Interest rates call
HSBC is offering US investors a 10-year investment in interest rates that pays 7% in year one and potentially as much in following years. The product is wrapped in a certificate of deposit, but investors may lose out if HSBC exercises its call at five years
Product description
The level of a constant maturity swap (CMS) rate is the prevailing value of the interest rate swap for the maturity specified. Unlike swap rates, which are fixed for the maturity required and remain the same during the life of the swap, the CMS rate is derived from CMS rates interest rate swaps for the tenor in question. The value of the coupon is based on the difference between two rates rather than any growth in the value of either CMS rate. When the prospectus for this
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