HSBC plans buffered return enhanced notes tied to Asian indexes

By E. Janene Geiss

Philadelphia, Sept. 23 - HSBC USA Inc. plans to price 0% buffered return enhanced notes due Oct. 14, 2010 linked to a basket of indexes and their related currencies, according to an FWP filing with the Securities and Exchange Commission.

J.P. Morgan Securities Inc. is the agent.

The basket includes the Hang Seng China Enterprises index with a 33% weight, the MSCI Taiwan index with a 21% weight, the Korea Stock Price Index 200 with a 24% weight, the Hang Seng index with a 14% weight and the MSCI Singapore index with an 8% weight.

To determine the return for each index, the issuer will multiply its final return by the final return of the applicable currency - the Hong Kong dollar for the Hang Seng and Hang Seng China Enterprises, the Korean won for the Kospi 200, the Taiwan dollar for the MSCI Taiwan and the Singapore dollar for the MSCI Singapore - relative to the U.S. dollar.

The payout at maturity will be par plus double any basket gain, subject to a maximum return of 20.4%. Investors will receive par if the basket declines by 10% or less and will lose 1.1111% for every 1% that it declines beyond 10%.

The notes are expected to price Sept. 25 and settle Sept. 30.

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