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Wells Fargo plans contingent annual interest CDs on commodity basket
By Toni Weeks
San Diego, Jan. 4 - Wells Fargo Bank, NA plans to price contingent annual interest market-linked Certificates of Deposit due Jan. 26, 2018 linked to a basket of eight commodities and two commodity indexes, according to a term sheet.
The equally weighted basket includes copper, corn, gasoline, nickel, palladium, soybeans, silver, sugar, the S&P GSCI Brent Crude Oil Index Excess Return and the S&P GSCI Livestock Index Excess Return.
In January of each year, the CDs will pay a coupon equal to the sum of the basket components' weighted returns, with a floor of zero. On any valuation date, if an individual component's performance has remained the same or appreciated, it will be given a fixed return of 6% to 9% that will be set at pricing. If a commodity's return has declined, its component return will equal the commodity return, subject to a floor of negative 20%.
The payout at maturity will be par.
The notes (Cusip: 949748M53) are expected to price Jan. 26 and settle Jan. 31.
The distributor is Incapital LLC.
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