HSBC to sell 16% worst-of reverse convertibles linked to August Dogs of Dow

By Susanna Moon

Chicago, Aug. 11 - HSBC USA Inc. plans to price 16% worst-of reverse convertible notes due Aug. 31, 2009 linked to the common stocks of the August Dogs of the Dow.

Underlying stocks are Bank of America Corp., Citigroup Inc., AT&T Inc., Pfizer Inc., JPMorgan Chase & Co., Merck & Co., Inc., General Electric Co., Verizon Communications Inc., Home Depot, Inc. and E.I. DuPont De Nemours and Co., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

If any of the stocks falls below its barrier price - 50% of its initial price - during the life of the notes and the worst performing stock finishes below its initial price, the payout at maturity will be number of shares of the worst performing stock equal to $1,000 divided by the initial price of that stock. Otherwise, the payout will be par.

The notes are expected to price on Aug. 26 and settle on Aug. 29.

HSBC Securities (USA) Inc. is the agent.

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