Salem Five Bank to price six-year CDs linked to basket of 10 stocks

By Angela McDaniels

Tacoma, Wash., Jan. 10 - Salem Five Bank plans to price market-linked certificates of deposit due Jan. 31, 2020 linked to a basket of stocks, according to a term sheet.

The equally weighted basket includes the common stocks of AT&T, Inc., Duke Energy Corp., Health Care REIT, Inc., Intel Corp., Kinder Morgan, Inc., L Brands, Inc., McGraw Hill Financial, Inc., PPL Corp., Reynolds American, Inc. and T. Rowe Price Group, Inc.

The CDs will pay a coupon each year equal to the greater of 0.5% and the average of the reference security performances.

If a stock's share price on the coupon valuation date is greater than or equal to its initial share price, its reference security performance will be equal to the cap, which is expected to be 6% to 7% and will be set at pricing. Otherwise, its reference security performance will be the greater of that stock's return and negative 10%.

The payout at maturity will be par plus the final coupon.

The CDs are putable on the last business day of March, June, September and December. Depositors who put their CDs will receive the current market value minus a 4% early redemption charge.

The CDs will price Jan. 28 and settle Jan. 31.

The Cusip number is 79411AAG9.

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