New Issue: HSBC USA prices $332,000 9.5% reverse convertibles linked to Valero

By Angela McDaniels

Seattle, Sept. 24 - HSBC USA Inc. priced $332,000 of 9.5% reverse convertible notes due March 27, 2008 linked to the common stock of Valero Energy Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The payout at maturity will be par unless Valero stock falls by more than 25% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Valero shares equal to $1,000 divided by the initial share price.

HSBC Securities (USA) Inc. is the agent.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Valero Energy Corp. (Symbol: VLO)
Amount:	$332,000
Maturity:	March 27, 2008
Coupon:	9.5%, payable monthly
Price:	Par
Payout at maturity:	If Valero stock falls below the barrier price during the life of the notes and the final share price is less than the initial share price, 14.0746 Valero shares; otherwise, par
Initial share price:	$71.05
Barrier price:	$53.2875, 75% of initial share price
Pricing date:	Sept. 21
Settlement date:	Sept. 26
Agent:	HSBC Securities (USA) Inc.
Fees:	2%

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