HSBC plans 10%-14% autocallable yield notes linked to metals funds

By E. Janene Geiss

Philadelphia, Feb. 2 - HSBC USA Inc. plans to price autocallable yield notes due Feb. 24, 2012 based on the performance of the Market Vectors Gold Miners exchange-traded fund and the SPDR S&P Metals & Mining exchange-traded fund, according to an FWP filing with the Securities and Exchange Commission.

The coupon will be 10% to 14%, payable quarterly, with the exact rate to be set at pricing.

The notes will be called at par plus accrued interest if the index funds close above their initial levels on any quarterly observation date.

A trigger event will occur if either index falls below the trigger level - 70% of its initial level - on any trading day.

If a trigger event does not occur or if a trigger event occurs but the index fund gains, the payout at maturity will be par.

If a trigger event occurs and the return of the least-performing index fund is negative, investors will share in those losses.

The notes (Cusip 4042K1CX9) will price on Feb. 18 and settle on Feb. 24.

HSBC Securities (USA) Inc. is the agent.

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