HSBC USA plans issue of 14% reverse convertibles linked to Western Digital

By Jennifer Chiou

New York, Sept. 12 - HSBC USA Inc. plans to price an issue of 14% reverse convertible notes due Sept. 28, 2007 linked to Western Digital Corp. stock, according to an FWP filing with the Securities and Exchange Commission.

Interest will be paid monthly.

The notes will price on Sept. 26 and settle on Sept. 29.

Payout at maturity will be determined according to the performance of Western Digital stock:

• If the stock trades at or below the knock-in price and closes below the initial price, investors will receive a number of Western Digital shares equal to $1,000 divided by the initial stock price. The knock-in price will be 80% of the initial price.

• Otherwise, investors will receive par in cash.

HSBC Securities (USA) Inc. is the agent for the deal.

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