HSBC plans barrier optimization securities linked to iShares MSCI EAFE index fund via UBS

By E. Janene Geiss

Philadelphia, Jan. 7 - HSBC USA Inc. plans to price barrier optimization securities with partial protection due Feb. 3, 2010 linked to the MSCI EAFE index fund, according to an FWP filing with the Securities and Exchange Commission.

UBS Financial Services Inc. and HSBC USA Inc. are the underwriters.

If the price of the fund ever closes above the return barrier, the payout will be par plus a conditional coupon of 3%. The return barrier will be 35% to 40% above the initial price level. The exact barrier will be set at pricing.

If the fund price never closes above the return barrier during the life of the notes, the payout at maturity will be par of $10 plus any return on the fund price. Investors will receive par if the share price stays the same or declines by less than 25% and lose 1% for every 1% the index declines beyond 25%.

The notes are expected to price on Jan. 27 and settle on Jan. 30.

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