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Capital Protected Investment Deposit (CPI) - Interest Rate Linked AutoCallable Deposit
How it works
- The deposit provides a high potential interest return with a quarterly autocall feature. The potential high interest return is stepped up by 2% for each quarter.
- Customer will receive the deposit amount and a high potential interest return once LIBOR fixed at the end of any quarterly period is at or below the barrier.
Example
| Deposit currency | US dollar (USD) | ||||||||||||||||
| Deposit period | 2 years | ||||||||||||||||
| Deposit amount | US$13,000 | ||||||||||||||||
| Trade date | 24 November 200X | ||||||||||||||||
| Deposit date | 28 November 200X | ||||||||||||||||
| Maturity date | 28 November (200X+2 years) | ||||||||||||||||
| Barrier | 3.69% | ||||||||||||||||
| AutoCall feature |
When LIBOR fixed is at or below the Barrier, the deposit will be paid back automatically on the quarterly payment date at an amount equal to 100% of deposit amount times the following percentage:
Otherwise, the deposit will be redeemed at 100% at maturity date. |
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| Fixing Date frequency | Quarterly | ||||||||||||||||
| LIBOR | In respect of any quarterly fixing date, USD 3-month LIBOR as of the fifth London business days prior to the relevant quarterly payment date. |
Risk disclosure:
- The above deposits are not the same as nor should they be treated as a substitute for normal fixed time deposits.
- The return in relation to a deposit will depend upon market conditions prevailing at the relevant fixing time(s) during or in respect of the relevant deposit period. The level of the underlying asset may go up or down during such period and this will affect the return. The return may be less than would have been payable on a normal time deposit for the same period.
- You must be prepared to risk the interest that might otherwise have been earned on money invested as a deposit.
- If the deposit is not in your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations.
- You should consider whether the products are suitable based on your risk appetite, investment experience and objectives. If you have any concerns about the products you should consult your professional advisers.
- This Structured Investment Deposit is a structured product involving derivatives. The investment decision is yours but you should not invest in Structured Investment Deposit unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
- This Structured Investment Deposit is NOT equivalent to a time deposit. It is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong.
- Issuer's Risk - you rely on HSBC's creditworthiness. The product is subject to both the actual and perceived measures of the credit worthiness of the Bank and there is no assurance of protection against a default by the Bank in respect of its payment obligations.
- In the worst case scenario (e.g. insolvency of issuer), the investor may get nothing back and the potential maximum loss could be 100% of investment amount and no coupon received.
