New Issue: HSBC prices $17.96 million gold participation notes with 25.75% cap

By Susanna Moon

Chicago, Oct. 18 - HSBC USA Inc. priced $17.96 million of 0% participation notes due Oct. 29, 2012 linked to the spot price of gold, according to a 424B2 filing with the Securities and Exchange Commission.

The payout at maturity will be par plus any gain in the price of gold, up to a maximum return of 25.75%. Investors will receive par if the price of gold falls by up to 25% and will be exposed in full to the decline if it falls by more than 25%.

HSBC Securities (USA) Inc. is the underwriter and J.P. Morgan Securities LLC is the agent.

Issuer:	HSBC USA Inc.
Issue:	Participation notes
Underlying asset:	Spot price of gold
Amount:	$17,961,000
Maturity date:	Oct. 29, 2012
Coupon:	0%
Price:	Par
Payout at maturity:	Par plus any gain in gold price, capped at 25.75%; par if price declines by 25% or less; full exposure to losses if price falls beyond 25%
Initial price:	$1,678
Pricing date:	Oct. 14
Settlement date:	Oct. 21
Agents:	HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC
Fees:	1%
Cusip:	4042K1QE6

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