By Laura Lutz
Des Moines, Nov. 14 - HSBC USA Inc. priced $1.08 million of 17% reverse convertible notes due May 16, 2008 linked to a basket of five common stocks, according to a 424B2 filing with the Securities and Exchange Commission.
The basket consists of equal weights of the common stocks of Ambac Financial Group, Inc.; Citigroup Inc.; Coach, Inc.; Zions Bancorp.; and Smith & Wesson Holding Corp.
For each component stock that falls below its barrier price - 60% of its initial price - during the life of the notes and finishes below its initial price, investors will receive a number of shares of that stock equal to 20% of par divided by the initial price of that stock.
For each component stock that stays at or above its barrier price or finishes at or above its initial price, investors will receive 20% of par in cash.
HSBC Securities (USA) Inc. will be the agent.
| Issuer: | HSBC USA Inc.
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| Issue: | Reverse convertible notes
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| Underlying basket: | Equal weights of common stocks of Ambac Financial Group, Inc. (Symbol: ABK); Citigroup Inc. (Symbol: C); Coach, Inc. (Symbol: COH); Zions Bancorp. (Symbol: ZION); and Smith & Wesson Holding Corp. (Symbol: SWHC)
|
| Amount: | $1.08 million
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| Maturity: | May 16, 2008
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| Coupon: | 17% annualized
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| Price: | Par
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| Payout at maturity: | For each component stock that falls below its barrier price and finishes below its initial price, a number of shares of that stock equal to 20% of par divided by initial price; for each component stock that stays above barrier price or finishes above initial price, 20% of par in cash
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| Initial levels: | $29.04 for Ambac; $35.90 for Citigroup; $35.94 for Coach; $56.61 for Zions; $11.09 for Smith & Wesson
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| Barrier levels: | $17.424 for Ambac; $21.54 for Citigroup; $21.564 for Coach; $33.966 for Zions; $6.654 for Smith & Wesson; 60% of initial levels
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| Pricing date: | Nov. 13
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| Settlement date: | Nov. 16
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| Agent: | HSBC Securities (USA) Inc.
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| Fees: | 2% (maximum)
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