New Issue: HSBC sells $100,000 10.15% reverse convertibles linked to Frontier Oil

By Jennifer Chiou

New York, May 21 - HSBC USA Inc. priced $100,000 of 10.15% annualized reverse convertible notes due Nov. 21, 2007 linked to the common stock of Frontier Oil Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

At maturity, investors will receive par unless Frontier Oil stock falls below the protection price - 80% of the initial share price - during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Frontier Oil shares equal to $1,000 divided by the initial share price.

HSBC Securities (USA) Inc. is the agent.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Frontier Oil Corp.
Amount:	$100,000
Maturity:	Nov. 21, 2007
Coupon:	10.15% annualized, payable monthly
Price:	Par
Payout at maturity:	Par in cash unless Frontier Oil stock falls below $29.23 during the life of the notes and finishes below its initial share price, in which case shares of Frontier Oil equal to $1,000 divided by the initial share price
Initial share price:	$36.54
Protection price:	$29.23, 80% of $36.54
Pricing date:	May 17
Settlement date:	May 22
Agent:	HSBC Securities (USA) Inc.
Fees:	2.5%

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