New Issue: HSBC USA prices $1 million 15.6% reverse convertibles linked to Frontline

By Laura Lutz

Des Moines, Nov. 21 - HSBC USA Inc. priced a $1 million issue of 15.6% reverse convertible notes due May 29, 2007 linked to Frontline Ltd. stock, according to a 424B2 filing with the Securities and Exchange Commission.

Payout at maturity will be par in cash unless Frontline stock falls below the barrier price of $29.36 during the life of the notes and finishes below its initial price on the valuation day, May 23, 2007, in which case payout will be a number of Frontline shares equal to $1,000 divided by the initial share price.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Frontline Ltd.
Amount:	$1 million
Maturity:	May 29, 2007
Coupon:	15.6%, paid monthly
Price:	Par
Payout at maturity:	If Frontline stock falls below $29.36 during the life of the notes and finishes below its initial price, shares of Frontline stock equal to $1,000 divided by the initial price; otherwise, par in cash
Initial share price:	$39.15
Barrier price:	$29.36, 75% of initial share price
Pricing date:	Nov. 17
Settlement date:	Nov. 29
Agent:	HSBC Securities (USA) Inc.
Agent fee:	2.5%

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