BofA to sell five-year variable coupon CDs tied to five commodities

By Marisa Wong

Madison, Wis., April 7 - Bank of America Corp. plans to price five-year variable coupon certificates of deposit linked to a basket of commodities, according to a term sheet.

The equally weighted basket includes the futures contracts of Brent crude oil, soybean and sugar and the spot prices of copper and gold.

The notes will pay a coupon in April of each year equal to the average of the basket components' performances, subject to a floor of 0%. If a basket component's return is zero or positive, its performance will be equal to the auto-cap. Otherwise, its performance will be equal to its return, subject to a floor of negative 20%. The auto-cap is expected to be 7% to 11% and will be set at pricing.

The payout at maturity will be par of $1,000.

The CDs (Cusip: 06051ACJ9) will price and settle in April.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the agent. Incapital LLC is the distributor.

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