Published on 4/29/2008 in the Prospect News Structured Products Daily.
New Issue: HSBC USA sells $569,000 25% reverse convertibles linked to 'Dogs of the Dow'
By Susanna Moon
Chicago, April 29 - HSBC USA Inc. priced $569,000 worst of reverse convertible notes due Oct. 30, 2008 linked to the March 2008 "Dogs of the Dow" stock basket, according to an FWP filing with the Securities and Exchange Commission.
The six-month notes will pay 12.5% for an annualized coupon of 25%. Interest is payable monthly.
Underlying securities are the common stocks of AT&T Inc., Bank of America Corp., Citigroup Inc., E.I. du Pont de Nemours and Co., General Electric Co., General Motors Corp., JPMorgan Chase & Co., Merck & Co., Inc., Pfizer Inc. and Verizon Communications Inc.
Payout at maturity will be par unless any stock included in the basket falls by more than 50% during the life of the notes and any stock finishes below its initial price, in which case the payout will be a number of shares of the worst-performing stock equal to $1,000 divided by the initial price of that stock.
HSBC Securities (USA) Inc. is the agent.
| Issuer: | HSBC USA Inc.
|
| Issue: | Worst of reverse convertible notes
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| Underlying stocks: | AT&T Inc. (NYSE: T), Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), E.I. du Pont de Nemours and Co. (NYSE: DD), General Electric Co. (NYSE: GE), General Motors Corp. (NYSE: GM), JPMorgan Chase & Co. (NYSE: JPM), Merck & Co., Inc. (NYSE: MRK), Pfizer Inc. (NYSE: PFE) and Verizon Communications Inc. (NYSE: VZ)
|
| Amount: | $569,000
|
| Maturity: | Oct. 30, 2008
|
| Coupon: | 25%, payable monthly
|
| Price: | Par
|
| Payout at maturity: | Par unless any stock falls below its protection price during the life of the notes and any stock finishes below its initial price; in that case, a number of the worst-performing shares equal to $1,000 divided by its initial price
|
| Initial prices: | $38.58 for AT&T, $38.30 for Bank of America, $26.60 for Citigroup, $49.88 for DuPont, $33.33 for GE, $21.38 for GM, $47.79 for JPMorgan, $40.72 for Merck, $20.43 for Pfizer and $37.04 for Verizon
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| Protection prices: | $19.29 for AT&T, $19.15 for Bank of America, $13.30 for Citigroup, $24.94 for DuPont, $16.665 for GE, $10.69 for GM, $23.895 for JPMorgan, $20.36 for Merck, $10.215 for Pfizer and $18.52 for Verizon; or 50% of initial prices
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| Pricing date: | April 25
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| Settlement date: | April 30
|
| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 1.36%
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