New Issue: HSBC USA sells $481,000 15.25% notes linked to Arch

By Laura Lutz

Washington, Nov. 28 - HSBC USA Inc. priced a $481,000 issue of 15.25% reverse convertible notes due Nov. 30, 2007 linked to Arch Coal, Inc. stock, according to a 424B2 filing with the Securities and Exchange Commission.

The payout at maturity will be par in cash unless Arch stock falls below the barrier price of $27.29 during the life of the notes and finishes below its initial price, in which case payout will be a number of Arch shares equal to $1,000 divided by the initial share price.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Arch Coal, Inc.
Amount:	$481,000
Maturity:	Nov. 30, 2007
Coupon:	15.25%, paid quarterly
Price:	Par
Payout at maturity:	Par in cash unless Arch stock falls below $27.29 during the life of the notes and finishes below its initial price, in which case 26.3169 shares of Arch stock
Initial share price:	$34.11
Barrier price:	$27.29, 80% of initial share price
Pricing date:	Nov. 27
Settlement date:	Nov. 30
Agent:	HSBC Securities (USA) Inc.
Agent fee:	2.25%

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