HSBC International Opportunity Deposit Notes, Series 1

Matured price*: 98.58 %
Maturity date: 17 December 2014

The Notes will pay, if held to maturity: i) 100 per cent of the principal amount invested; and ii) a variable return, if any, linked to the increase, if any, in the value of a notional portfolio comprised of seven unequally weighted international indices. The performance (positive or negative) of each index will be measured from its initial index level (12 December 2007) to the final index level (12 December 2014). The performance of the seven indices (positive or negative) will then be unequally weighted (outlined below) to determine the variable return, if any.

Key features

Issue date: 17 December 2007
Maturity date: 17 December 2014
Note term: 7 years
CUSIP #: CA40427HNJ81
Currency: CAD
Participation: 100%
Selling agent fees: 3.5% paid upfront

Highlights

  • Eligible for registered accounts
  • Principal protected at maturity
  • Linked to seven international indices (unequally weighted)

Underlying asset(s)

Notional index basket
Index Ticker Index component weight
DJ Euro Stoxx 50® Index SX5E 40%
FTSE 100 Index® UKX 20%
MSCI Singapore IndexSM SGY 9%
MSCI Taiwan IndexSM TWY 9%
Hang Seng Index® HIS 9%
Nikkei 225 StockSM Index NKY 7%
Swiss Market Index® SMI 6%

Are the Notes right for you?

The Notes may be an appropriate investment for you, if, among other things, you: (1) are looking for safety of principal if held to maturity; (2) want exposure to an investment that is linked to the performance of international equities while tracking the performance of major international market indices; (3) want to diversify your exposure to more than one international equity index; and (4) are investing for the longer term and believe that international equity markets will appreciate.

The Notes do not provide investors with a return or income stream prior to maturity. The effective yield to maturity of the Notes may be less than that which would be payable on a conventional fixed-rate or floating-rate debt instrument. The Notes are generally more suitable for purchasing and holding up to maturity. Potential investors should consult with their own investment, legal and tax advisors to determine the suitability.

Early trading charges/Secondary market

HSBC Securities (Canada) Inc intends, in normal market conditions, but is under no obligation, to use reasonable efforts to provide a secondary price for the Notes as principal, but reserves the right not to do so in the future at its sole discretion, without providing prior notice to the Noteholders. Sale of Notes prior to maturity may be subject to an early trading charge as follows:

Time period Early trading charge
Issue date to and including 17 June 2008 3.5%
18 June 2008 to and including 17 December 2008 3%
18 December 2008 to and including 17 June 2009 2%
18 June 2009 to and including 17 December 2009 1%
From 18 December 2009 to and including maturity date 0%

Please see the information statement for further details or contact your investment advisor.

Risk factors

Noteholders should carefully review and consider all risks set forth in the information statement with their investment advisor, including:

  • The volatility or degree to which the level of each underlying Index changes
  • International equity market exposure
  • Notes will not constitute insured deposits under Canada Deposit Insurance Corporation Act (Canada)
  • The principal amount is protected only if Notes are held to maturity and there is no assurance the Notes will pay any variable return
  • No guaranteed secondary market
  • Price or other movements in the instrument or instruments comprising each index are unpredictable
  • The historical or pro forma performance of each index is not an indication of future performance
  • Special circumstances – HSBC may redeem the Notes prior to maturity under certain limited circumstances, including a change in the law, regulation, taxation regulations or taxation practice or other circumstances not within the control of the Bank
  • Conflicts of interest with the calculation agent and the index sponsor

Additional information

Right of Rescission – A subscriber may only rescind any order to buy a Note (or its purchase if issued) by notice in writing to HSBC within 48 hours of the earlier of actual receipt and deemed receipt of the information statement. Such notice should be directed to: Senior Vice President, HSBC Derivative Products Group, 70 York Street, 8th Floor, Toronto, ON M5J 1S9. This rescission right does not extend to Noteholders buying a Note in any secondary market.

Amendments to Notes – The global deposit note filed on CDS representing the Notes may be amended without the consent of the holders by the Bank if, in the reasonable opinion of the Bank, the amendment would not materially and adversely affect the interests of the holders. In other cases, the global deposit note may be amended if the amendment is approved by a resolution passed by the favourable votes of the holders of not less than 662/3 per cent of the Notes.

Please see the information statement for further details. Please do not hesitate to call us at +1 866 511 4722 or send us an
e-mail for more information.

*The price is before the application of an early trade charge that may apply. The secondary market price for a Note, if available, represents the bid price of such Note as a percentage (%) of the original principal amount invested. The bid price stated is only as of the date indicated.

Important: Please read the disclaimer carefully.