HSBC plans one-year Stars linked to S&P 500 index via Merrill

By Susanna Moon

Chicago, July 9 - HSBC USA Inc. plans to price 0% Strategic Accelerated Redemption Securities due August 2014 linked to S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

BofA Merrill Lynch is the agent.

The notes will be called at par of $10 plus a call premium of 8% to 12% per year if the basket closes at or above the initial level on any of three quarterly observation dates.

The payout at maturity will be par unless the index finishes below its initial level, in which case investors will be exposed to any losses.

The exact deal terms will be set at pricing.

The notes will price in July and settle in August.

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