Wells Fargo plans contingent annual interest CDs on commodity basket

By Toni Weeks

San Diego, June 5 - Wells Fargo Bank, NA plans to price contingent annual interest market-linked certificates of deposit due June 29, 2018 linked to a basket of eight commodities and two commodity indexes, according to a term sheet.

The equally weighted basket includes copper, corn futures, gasoline futures, nickel, gold, soybean futures, silver, sugar futures, the S&P GSCI Brent Crude Oil Index Excess Return and the S&P GSCI Livestock Index Excess Return.

In June of each year, the CDs will pay a coupon equal to the sum of the basket components' weighted returns, with a floor of zero. On any valuation date, if an individual component's performance has remained the same or appreciated, it will be given a fixed return of 6% to 8% that will be set at pricing. If a commodity's return has declined, its component return will equal the commodity return, subject to a floor of negative 25%.

The payout at maturity will be par.

The notes (Cusip: 949748Q75) are expected to price June 25 and settle June 29.

The distributor is Incapital LLC.

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