New Issue: HSBC USA prices $1.959 million 17.75% reverse convertibles linked to Arch Coal

By Jennifer Chiou

New York, Sept. 26 - HSBC USA Inc. priced a $1.959 million issue of 17.75% reverse convertible notes due Dec. 29, 2006 linked to Arch Coal, Inc. stock, according to a 424B2 filing with the Securities and Exchange Commission.

Payout at maturity will be par in cash unless Arch Coal stock falls by 20% or more during the life of the notes and finishes below its initial price on the valuation day, Dec. 26, 2006, in which case payout will be a number of Arch Coal shares equal to $1,000 divided by the initial share price.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Arch Coal, Inc.
Amount:	$1.959 million
Maturity:	Dec. 29, 2006
Coupon:	17.75%, paid monthly
Price:	Par
Payout at maturity:	Par in cash unless Arch Coal falls below $21.96 during the life of the notes and finishes below its initial price; in which case, $1,000 divided by the initial share price of Arch Coal stock
Initial share price:	$27.45
Barrier price:	$21.96, 80% of initial share price
Pricing date:	Sept. 25
Settlement date:	Sept. 29
Agent:	HSBC Securities (USA) Inc.

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