HSBC USA to price 14% reverse convertibles linked to four stocks

By Angela McDaniels

Seattle, June 27 - HSBC USA Inc. plans to price reverse convertible notes due Jan. 10, 2008 linked to an equally weighted basket of stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket will include the common stocks of Amazon.com, Inc., Under Armour, Inc. and United States Steel Corp. and the American Depositary Shares of Elan Corp. plc.

The six-month notes will pay 7% for an annualized rate of 14%. Interest will be payable monthly.

For each component stock, the payout at maturity will be $250 unless that stock falls below its barrier price - 75% of its initial share price - during the life of the notes and finishes below its initial share price, in which case the payout for that component stock will be a number of its shares equal to $250 divided by the initial share price or, at HSBC USA's option, the equivalent cash value.

The total payout at maturity will be equal to the sum of the payouts for the four components.

The notes are expected to price on July 5 and settle on July 10.

HSBC Securities (USA) Inc. will be the agent.

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