SunTrust Bank plans certificates of deposit linked to S&P 500 index

By Jennifer Chiou

New York, July 10 - SunTrust Bank plans to price 0% certificates of deposit due July 30, 2014 linked to the S&P 500 index, according to a term sheet.

The payout at maturity will be 105% of par plus the indexed amount, which will equal the sum of the index returns in each of the four annual observation periods making up the life of the CDs.

The return will be capped at 45% to 50% per year, with the exact cap to be set at pricing, and may be negative. If the sum of the periodic returns is negative, the indexed amount will be zero.

Beginning on June 15, 2010, the CDs will be putable on quarterly early redemption dates. The redemption amount will be calculated differently than the payout at maturity, will include an early withdrawal penalty and may be less than par.

The CDs will price on July 24 and settle on July 29.

InCapital LLC is the distributor.

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