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SunTrust Bank plans to price certificates of deposit linked to S&P 500
By Angela McDaniels
Tacoma, Wash., Oct. 29 - SunTrust Bank plans to price certificates of deposit due Nov. 25, 2014 linked to the S&P 500 index, according to a term sheet.
Interest is payable quarterly. The CDs will pay a fixed coupon of 3.5% per year for the first two years. After that time, if the index closes at or above its initial level on a quarterly observation date, the CDs will pay a contingent coupon for that interest period. Otherwise, no coupon will be paid.
The contingent coupon is expected to be at least 5% per year and will be set at pricing.
The payout at maturity will be par.
Beginning Dec. 15, 2010, the CDs will be putable on March 15, June 15, Sept. 15 and Dec. 15 of each year. The redemption amount will be calculated differently than the payout at maturity, will include an early withdrawal penalty and may be less than par.
The CDs will price Nov. 19 and settle Nov. 24.
Incapital LLC is the distributor.
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