HSBC plans five-year annual income opportunity CDs on industry titans

By Marisa Wong

Madison, Wis., Sept. 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit with auto cap feature due Oct. 1, 2015 linked to a basket of stocks, according to a term sheet.

The basket includes Applied Materials Inc., Biogen Idec Inc., Dominion Resources Inc., Ford Motor Co., Las Vegas Sands Corp., McDonald's Corp., Newmont Mining Corp., Nucor Corp., Procter & Gamble Co., PNC Financial Services Group Inc., Sandisk Corp. and Valero Energy Corp.

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

If a basket stock's return is zero or positive, its performance will be fixed at 6% to 9%. If a basket stock's return is negative, its performance will be the greater of the stock return and negative 50%.

The payout at maturity will be par.

The CDs will be putable on Oct. 31, 2011, Oct. 31, 2012, Oct. 31, 2013 and Oct. 31, 2014. Investors will receive the current market value of the CDs.

The CDs (Cusip: 40431GEP0) will price Sept. 27 and settle Sept. 30.

HSBC Securities (USA) Inc. is the agent.

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