Merrill Lynch to price 10%-13% STEP Income Securities linked to Monsanto

By Angela McDaniels

Tacoma, Wash., July 3 - Merrill Lynch & Co., Inc. plans to price one-year STEP Income Securities linked to the common stock of Monsanto Co., according to an FWP filing with the Securities and Exchange Commission.

The notes will bear interest at 10% to 13% per year, with the exact coupon to be set at pricing. Interest will be payable quarterly.

If the final share price is greater than or equal to the step level - 110% to 113% of the initial share price - the payout at maturity will be par of $10 plus 5%.

If Monsanto shares finish below the step level but at or above the threshold level - 90% of the initial share price - the payout will be par. Investors will lose 1% for every 1% that the final share price is below the threshold level.

The notes will price and settle in July or August.

The company said it applied to list the notes on the American Stock Exchange under the symbol "MZJ."

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

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