HSBC plans phoenix quarterly review notes due 2013 tied to Caterpillar

By Susanna Moon

Chicago, May 31 - HSBC USA Inc. plans to price phoenix quarterly review notes due June 19, 2013 linked to Caterpillar Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.

If Caterpillar stock closes at or above the 75% trigger level on a quarterly observation date, the issuer will pay a contingent coupon of 18% annualized for that quarter.

If the shares close at or above the initial price on any quarterly observation date, the notes will be called at par of $10 plus the contingent coupon.

If the notes are not called and Caterpillar shares finish at or above the trigger price, the payout at maturity will be par plus the contingent coupon.

Otherwise, investors will be fully exposed to any losses.

HSBC Securities (USA) Inc. is the underwriter, and J.P. Morgan Securities LLC is the distributor.

The notes will price on June 1 and settle on June 6.

The Cusip number is 4042K1R70.

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