New Issue: HSBC prices $988,000 13.25% reverse convertibles linked to XM Satellite Radio

By Angela McDaniels

Seattle, Jan. 30 - HSBC USA Inc. priced a $988,000 issue of reverse convertible notes due April 30, 2007 linked to the common stock of XM Satellite Radio Holdings Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The three-month notes will pay 3.3125% for an annualized rate of 13.25%. Interest will be payable monthly.

The payout at maturity will be par unless XM stock falls below the barrier price of $10.63 during the life of the notes and finishes below the initial share price of $14.17, in which case the payout will be a number of XM shares equal to $1,000 divided by the initial share price.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	XM Satellite Radio Holdings Inc.
Amount:	$988,000
Maturity:	April 30, 2007
Coupon:	13.25%, payable monthly
Price:	Par
Payout at maturity:	Par if XM stock remains at or above the barrier price during the life of the notes or finishes at or above the initial share price; otherwise, 70.57163 XM shares
Initial share price:	$14.17
Barrier price:	$10.63, 75% of initial share price
Pricing date:	Jan. 26
Settlement date:	Jan. 31
Agent:	HSBC Securities (USA) Inc.
Agent fees:	2.25%

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