Published on 5/30/2008 in the Prospect News Structured Products Daily.
New Issue: HSBC USA prices $445,000 20.4% worst of reverse convertibles linked to May Dogs of Dow
By E. Janene Geiss
Philadelphia, May 30 - HSBC USA Inc. priced $445,000 of worst-of reverse convertible notes due Dec. 1, 2008 linked to the common stocks of the May 2008 Dogs of the Dow.
The "dog" stocks include 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., E.I. DuPont De Nemours and Co., according to a 424B2 filing with the Securities and Exchange Commission.
The six-month notes will pay 10.2% for an annualized coupon of 20.4%. Interest is payable monthly.
If any of the 10 stocks falls below its barrier price - 60% 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 (Symbol: BAC), Citigroup (Symbol: C), AT&T (Symbol: T), Pfizer (Symbol: PFE), JPMorgan (Symbol: JPM), Merck (Symbol: MRK), General Electric (Symbol: GE), Verizon (Symbol: VZ), General Motors (Symbol: GM) and E.I. DuPont (Symbol: DD)
|
| Amount: | $445,000
|
| Maturity: | Dec. 1, 2008
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| Coupon: | 20.4%, 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: | $34.17 for Bank of America, $21.66 for Citigroup, $38.83 for AT&T, $19.33 for Pfizer, $43.01 for JPMorgan, $38.62 for Merck, $30.40 for General Electric, $37.38 for Verizon, $17.42 for General Motors and $47.00 for E.I. DuPont
|
| Barrier prices: | For each stock, 60% of its initial price
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| Exchange ratios: | 29.2654 for Bank of America, 46.1681 for Citigroup, 25.7533 for AT&T, 51.7331 for Pfizer, 23.2504 for JPMorgan, 25.8933 for Merck, 32.8947 for General Electric, 26.7523 for Verizon, 57.4053 for General Motors and 21.2766 for E.I. DuPont
|
| Pricing date: | May 27
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| Settlement date: | May 30
|
| Agent: | HSBC Securities (USA) Inc.
|
| Fees: | 2.25%
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