UCB to price callable fixed-to-floating CDs linked to CMS rates

By Toni Weeks

San Luis Obispo, Calif., June 13 - United Community Bank plans to price callable fixed-to-floating-rate market-linked certificates of deposit due June 28, 2033 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 7% for the first year. After that, the interest rate will be an annual rate equal to four times the modified CMS spread, subject to a minimum rate of zero and a maximum rate of 7% per year. The modified CMS spread equals the 30-year CMS rate minus the five-year CMS rate minus 0.7%. Interest will be payable quarterly.

The payout at maturity will be par.

Beginning June 28, 2014, the CDs will be callable at par on any interest payment date.

RBC Capital Markets Corp. is the agent. Advisors Asset Management, Inc. is the distributor.

The CDs (Cusip: 90984P4N2) will settle June 28.

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