New Issue: HSBC prices $125,000 auto-callable notes linked to S&P 500

By Angela McDaniels

Tacoma, Wash., Dec. 26 - HSBC USA Inc. priced $125,000 of 0% auto-callable notes due Jan. 5, 2011 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at increasing premiums if the index level is greater than or equal to its initial level on any of three call dates. The payout will be par plus 10% if the notes are called on Dec. 29, 2008, par plus 20% if called on Dec. 30, 2009 and par plus 30% if called on Dec. 31, 2010.

The payout at maturity will be par unless the final index level is more than 10% below the initial index level, in which case investors will lose 1% for each 1% decline beyond 10%.

HSBC Securities (USA) Inc. is the agent.

Issuer:	HSBC USA Inc.
Issue:	Auto-callable notes
Underlying index:	S&P 500
Amount:	$125,000
Maturity:	Jan. 5, 2011
Coupon:	0%
Price:	Par
Payout at maturity:	If final index level is at least 90% of initial index level, par; otherwise, 1% loss for each 1% index decline beyond 10%
Call:	Called if index level is at or above its initial level on a call date; payout will be par plus 10% if called on Dec. 29, 2008, par plus 20% if called on Dec. 30, 2009 and par plus 30% if called on Dec. 31, 2010
Initial index level:	1,484.46
Pricing date:	Dec. 21
Settlement date:	Dec. 27
Agent:	HSBC Securities (USA) Inc.
Fees:	2.5%

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