New Issue: HSBC USA prices $1.02 million 10.25% reverse convertibles linked to Valero Energy

By Angela McDaniels

Tacoma, Wash., April 21 - HSBC USA Inc. priced $1.02 million of 10.25% reverse convertible notes due April 22, 2009 linked to the common stock of Valero Energy Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The payout at maturity will be par unless Valero Energy shares fall by more than 40% during the life of the notes and the final share price is less than the initial share price, in which case the payout will be a number of Valero Energy shares equal to $1,000 divided by the initial share price.

HSBC Securities (USA) Inc. is the agent.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Valero Energy Corp. (Symbol: VLO)
Amount:	$1,015,000
Maturity:	April 22, 2009
Coupon:	10.25%, payable monthly
Price:	Par
Payout at maturity:	If Valero Energy stock falls below the barrier price during the life of the notes and finishes below the initial share price, 18.9394 Valero Energy shares; otherwise, par
Initial share price:	$52.80
Barrier price:	$31.68, 60% of initial share price
Pricing date:	April 17
Settlement date:	April 22
Agent:	HSBC Securities (USA) Inc.
Fees:	2%

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