New Issue: HSBC prices $40.59 million Stars due 2013 linked to S&P 500 index

By Marisa Wong

Madison, Wis., May 29 - HSBC USA Inc. priced $40.59 million of 0% Strategic Accelerated Redemption Securities due June 10, 2013 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch is the underwriter.

If the index closes at or above the initial index level on any of three observation dates, the notes will be automatically called and investors will receive par of $10 plus an annualized call premium of 11.8%. The observation dates are Nov. 27, Feb. 19, 2013 and June 3, 2013.

If the notes are not called, the payout at maturity will be par if the final index level is at least 95% of the initial level. Otherwise, investors will lose 1% for every 1% that the index declines beyond 5%.

Issuer:	HSBC USA Inc.
Issue:	Strategic Accelerated Redemption Securities
Underlying index:	S&P 500
Amount:	$40,592,320
Maturity:	June 10, 2013
Coupon:	0%
Price:	Par of $10.00
Payout at maturity:	If final index level is at least 95% of initial level, par; otherwise, 1% loss for every 1% index decline beyond 5%
Call:	Automatically if index closes at or above initial index level on an observation date; payout will be $10.59 if notes are called on Nov. 27, $10.885 if called on Feb. 19, 2013 or $11.18 if called on June 3, 2013
Initial index level:	1,320.68
Threshold value:	1,254.65, 95% of initial level
Pricing date:	May 24
Settlement date:	June 1
Underwriters:	Bank of America Merrill Lynch
Fees:	1.25%
Cusip:	40433M849

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