HSBC and LGII provide structured deposits with capital protection

In an innovative response to savers' concerns over declining interest rates, Legal & General International (Ireland) Limited (LGII) is working with HSBC Bank plc to provide a series of structured deposits.

The Protected FTSE Range Deposit (the Deposit), offers customers potentially better returns than are currently available on traditional deposit accounts. The Deposit which is linked to the performance of the FTSE 100 Index (the Index) is only available through the International Portfolio Bond (IPB) from LGII.

Deposits are held with HSBC and provide investors with the security of knowing that their initial capital (net of charges on the Bond) is protected in full as long as they remain invested for the initial investment term*. The Deposit, however, is not covered by the UK Financial Services Compensation Scheme.

The IPB is a single premium life assurance product, which allows investors access to a wide range of assets (including the HSBC Deposit).

The Deposit is available in regular tranches each with an agreed initial investment term. The terms are likely to be different, based on market conditions at the time with rates adjusted according to prevailing market terms.

The current product is open for investment from Monday 8 June until close of business on Friday 17 July 2009. At the end of the initial investment term on 29 July 2011 the Deposit offers a coupon of 12 per cent as long as the Index trades within a range of 80per cent to 140 per cent of the Initial Index Level. If at any time the Index trades outside of this range, the coupon is lost and investors will only receive back their initial investment (at the end of the initial investment term). The Deposit runs for an indefinite period. However, at the end of the initial investment term the Deposit pays interest at 2 per cent below the Bank of England base rate per annum with the minimum interest rate set at zero.

Philip Gilbert, HSBC Global Markets commented, "We recognise that financial security is of paramount importance to our customers. That is why we are working with Legal & General International to create the Protected FTSE Range Deposit.

Our aim is to combine the benefits of the International Portfolio Bond with a product backed by HSBC Bank plc, (rated AA** by Standard & Poor's), to offer an attractive opportunity and the potential to outperform returns from money on deposit while protecting initial capital."

CEO of Legal & General International (Ireland) Ltd, David Fagan said: "Legal & General International and HSBC have joined forces to develop an offering which directly addresses current investor concerns and provides them with a viable alternative to keeping their money on deposit. By combining our competitive International Portfolio Bond with an asset which provides capital protection, we have constructed an offering designed to give investors capital security coupled with the potential to receive an attractive return. We believe the timing of this initiative provides advisers with a perfect opportunity to positively engage with their clients."

The Deposit is available only through the IPB from LGII There is no minimum investment in the Deposit although the IPB minimum investment of £50,000 for new investments and £2,500 for top-ups applies. The Deposit is also available to existing IPB customers. Existing IPB clients can switch at least £2,500 of their holdings into the Deposit, subject to existing terms and conditions.

Financial advisers who would like more information on the IPB and The Deposit should call the International Contact Centre on 0845 6740 803. Lines are open from 9.00 am to 5.30 pm Monday to Friday. We may record and monitor calls. Call charges will vary.

*The Deposit is placed with HSBC Bank Plc. If any withdrawals are taken from the Deposit before the end of the initial investment term, the investor may get back substantially less than they invested.

Capital protection is subject to HSBC fulfilling its obligations.

** As at 23 April 2009