Goldman Sachs plans contingent coupon CDs tied to basket of 10 stocks

By Toni Weeks

San Luis Obispo, Calif., Jan. 3 - Goldman Sachs Bank USA plans to price contingent coupon basket-linked certificates of deposit due Jan. 29, 2021 linked to a basket of common stocks, according to a term sheet.

The equally weighted basket includes Apple Inc., AbbVie Inc., Amazon.com, Inc., Cisco Systems, Inc., McDonald's Corp., Merck & Co., Inc., Microsoft Corp., PepsiCo, Inc., Proctor & Gamble Co. and Wal-Mart Stores, Inc.

The CDs will pay a coupon each year equal to the average of the basket stocks' performances, subject to a minimum of zero.

If a basket stock's return is zero or positive, its performance will be equal to the maximum stock return. If a basket stock's return is negative, its performance will be the greater of the stock return and negative 10%. The maximum stock return is expected to be 8% to 8.5% and will be set at pricing.

The payout at maturity will be par plus the final coupon, if any.

Goldman Sachs & Co. is the agent. Incapital LLC is distributor.

The CDs are expected to price Jan. 28 and settle Jan. 31.

The Cusip number is 38147JRK0.

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