Wachovia to price 3.5% strategic access securities linked to two stock baskets

By Jennifer Chiou

New York, July 11 - Wachovia Corp. plans to price an issue of 3.5% strategic access securities due Sept. 1, 2009 linked to two baskets of 20 equally weighted stocks, according to a 424B5 filing with the Securities and Exchange Commission.

Interest will be payable quarterly.

The payout on exchange will be determined according to the stock baskets, one of which will be the long basket and the other the short basket.

Holders will receive the value of the long basket less the value of the short basket, less an adjustment amount, which is initially 1.25% and grows by 0.75% per year, calculated daily.

The securities will exchange at maturity and holders may also exercise a right to exchange from December 2006 to June 2009.

The long basket will include stocks of companies that have characteristics such as low levels of operating leverage that, in theory, allow them to generate earnings in a slowing economy while the stock in the short basket have characteristics such as high levels of operating leverage that, in theory, are less able to generate earnings in a slowing economy.

Wachovia applied to list the securities on the American Stock Exchange under "FRW."

Wachovia Securities will be the underwriter.

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