HSBC plans to sell knock-out buffer notes linked to gold via JPMorgan

By E. Janene Geiss

Philadelphia, Sept. 23 - HSBC USA Inc. plans to price 0% knock-out buffer notes due March 30, 2010 linked to the price of gold, according to an FWP filing with the Securities and Exchange Commission.

J.P. Morgan Securities Inc. is the agent.

A knock-out event will occur if the price of gold falls by more than the buffer amount of 13% during the life of the notes.

If a knock-out event occurs, the payout at maturity will be par plus the any return on the price of gold, subject to a maximum return of 15% to 22%. The exact cap will be set at pricing. Investors are exposed to any losses.

If a knock-out event does not occur, the payout will be par plus the return, with a floor of par plus the contingent minimum return of 5%.

The notes will price on Sept. 25 and settle on Sept. 30.

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