HSBC plans to price one-year Stars linked to S&P 500 index

By Toni Weeks

San Diego, Feb. 29 - HSBC USA Inc. plans to price 0% Strategic Accelerated Redemption Securities due March 2013 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index closes at or above its initial level on one of three observation dates, the notes will be called at par of $10 plus an annualized call premium of 7% to 11%. The observation dates will be in September 2012, December 2012 and March 2013.

If the notes are not called and the final index value is at least 95% of the initial value, the payout at maturity will be par. Investors will be exposed to losses beyond the 5% buffer.

The notes are expected to price and settle in March.

Bank of America Merrill Lynch is the underwriter.

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