HSBC plans to price knock-out buffer notes linked to price of gold

By Angela McDaniels

Tacoma, Wash., Oct. 4 - HSBC USA Inc. plans to price 0% knock-out buffer notes due Oct. 21, 2011 linked to the price of gold, according to an FWP filing with the Securities and Exchange Commission.

If gold declines by more than 20% during the life of the notes, the payout at maturity will be par plus the gold return, which could be positive or negative. Otherwise, the payout will be par plus the greater of the gold return and 5%.

In each case, the payout will be subject to a maximum return of 17.5%.

The notes (Cusip 4042K06X8) will price Oct. 8 and settle Oct. 15.

J.P. Morgan Securities LLC is the agent.

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