Published on 8/23/2007 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $1.75 million 18.25% reverse convertibles linked to stock basket
By Laura Lutz
Des Moines, Aug. 23 - HSBC USA Inc. priced a $1.75 million issue of 18.25% reverse convertible notes due Feb. 27, 2008 linked to a stock basket, according to a 424B2 filing with the Securities and Exchange Commission.
The basket consists of equal weights of InterOil Corp.; D.R. Horton, Inc.; Massey Energy Co.; Medarex, Inc.; and Advanced Micro Devices, Inc.
Interest will be payable monthly.
For each component stock, investors will receive 20% of par unless that stock falls below its protection price - 60% of its initial price - during the life of the notes and finishes below its initial price, in which case the payout for that component stock will be a number of shares equal to $200 divided by that stock's initial price.
The total payout at maturity will be equal to the sum of the payouts for the components.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Reverse convertible notes
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| Amount: | $1.75 million
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| Underlying stock basket: | Equal weights of InterOil Corp. (Symbol: IOC); D.R. Horton, Inc. (Symbol: DHI); Massey Energy Co. (Symbol: MEE); Medarex, Inc. (Symbol: MEDX); Advanced Micro Devices, Inc. (Symbol: AMD)
|
| Maturity: | Feb. 27, 2008
|
| Coupon: | 18.25%, payable monthly
|
| Price: | Par
|
| Payout at maturity: | For each component stock, 20% of par unless that stock falls below 60% of its initial price during the life of the notes and finishes below its initial price, in which case payout will be a number of shares of that stock equal to $200 divided by that stock's initial price
|
| Initial prices: | $35.50 for InterOil, $16.38 for D.R. Horton, $19.22 for Massey, $17.74 for Medarex, $12.01 for Advanced Micro Devices
|
| Protection prices: | 60% of initial prices; $21.48 for InterOil, $9.828 for D.R. Horton, $11.532 for Massey, $10.644 for Medarex, $7.206 for Advanced Micro Devices
|
| Pricing date: | Aug. 22
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| Settlement date: | Aug. 27
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| Agent: | HSBC Securities (USA) Inc.
|
| Fees: | 2%
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