New Issue: HSBC sells $446,000 of 11.5% reverse convertibles linked to Arch Coal

By Laura Lutz

Des Moines, April 27 - HSBC USA Inc. priced $446,000 of 11.5% reverse convertible notes due Oct. 30, 2007 linked to the common stock of Arch Coal, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

At maturity, investors will receive par unless Arch Coal 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 Arch Coal 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:	Arch Coal, Inc.
Amount:	$446,000
Maturity:	Oct. 30, 2007
Coupon:	11.5%, paid monthly
Price:	Par
Payout at maturity:	Par in cash unless Arch Coal stock falls below $29.92 during the life of the notes and finishes below its initial share price, in which case shares of Arch Coal equal to $1,000 divided by the initial share price
Initial share price:	$37.40
Protection price:	$29.92, 80% of $37.40
Pricing date:	April 25
Settlement date:	April 30
Agent:	HSBC Securities (USA) Inc.
Agent fee:	2.5%

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