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JPMorgan plans callable interest rate spread CDs linked to CMS rates
By Toni Weeks
San Luis Obispo, Calif., Oct. 25 - JPMorgan Chase Bank, NA plans to price callable interest rate spread certificates of deposit due Nov. 20, 2028 linked to the 30-year Constant Maturity Swap Rate and the five-year CMS rate, according to a term sheet.
The interest rate will be 8% for the first year. After that, it will be 4 times the spread of the 30-year CMS rate minus the five-year CMS rate less 35 basis points, subject to a minimum interest rate of zero and a maximum coupon of 11% per year. Interest will be payable quarterly.
The payout at maturity will be par.
Beginning Nov. 20, 2014, the CDs will be callable at par on any interest payment date.
The CDs (Cusip: 48124J6P8) are expected to price Nov. 15 and settle Nov. 20.
J.P. Morgan Securities LLC is the agent. Incapital LLC is the distributor.
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