Published on 4/22/2008 in the Prospect News Structured Products Daily.
New Issue: HSBC USA prices $500,000 18% worst of reverse convertibles linked to financial stock basket
By Angela McDaniels
Tacoma, Wash., April 22 - HSBC USA Inc. priced $500,000 of worst of reverse convertible notes due Oct. 23, 2008 linked to the common stocks of Bank of America Corp., Citigroup Inc., Goldman Sachs Group, Inc. and Merrill Lynch & Co., Inc., according to a 424B2 filing with the Securities and Exchange Commission.
The six-month notes will pay 9% for an annualized coupon of 18%. Interest is payable monthly.
If any of the four stocks falls below its barrier price - 55% of its initial price - during the life of the notes and the worst-performing stock finishes below its initial price, the payout at maturity will be number of shares of the worst-performing stock equal to $1,000 divided by the initial price of that stock. Otherwise, the payout will be par.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Worst of reverse convertible notes
|
| Underlying stocks: | Bank of America Corp. (Symbol: BAC), Citigroup Inc. (Symbol: C), Goldman Sachs Group, Inc. (Symbol: GS) and Merrill Lynch & Co., Inc. (Symbol: MER)
|
| Amount: | $500,000
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| Maturity: | Oct. 23, 2008
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| Coupon: | 18%, payable monthly
|
| Price: | Par
|
| Payout at maturity: | If any stock falls below its barrier price during the life of the notes and the worst-performing stock finishes below its initial price, a number of shares of the worst-performing stock equal to its exchange ratio; otherwise, par
|
| Initial share prices: | $38.56 for Bank of America; $25.11 for Citigroup; $179.93 for Goldman Sachs; $47.35 for Merrill Lynch
|
| Barrier prices: | For each stock, 55% of its initial price
|
| Exchange ratios: | 25.9336 for Bank of America; 39.8248 for Citigroup; 5.5577 for Goldman Sachs; 21.1193 for Merrill Lynch
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| Pricing date: | April 18
|
| Settlement date: | April 23
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 2.7%
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