HSBC to issue 15% reverse convertibles linked to stock basket

By Laura Lutz

Des Moines, June 4 - HSBC USA Inc. plans to price an issue of 15% reverse convertible notes due Dec. 31, 2007 linked to a basket of five stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket will consist of equal weights of the common stocks of Elan Corp.; Evergreen Solar, Inc.; InterOil Corp.; Take-Two Interactive Software, Inc.; and Zoltek Cos., Inc.

Interest will be payable at maturity.

For each component stock, investors will receive 20% of par unless that stock falls below its protection price - 70% of its initial price - during the life of the notes and finishes below its initial price, in which case the payout for the component will be equal to 20% of par times the performance of that stock.

The total payout at maturity will be equal to the sum of the payouts for the components.

The notes were expected to price on June 20 and settle on June 25.

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

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