Goldman Sachs plans contingent coupon CDs due 2020 tied to 10 stocks

By Toni Weeks

San Luis Obispo, Calif., May 1 - Goldman Sachs Bank USA plans to price contingent coupon certificates of deposit due May 29, 2020 linked to a basket of common stocks, according to a term sheet.

The equally weighted basket includes Apple Inc., Barrick Gold Corp., Google Inc., Merck & Co., Inc., Mondelez International, Inc., Target Corp., Time Warner Cable Inc., Verizon Communications Inc., Walgreen Co. and Wal-Mart Stores, Inc.

The CDs will pay a coupon each year equal to the average of the basket stocks' performances, subject to a minimum interest rate of zero.

If a basket stock's return is zero or positive, its performance will be equal to the maximum stock return. If a basket stock's return is negative, its performance will be the greater of its return and negative 15%. The maximum stock return is expected to be 6.5% to 7% and will be set at pricing.

The payout at maturity will be par plus the final coupon, if any.

The CDs are expected to price May 28 and settle May 31.

Goldman Sachs & Co. is the agent. Incapital LLC is distributor.

The Cusip number is 38147JEE8.

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