HSBC plans enhanced market participation notes linked to Financial Select Sector SPDR

By Angela McDaniels

Tacoma, Wash., May 7 - HSBC USA Inc. plans to price 0% enhanced market participation notes with contingent protection due Sept. 3, 2010 linked to the Financial Select Sector SPDR fund, according to an FWP filing with the Securities and Exchange Commission.

The payout at maturity will be par plus double any gain in the fund's share price, subject to a maximum return that is expected to be 50%. The exact cap will be set at pricing.

Investors will receive par if the fund declines by 40% or less and will receive par plus the fund return if it declines by more than 40%.

The notes are expected to price May 12 and settle May 15.

HSBC Securities (USA) Inc. is the agent.

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