HSBC to issue 13.5% reverse convertibles linked to Cisco

By Jennifer Chiou

New York, Nov. 27 - HSBC USA Inc. plans to price 13.5% annualized reverse convertible notes due June 12, 2008 linked to the common stock of Cisco Systems, Inc., according to an FWP filing with the Securities and Exchange Commission.

Interest will be payable monthly.

At maturity, investors will receive par unless Cisco Systems 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 Cisco Systems shares equal to $1,000 divided by the initial share price.

The notes are expected to price on Dec. 7 and settle on Dec. 12.

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

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