HSBC to issue 9.65% reverse convertibles linked to Chesapeake Energy

By Jennifer Chiou

New York, Dec. 6 - HSBC USA Inc. plans to price 9.65% reverse convertible notes due Dec. 24, 2008 linked to the common stock of Chesapeake Energy Corp., according to an FWP filing with the Securities and Exchange Commission.

Interest will be payable monthly.

At maturity, investors will receive par unless Chesapeake Energy stock falls below the protection price - 80% of the initial share price - during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Chesapeake Energy shares equal to $1,000 divided by the initial share price.

The notes are expected to price on Dec. 21 and settle on Dec. 27.

HSBC Securities (USA) Inc. will be the agent.

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