New Issue: HSBC prices $1.04 million 11.75% reverse convertibles linked to Valero Energy

By Jennifer Chiou

New York, May 30 - HSBC USA Inc. priced $1.04 million of 11.75% annualized reverse convertible notes due Dec. 1, 2008 linked to Valero Energy Corp. stock, according to a 424B2 filing with the Securities and Exchange Commission.

Payout at maturity will be par in cash unless Valero Energy stock falls below the protection price of $35.6025, 75% of the initial price of $47.47, during the life of the notes and finishes below the initial price in which case the payout will be Valero Energy shares equal to $1,000 principal amount divided by the initial price.

HSBC Securities (USA) Inc. is the agent.

Issuer:	HSBC USA Inc.
Issue:	Reverse convertible notes
Underlying stock:	Valero Energy Corp. (Symbol: VLO)
Amount:	$1,035,000
Maturity:	Dec. 1, 2008
Coupon:	11.75%, payable monthly
Price:	Par
Payout at maturity:	Par in cash unless Valero Energy stock falls below the protection price of $35.6025, 75% of the initial price, and finishes below the initial price, in which case Valero Energy shares equal to $1,000 principal amount divided by the initial price
Initial price:	$47.47
Protection price:	$35.6025, 75% of $47.47
Pricing date:	May 27
Settlement date:	May 30
Agent:	HSBC Securities (USA) Inc.
Fees:	2.25%

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