HSBC plans one-year Stars tied to S&P 500 with 95% trigger via Merrill

By Susanna Moon

Chicago, Dec. 30 - HSBC USA Inc. plans to price 0% Strategic Accelerated Redemption Securities due February 2013 linked to the S&P 500 index, according to an FWP with the Securities and Exchange Commission.

The notes will be called at par of $10 plus an annualized call premium of 10% to 14% if the index closes at or above its initial level on any of the call dates, which will fall six, nine and 12 months after issuance. The exact call premium will be set at pricing.

If the notes are not called, the payout at maturity will be par for losses up to 5%.

Investors will share fully in losses if the index closes below 95% of the initial level.

Bank of America Merrill Lynch is the agent.

The notes will price in January and settle in February.

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