HSBC plans one-year callable Stars with 5% buffer linked to S&P 500

By Susanna Moon

Chicago, April 27 - HSBC USA Inc. plans to price 0% Strategic Accelerated Redemption Securities due June 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 any 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 are in November, February 2013 and May 2013, and the exact call premium will be set at pricing.

If the notes are not called, the payout at maturity will be par if the index falls by up to 5%, and investors will be exposed to losses beyond 5%.

Bank of America Merrill Lynch will be the agent.

The notes are expected to price in May and settle in June.

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