A new type of mortgage bond is helping HSBC Securities build its name on Wall Street. The company is offering agency debentures whose principal payments are linked to prepayment rates-the latest twist on the standard security that passes along income from a diversified basket of mortgage loans.

HSBC Securities, a New York unit of HSBC Holdings PLC, which also owns Marine Midland Bank, is among a handful of firms offering the new mortgage products, known as Agency Mortgage-Indexed Principal Redemption Bonds. They are billed as potentially less volatile because of their tie to the relatively consistent prepayment rates of specific security pools, like 8% coupons issued by Freddie Mac in 1995.

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