JPMorgan plans 15-year callable variable-rate range accrual CDs on six-month Libor, Russell 2000

By Toni Weeks

San Luis Obispo, Calif., July 24 - JPMorgan Chase Bank, NA plans to price callable variable-rate range accrual certificates of deposit due Aug. 9, 2028 linked to six-month Libor and the Russell 2000 index, according to a term sheet.

The coupon will be 10% for the first year. After that, interest will accrue every day that the Russell 2000 index is at or above the minimum index level of 750 at a rate that is equal to (i) two times (ii) the applicable strike rate minus six-month Libor. The strike rate is 4.55% beginning Aug. 9, 2014, stepping up to 5.5% on Aug. 9, 2018 and to 6% on Aug. 9, 2023. Interest will be payable quarterly and cannot be more than the applicable maximum interest rate or less than zero. The maximum interest rate is 9.1% beginning Aug. 9, 2014, stepping up to 11% on Aug. 9, 2018 and to 12% on Aug. 9, 2023.

The payout at maturity will be par.

The CDs will be callable at par on any interest payment date beginning Aug. 9, 2014.

The CDs (Cusip: 48124JU63) will price Aug. 6 and settle Aug. 9.

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

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