HSBC USA to price 25% reverse convertibles linked to 'Dogs of the Dow'

By Angela McDaniels

Tacoma, Wash., April 7 - HSBC USA Inc. plans to price worst of reverse convertible notes due Oct. 30, 2008 linked to the March 2008 "Dogs of the Dow" stock basket, according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 12.5% for an annualized coupon of 25%. Interest will be payable monthly.

The basket includes the common stocks of AT&T Inc., Bank of America Corp., Citigroup Inc., E.I. du Pont de Nemours And Co., General Electric Co., General Motors Corp., JPMorgan Chase & Co., Merck & Co., Inc., Pfizer Inc. and Verizon Communications Inc.

The payout at maturity will be par unless any stock included in the basket falls by more than 50% during the life of the notes and any stock finishes below its initial price, in which case the payout will be a number of shares of the worst-performing stock equal to $1,000 divided by the initial price of that stock.

The notes are expected to price on April 25 and settle on April 30.

HSBC Securities (USA) Inc. will be the agent.

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