JPMorgan plans annual income CDs linked to ETF Efficiente 5 index

By Angela McDaniels

Tacoma, Wash., Aug. 3 - JPMorgan Chase Bank, NA plans to price index annual income certificates of deposit due Aug. 31, 2018 linked to the performance of the JPMorgan ETF Efficiente 5 index, according to a term sheet.

Interest is payable annually at a rate equal to the greater of (a) the index return multiplied by the index factor and (b) 0.5%.

The index factor is one divided by the number of coupon determination dates that have occurred to date including the current coupon determination date. The coupon determination dates are Aug. 28, 2012, Aug. 27, 2013, Aug. 26, 2014, Aug. 26, 2015, Aug. 26, 2016, Aug. 28, 2017 and Aug. 28, 2018.

For example, an index return of 10% would result in a coupon of 10% if it were the first coupon payment date, 5% if it were the second coupon payment date, 3.33% if it were the third coupon payment date and so on.

The payout at maturity will be par plus the last coupon payment.

The index tracks the excess return of a portfolio of 12 exchange-traded funds, with dividends reinvested, and the JPMorgan Cash Index USD 3 Month above the return of the cash index less a fee of 0.5% per year that accrues daily.

The CDs (Cusip: 48123YK54) are expected to price Aug. 26 and settle Aug. 31.

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

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