HSBC plans to price 14% reverse convertibles linked to Blackstone Group

By E. Janene Geiss

Philadelphia, Aug. 31 - HSBC USA Inc. plans to price 14% reverse convertible notes due March 2008 linked to The Blackstone Group LP stock, according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 7% for an annualized rate of 14%. The notes are expected to mature three days after the final valuation date, slated for March 7, 2008. They will price Sept. 7 and settle Sept. 12. Interest will be payable monthly.

The payout at maturity, in addition to interest, will be par in cash if Blackstone stock stays at or above the protection price, 65% of the initial share price, during the life of the notes or finishes at or above the initial share price. Otherwise, the payout will be in Blackstone stock, with the number of shares equal to $1,000 divided by the initial share price.

HSBC Securities (USA) Inc. is the agent.

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