Published on 7/27/2007 in the Prospect News Structured Products Daily.
New Issue: HSBC Bank sells $2.053 million 17.5% reverse convertibles linked to worst performing of 10 stocks
By E. Janene Geiss
Philadelphia, June 27 - HSBC USA Inc. priced $2.053 million of 17.5% Down & In Worst of Reverse Convertible Notes due July 30, 2008 linked to a basket of 10 stocks, according to a 424B2 filing with the Securities and Exchange Commission.
The basket is made up of the shares of Altria Group, Inc., Citigroup Inc., AT&T Inc., Pfizer Inc., JPMorgan Chase & Co., Merck & Co., Inc., General Electric Co., Verizon Communications Inc., General Motors Corp. and E.I. DuPont De Nemours and Co.
Interest will be payable at maturity.
If any of the stocks trade below its barrier price, 65% of its initial price, the payout at maturity will be a number of shares equal to $1,000 divided by the initial stock price of the worst performing stock over the life of the notes.
If none of the stocks trades below its barrier price or all the stocks finish above their initial prices, then the payout will be par in cash.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
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| Issue: | Down & In Worst of Reverse convertible notes
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| Underlying stocks: | Altria Group, Inc. (Symbol: MO), Citigroup Inc. (Symbol: C), AT&T Inc. (Symbol: T), Pfizer Inc. (Symbol: PFE), JPMorgan Chase & Co. (Symbol: JPM), Merck & Co., Inc. (Symbol: MRK), General Electric Co. (Symbol: GE), Verizon Communications Inc. (Symbol: VZ), General Motors Corp. (Symbol: GM), E.I. DuPont De Nemours and Co. (Symbol: DD)
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| Amount: | $2.053 million
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| Maturity: | July 30, 2008
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| Coupon: | 17.5% annualized, payable monthly
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| Price: | Par
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| Payout at maturity: | If any of the stocks trade below its barrier price, 65% of its initial price, the payout at maturity will be a number of shares equal to $1,000 divided by the initial stock price of the worst performing stock over the life of the notes; if none of the stocks trades below its barrier price or all the stocks finish above their initial prices, then the payout will be par in cash.
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| Initial prices: | $67.85 for Altria Group, Inc.; $49.21 for Citigroup Inc.; $40.50 for AT&T Inc.; $24.78 for Pfizer Inc., $45.27 for JPMorgan Chase & Co., $53.38 for Merck & Co., Inc., $40.42 for General Electric Co., $43.22 for Verizon Communications Inc., $33.73 for General Motors Corp., $49.19 for E.I. DuPont De Nemours and Co.
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| Barrier prices: | $44.1025 for Altria Group, Inc.; $31.9865 for Citigroup Inc.; $26.3250 for AT&T Inc.; $16.1070 for Pfizer Inc., $29.4255 for JPMorgan Chase & Co., $34.6970 for Merck & Co., Inc., $26.2730 for General Electric Co., $28.0930 for Verizon Communications Inc., $21.9245 for General Motors Corp., $31.9735 for E.I. DuPont De Nemours and Co.
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| Pricing date: | July 25
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| Settlement date: | July 30
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 2.75%
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