HSBC plans 8.5% STEP Income Securities tied to Schlumberger

By Jennifer Chiou

New York, May 10 - HSBC USA Inc. plans to price 8.5% STEP Income Securities due June 2013 linked to Schlumberger Ltd. shares, according to an FWP with the Securities and Exchange Commission.

Interest will be payable quarterly.

If Schlumberger stock finishes at or above the step level - 108.5% of the initial share price - the payout at maturity will be par of $10 plus the step payment of 1% to 5%. The exact step payment will be set at pricing.

Investors will be exposed to any decline.

The notes are expected to price in May and settle in June.

Bank of America Merrill Lynch is the agent.

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