HSBC to price 20.4% knock-in reverse convertibles linked to Dogs of the Dow

By Laura Lutz

Des Moines, May 7 - HSBC USA Inc. plans to price 20.4% annualized knock-in reverse convertible securities due Dec. 1, 2008 linked to a basket consisting of the May 2008 Dogs of the Dow stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the common stocks of Bank of America Corp.; Citigroup Inc.; AT&T Inc.; Pfizer Inc.; JPMorgan Chase & Co.; Merck & Co., Inc.; General Electric Co.; Verizon Communications Inc.; General Motors Corp.; and E. I. du Pont de Nemours and Co.

Interest will be payable monthly.

The total payout at maturity will be the sum of the payouts for the 10 components.

For each component stock, investors will receive 10% of par unless that stock falls below its knock-in price, 60% of its initial price, during the life of the notes and finishes below the initial price. If such a knock-in event occurs, the payout for that component will be 10% of par times the performance of that stock.

The securities are expected to price on May 27 and settle on May 30.

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

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