New Issue: HSBC prices $18.82 million knock-out buffer notes linked to S&P 500

By Angela McDaniels

Tacoma, Wash., May 22 - HSBC USA Inc. priced $18.82 million of 0% knock-out buffer notes due June 5, 2013 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

A knock-out event occurs if the index's closing level is less than the initial index level by more than 23.5% on any day during the life of the notes.

If a knock-out event does not occur, the payout at maturity will be par plus the greater of the index return and 5%. If a knock-out event occurs, the payout will be par plus the index return. In either case, the return will be subject to a 15% cap.

HSBC Securities (USA) Inc. is the underwriter with J.P. Morgan Securities LLC as dealer.

Issuer:	HSBC USA Inc.
Issue:	Knock-out buffer notes
Underlying index:	S&P 500
Amount:	$18,818,000
Maturity:	June 5, 2013
Coupon:	0%
Price:	Par
Payout at maturity:	If knock-out event does not occur, par plus greater of index return and 5%; if knock-out event occurs, par plus index return; in either case, return is subject to 15% cap
Knock-out event:	Index's closing level is less than initial index level by more than 23.5% on any day during life of notes
Initial index level:	1,295.22
Pricing date:	May 18
Settlement date:	May 23
Underwriter:	HSBC Securities (USA) Inc.
Dealer:	J.P. Morgan Securities LLC as agent
Fees:	1%
Cusip:	4042K1N33

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