Merrill Lynch plans principal-protected notes linked to CMS rates

By Angela McDaniels

Tacoma, Wash., June 11 - Merrill Lynch & Co., Inc. plans to price 100% principal-protected notes due June 2020 linked to the 30-year and 10-year Constant Maturity Swap (CMS) rates, according to a 424B3 filing with the Securities and Exchange Commission.

Interest will be payable quarterly and will accrue at a rate of 8% to 9.5% per year for the first year. The exact rate will be set at pricing.

Beginning in June 2009, the interest rate will be equal to a base rate multiplied by the proportion of days that the 30-year CMS rate is greater than or equal to the 10-year CMS rate. The base rate will be 8% to 9.5% per year for four years and will rise to 10% per year in June 2013.

From June 2009 through June 2013, the notes will be callable at par on any interest payment date.

If the notes are not called, the payout at maturity will be par.

The notes will price and settle in June or July.

Merrill Lynch & Co. and First Republic Securities Co., LLC will be the underwriters.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.