New Issue: HSBC sells $203,000 8.25% reverse convertibles linked to Capital One

By Laura Lutz

Des Moines, April 27 - HSBC USA Inc. priced $203,000 of 8.25% reverse convertible notes due July 30, 2007 linked to the common stock of Capital One Financial Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

At maturity, investors will receive par unless Capital One stock falls below the protection price - 90% 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 Capital One shares equal to $1,000 divided by the initial share price.

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

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Capital One Financial Corp.
Amount:	$203,000
Maturity:	July 30, 2007
Coupon:	8.25%, paid monthly
Price:	Par
Payout at maturity:	Par in cash unless Capital One stock falls below $66.56 during the life of the notes and finishes below its initial share price, in which case shares of Capital One equal to $1,000 divided by the initial share price
Initial share price:	$73.95
Protection price:	$66.56, 90% of $73.95
Pricing date:	April 25
Settlement date:	April 30
Agent:	HSBC Securities (USA) Inc.
Agent fee:	2%

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