SunTrust Bank plans CDs linked to S&P 500

By Angela McDaniels

Tacoma, Wash., April 1 - SunTrust Bank plans to price 0% certificates of deposit due April 18, 2013 linked to the S&P 500 index, according to a term sheet.

The payout at maturity will be 103% of par plus the indexed amount, which will equal the sum of the index returns in each of the four annual observation periods making up the life of the CDs.

The return in each period will be capped at 9% to 12%, with the exact cap to be set at pricing, and may be negative. If the sum of the periodic returns is negative, the indexed amount will be zero.

Beginning March 15, 2010, the CDs will be putable on quarterly early redemption dates. 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 April 16 and settle April 22.

Incapital LLC is the distributor.

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