HSBC to price Stars linked to S&P 500 index via BofA Merrill Lynch

By Angela McDaniels

Tacoma, Wash., July 11 - HSBC USA Inc. plans to price 0% Strategic Accelerated Redemption Securities due August 2014 linked to the 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 4% to 8% per year if the index closes at or above the initial index level on any observation date. The observation dates will occur roughly six, nine and 12 months after the pricing date. The exact call premium will be set at pricing.

The payout at maturity will be par unless the final index level is less than the initial index level by more than 5%. In that case, investors will lose 1% for every 1% that the index declines beyond 5%.

The notes are expected to price and settle in July.

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