HSBC USA to price 15.5% reverse convertibles linked to four stocks

By Jennifer Chiou

New York, July 16 - HSBC USA Inc. plans to price 15.5% annualized reverse convertible notes due Oct. 17, 2007 linked to an equally weighted basket of stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket will include the common stocks of IntercontinentalExchange, Inc., InterOil Corp., Crocs, Inc. and Taser International, Inc.

Interest will be payable monthly.

For each component stock, the payout at maturity will be $250.00 unless that stock falls below its barrier price - 75% of its initial share price - during the life of the notes and finishes below its initial share price, in which case the payout for that component stock will be a number of its shares equal to $250.00 divided by the initial share price or, at HSBC USA's option, the equivalent cash value.

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

The notes are expected to price on July 17 and settle on July 20.

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

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