Wells Fargo plans contingent annual interest CDs on commodity basket

By Marisa Wong

Madison, Wis., July 3 - Wells Fargo Bank, NA plans to price contingent annual interest market-linked certificates of deposit due July 30, 2019 linked to a basket of five commodities and five commodity indexes, according to a term sheet.

The equally weighted basket includes gasoline futures, nickel, gold, silver, zinc, the S&P GSCI Brent Crude Oil Index Excess Return, the S&P GSCI Livestock Index Excess Return, the S&P GSCI Wheat Index Excess Return, the S&P GSCI Corn Index Excess Return and the S&P GSCI Sugar Index Excess Return.

In July of each year, the CDs will pay a coupon equal to the sum of the basket components' weighted returns, subject to 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 20%.

The payout at maturity will be par.

The notes (Cusip: 949748R58) are expected to price July 26 and settle July 31.

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