New Issue: HSBC prices $2.5 million capped knock-out buffer notes on 11 stocks

By Marisa Wong

Madison, Wis., Jan. 30 - HSBC USA Inc. priced $2.5 million of 0% capped knock-out buffer notes due Feb. 7, 2013 linked to an equally weighted basket of common stocks, according to a 424B2 with the Securities and Exchange Commission.

The basket includes the common stocks of Allstate Corp., General Dynamics Corp., E. I. du Pont de Nemours and Co., Illinois Tool Works Inc., Newmont Mining Corp., Eaton Corp., Bank of New York Mellon Corp., Dow Chemical Co., Fifth Third Bancorp, MetLife, Inc. and Freeport-McMoRan Copper & Gold Inc.

A knock-out event occurs if the basket level on the final valuation date has fallen by more than 20% relative to the initial level.

If a knock-out event occurs, the payout at maturity will be par plus the basket return. Investors will be exposed to any losses.

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

In either case, the payout will be capped at 13.5%.

HSBC Securities (USA) Inc. is the underwriter with J.P. Morgan Securities LLC as placement agent.

Issuer:	HSBC USA Inc.
Issue:	Capped knock-out buffer notes
Underlying stocks:	Allstate Corp. (Symbol: ALL), General Dynamics Corp. (Symbol: GD), E. I. du Pont de Nemours and Co. (Symbol: DD), Illinois Tool Works Inc. (Symbol: ITW), Newmont Mining Corp. (Symbol: NEM), Eaton Corp. (Symbol: ETN), Bank of New York Mellon Corp. (Symbol: BK), Dow Chemical Co. (Symbol: DOW), Fifth Third Bancorp (Symbol: FITB), MetLife, Inc. (Symbol: MET) and Freeport-McMoRan Copper & Gold Inc. (Symbol: FCX)
Amount:	$2.5 million
Maturity:	Feb. 7, 2013
Coupon:	0%
Price:	Par
Payout at maturity:	If basket falls by more than 20%, par plus return with exposure to losses; otherwise, par plus return with floor of 5%; cap of 13.5%
Initial prices:	$29.15 for Allstate, $71.51 for General Dynamics, $50.94 for E. I. du Pont, $53.01 for Illinois Tool, $60.45 for Newmont, $48.93 for Eaton, $20.00 for BNY Mellon, $33.41 for Dow, $13.07 for Fifth Third, $34.50 for MetLife and $46.50 for Freeport-McMoRan
Pricing date:	Jan. 26
Settlement date:	Jan. 31
Agents:	HSBC Securities (USA) Inc.; J.P. Morgan Securities LLC (placement agent)
Fees:	1%
Cusip:	4042K1WH2

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