HSBC plans barrier optimization securities linked to S&P 500 via UBS

By E. Janene Geiss

Philadelphia, March 19 - HSBC USA Inc. plans to price barrier optimization securities with partial protection due April 1, 2010 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

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

If the index never closes above its return barrier - 31% to 36% above the initial level - during the life of the notes, the payout at maturity will be par of $10 plus any gain on the index. The exact return barrier will be set at pricing.

If the index ever closes above the return barrier, the payout will be par plus a conditional coupon of 3%.

Investors will receive par if the index falls by up to 25% and will lose 1% for every 1% decline beyond 25%.

The notes are expected to price on March 26 and settle on March 31.

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