Goldman Sachs plans variable coupon CDs due 2020 tied to 10 stocks

By Marisa Wong

Madison, Wis., Aug. 1 - Goldman Sachs Bank USA plans to price variable coupon certificates of deposit due Aug. 28, 2020 linked to a basket of common stocks, according to a term sheet.

The equally weighted basket includes Apple Inc., Cisco Systems, Inc., Freeport-McMoRan Copper & Gold Inc., Kimberly-Clark Corp., McDonald's Corp., Merck & Co., Inc., Proctor & Gamble Co., Target Corp., Walgreen 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 interest rate of 1%.

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 its return and negative 20%. The maximum stock return is expected to be 6% to 6.5% and will be set at pricing.

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

The CDs are expected to price Aug. 27 and settle Aug. 30.

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

The Cusip number is 38147JKF8.

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