Gold Inc., Microsoft Corp., Peabody Energy Corp., Qualcomm Inc. and Southern Co.

Interest is payable annually and will equal the average of the performances of the basket stocks, with a floor of 0.5%.

If a stock's return is flat or positive, its performance will be fixed at 7% to 11%, with the exact percentage to be set at pricing. If the stock's return is negative, its performance will be the greater of the return and negative 50%.

The payout at maturity will be par.

The CDs are putable on July 29, 2011, July 31, 2012, July 31, 2013 and July 31, 2014.

The CDs will price on June 25 and settle on June 30.

HSBC Securities (USA) Inc. is the agent. Advisors Asset Management, Inc. is the distributor.

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