Published on 8/27/2007 in the Prospect News Structured Products Daily.
New Issue: HSBC issues $4 million 20% down & in worst of reverse convertibles linked to stock basket
By Susanna Moon
Chicago, Aug. 27 - HSBC USA Inc. priced $4 million of 20% down & in worst of reverse convertible notes due Aug. 28, 2008 linked to a basket of 10 stocks, according to a 424B2 filing with the Securities and Exchange Commission.
Interest is payable monthly.
The basket includes the stocks 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. Du Pont De Nemours and Co.
The payout will be determined according to the performance of all reference assets during the life of the notes. At maturity, investors will receive par unless any stock falls below its barrier price - 65% of its initial share price - during the life of the notes and the worst-performing stock finishes below its initial share price, in which case the payout will be a number of the worst-performing stock equal to $1,000 divided by its initial share price.
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. (NYSE: MO), Citigroup Inc. (NYSE: C), AT&T Inc. (NYSE: T), Pfizer Inc. (NYSE: PFE), JPMorgan Chase & Co. (NYSE: JPM), Merck & Co., Inc. (NYSE: MRK), General Electric Co. (NYSE: GE), Verizon Communications Inc. (NYSE: VZ), General Motors Corp. (NYSE: GM) and E.I. Du Pont De Nemours and Co. (NYSE: DD)
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| Amount: | $4,001,000
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| Maturity: | Aug. 28, 2008
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| Coupon: | 20%, payable monthly
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| Price: | Par
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| Payout at maturity: | Par unless any stock falls below its barrier price during the life of the notes and the final share price of the worst-performing stock is below its initial share price, in which case the payout will be a number of the worst-performing shares equal to $1,000 divided by its initial share price
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| Initial share prices: | Altria at $69.19, Citigroup at $48.50, AT&T at $40.36, Pfizer at $24.74, JPMorgan at $45.95, Merck at $50.82, GE at $39.41, Verizon at $42.64, GM at $31.05 and Dupont at $49.08
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| Barrier prices: | Altria at $44.9735, Citigroup at $31.525, AT&T at $26.234, Pfizer at $16.081, JPMorgan at $29.8675, Merck at $33.033, GE at $25.6165, Verizon at $27.716, GM at $20.1825 and Dupont at $31.902; 65% of initial share price
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| Pricing date: | Aug. 24
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| Settlement date: | Aug. 29
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 3%
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