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HSBC to price 0.5% accumulated annual return CDs linked to S&P 500
By Angela McDaniels
Tacoma, Wash., April 4 - HSBC Bank USA, NA plans to price 0.5% accumulated annual return certificates of deposit due April 26, 2017 linked to the S&P 500 index, according to a term sheet.
Interest will be payable annually.
The payout at maturity will be par plus the sum of the index's year-over-year return in each of the six years making up the life of the CDs plus the last coupon payment.
The index return in each year will be subject to a cap of 7% to 10% and a floor of negative 20%. The exact cap will be set at pricing.
The CDs will be putable on May 31, 2012, May 31, 2013, May 31, 2014, May 31, 2015 and May 31, 2016. Investors will receive the current market value of the CDs minus a redemption charge of 3.5% in year one, 2.5% in year two, 1.5% in year three and 0.5% in year four.
The CDs (Cusip: 40431GQU6) will price April 21 and settle April 27.
HSBC Securities (USA) Inc. is the agent.
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