HSBC to price coupon-bearing notes linked to Valero via Merrill

By Marisa Wong

Madison, Wis., June 29 - HSBC USA Inc. plans to price coupon-bearing notes due July 2013 linked to the common stock of Valero Energy Corp., according to an FWP filing with the Securities and Exchange Commission.

Interest is payable quarterly at the rate of 10% per year.

If the ending price of Valero stock finishes at or above the threshold value - 89% to 93% of the initial price - the payout at maturity will be par of $10. The exact threshold value will be set at pricing.

Investors will share in losses beyond the 7% to 11% decline.

The notes are expected to price and settle in July.

Bank of America Merrill Lynch is the underwriter.

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