Published on 6/27/2008 in the Prospect News Structured Products Daily.
New Issue: HSBC USA sells $678,000 20% reverse convertibles linked to 'Dogs of the Dow'
By E. Janene Geiss
Philadelphia, June 27 - HSBC USA Inc. priced $678,000 worst of reverse convertible notes due Dec. 30, 2008 linked to the June 2008 "Dogs of the Dow" stock basket, according to an FWP filing with the Securities and Exchange Commission.
The six-month notes will pay 10% for an annualized coupon of 20%. Interest is payable monthly.
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.
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
|
| Underlying stocks: | Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), AT&T Inc. (NYSE: T), Pfizer Inc. (NYSE: PFE), JPMorgan Chase & Co. (NYSE: JPM), Merck & Co., Inc. (NYSE: MRK), General Electric Co. (NYSE: GE), Verizon Communications Inc. (NYSE: VZ), General Motors Corp. (NYSE: GM), E.I. du Pont de Nemours and Co. (NYSE: DD)
|
| Amount: | $678,000
|
| Maturity: | Dec. 30, 2008
|
| Coupon: | 20%, 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: | $26.61 for Bank of America, $9.4250 for Citigroup, $17.2350 for AT&T, $17.88 for Pfizer, $37.91 for JPMorgan, $36.98 for Merck, $27.99 for General Electric, $35.59 for Verizon, $12.81 for General Motors and $44.11 for E. I. du Pont de Nemours
|
| Protection prices: | $37.5799 for Bank of America, $18.85 for Citigroup Inc., $34.47 for AT&T Inc., $8.9400 for Pfizer, $18.955 for JPMorgan, $18.49 for Merck, $13.995 for General Electric, $17.795 for Verizon, $6.405 for General Motors and $22.055 for E. I. du Pont de Nemours
|
| Pricing date: | June 25
|
| Settlement date: | June 30
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 2.5%
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