HSBC to price knock-out buffer notes linked to Brazilian real

By Angela McDaniels

Tacoma, Wash., April 25 - HSBC USA Inc. plans to price 0% knock-out buffer notes due May 10, 2013 linked to the performance of the Brazilian real relative to the dollar, according to an FWP filing with the Securities and Exchange Commission.

A knock-out event occurs if the real has depreciated on May 3, 2013 by more than 20% as compared to the initial spot rate.

If a knock-out event occurs, investors will be fully exposed to the depreciation of the real. If a knock-out event does not occur, the payout at maturity will be par plus the greater of the currency return and the contingent minimum return, which is expected to be at least 8.25% and will be set at pricing.

The currency return is the quotient of (a) the initial spot rate minus the final spot rate divided by (b) the initial spot rate.

The notes (Cusip: 4042K1K28) will price April 26 and settle May 3.

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

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