HSBC plans to sell knock-out buffer notes tied to price of palladium

By Marisa Wong

Madison, Wis., April 18 - HSBC USA Inc. plans to price 0% knock-out buffer notes due May 3, 2012 linked to the price of palladium, according to an FWP filing with the Securities and Exchange Commission.

If palladium declines by more than 20% during the life of the notes, the payout at maturity will be par plus the palladium return, which could be positive or negative. Otherwise, the payout will be par plus the greater of the palladium return and 7.25%.

In either case, the payout will be subject to a maximum return of 20%.

The notes (Cusip: 4042K1GM9) will price on April 26 and settle on April 29.

J.P. Morgan Securities LLC is the agent.

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