Barclays gears up to price slate of reverse convertibles; HSBC to price 4-year global basket CD via JVB

By Sheri Kasprzak

New York, Nov. 2 - Barclays plc led structured products news Thursday with word that it plans to price a large slate of reverse convertible offerings.

Even though the reference stocks have little in common, most of the notes are due May 31, 2007 and all are set to price Nov. 28.

"We're just keeping up with investor demand," said one market source familiar with the deals. "This is what the investors want us to do, so we're doing it."

Coupons from 8.75% to 15.5%

All of the notes to be priced Nov. 28 carry an 80% knock-in price.

The notes include 12.5% notes linked to Weatherford International Ltd., 15% notes linked to United States Steel Corp., 10% Starbucks-linked notes, 15.5% notes linked to Level 3 Communications Corp., 10.5% notes linked to Halliburton Co., 13% notes linked to Radio Shack Corp., 15.5% notes linked to Goodyear Tire & Rubber Co., 15% notes linked to Corning Inc., 11.5% notes linked to Amerada Hess Corp., 17.5% Goldcorp Inc.-linked notes and 15.5% Consol Energy Inc.-linked notes, all due May 31, 2007. The investment bank also plans to price 8.75% Southwest Airlines Co.-linked notes, 8.75% Commerce Bancorp Inc.-linked notes and 9.5% Marathon Oil Corp.-linked notes, all due Nov. 30, 2007.

Some names return

Several of the underlying stocks are repeat visitors to the structured products market.

In the past two months, Barclays has priced other reverse convertibles linked to Starbucks. In October, JPMorgan Chase & Co. priced 10.1% reverse convertibles linked to Halliburton, ABN Amro announced its plans to price reverse convertibles linked to U.S. Steel and HSBC Bank USA NA planned 10.5% notes linked to Corning.

HSBC's ratchet-up CD

In other structured products news, HSBC Bank USA NA said it plans to price four-year global index-linked certificates of deposit through JVB Financial Group, LLC.

This is the second offering of ratchet-up CDs HSBC has offered through JVB in as many months.

The underlying indexes in this CD include the Standard & Poor's 500 index, the Nikkei 225 index and the Dow Jones EuroStoxx 50 index. The CD will mature Nov. 29, 2010 and is set to price Nov. 22.

Payment at maturity will be par plus the percentage increase of the index from the starting index value to the closing index value based upon the average of eight ratcheted fixing levels.

Other CD priced in October

In October, HSBC priced six-year global equity index-linked ratchet-up semi-annual averaging CDs through JVB.

Those CDs were linked to equal weights of the Dow Jones Euro Stoxx 50, Nikkei 225, Hong Kong Hang Seng, Morgan Stanley Capital International Singapore Cash and iShares MSCI Emerging Markets Index Fund.

The CDs mature Oct. 31, 2012.

Steve Peters of JVB said in a recent interview that the ratchet-up averaging feature is important to investors because they will receive protection from erosion in gains on the index.

"The ratchet-up doesn't take into account losses in the index," he said during an interview on the October CDs.

CDs are growing in popularity, Peters said, in part because they carry FDIC insurance.

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