JPMorgan to sell callable leveraged spread CDs linked to CMS rates

By Marisa Wong

Madison, Wis., Sept. 13 - JPMorgan Chase Bank, NA plans to price callable leveraged spread certificates of deposit due Sept. 30, 2025 based on the 30-year and five-year Constant Maturity Swap rates, according to a term sheet.

The coupon will be 6% for the first year. After that, the rate will be four times the spread of the 30-year CMS rate over the five-year CMS rate minus 25 basis points, up to a maximum of 6% per year. Interest will be payable quarterly and cannot be less than zero.

The CDs will be callable at par on any interest payment date beginning on Sept. 30, 2011.

If the CDs are not called, the payout at maturity will be par.

The CDs (Cusip: 48123YPU4) are expected to settle Sept. 30.

J.P. Morgan Securities Inc. is the agent. Incapital LLC is the distributor.

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