Societe Generale to price 0% notes linked to SGL Fed Model US index

By Angela McDaniels

Seattle, March 26 - Societe Generale, New York Branch plans to price an offering of 0% notes due April 30, 2012 linked to the SGI Fed Model US index via agent LaSalle Financial Services, Inc., according to a term sheet.

The notes will price on April 23 and settle on April 27.

The SGI Fed Model US index uses the "Fed Model" of equity valuation to identify the optimal weightings of an equity component and a bond component, which are the S&P 500 Total Return index and the SGI 5Y Synthetic AAA Bond US index, respectively.

If the yield on stocks is higher than the Treasury yield then the stock market is considered undervalued versus the bond market while if the yield no stocks is lower then the stock market is considered relatively overvalued.

The payout at maturity will be par plus the annualized rate of return on the index, which may be positive or negative, multiplied by the duration of the notes, which will be expressed as a decimal.

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