Citibank plans inverse floater market-linked CDs linked to S&P 500

By Marisa Wong

Madison, Wis., Feb. 3 - Citibank, NA plans to price callable inverse floating-rate market-linked certificates of deposit due Feb. 27, 2027 linked to Libor and the S&P 500 index, according to a term sheet.

The interest rate will be 6.5% for the first year. In years two through 15, the interest rate will be the underlying rate multiplied by the proportion of days on which the S&P 500 closes at or above the index reference level, which will be 80% of the initial index level. The underlying rate will be the greater of (a) (i) 1.1 times (ii) 5% minus Libor and (b) 1%. Interest is payable quarterly.

The payout at maturity will be par.

Beginning Feb. 27, 2013, the CDs will be callable on any interest payment date at par.

The CDs are expected to price Feb. 22 and settle Feb. 27.

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