JPMorgan plans callable interest rate spread CDs linked to CMS rates

By Toni Weeks

San Luis Obispo, Calif., Aug. 6 – JPMorgan Chase Bank, NA plans to price callable interest rate spread certificates of deposit due Aug. 20, 2034 linked to the 10-year Constant Maturity Swap Rate and the two-year CMS rate, according to a term sheet.

The interest rate will be 9% for the first year. After that, it will be 4 times the spread of the 10-year CMS rate minus the two-year CMS rate, subject to a minimum interest rate of zero and a maximum coupon of 10% per year. Interest will be payable quarterly.

The payout at maturity will be par.

Beginning Aug. 20, 2015, the CDs will be callable at par on any interest payment date.

The CDs (Cusip: 48125TVP7) are expected to price Aug. 15 and settle Aug. 20.

J.P. Morgan Securities LLC is the agent. Incapital LLC is the distributor.

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