Union Bank Expands Its FDIC-Insured Market-Linked CD Offerings to Commodity Prices

September 29, 2009 12:26 PM EDT

LOS ANGELES--(BUSINESS WIRE)-- Union Bank, N.A., today announced it will be offering its principal- and Federal Deposit Insurance Corporation (FDIC)-protected market-linked certificates of deposit (MLCD) linked to the Dow Jones-UBS Commodity IndexSM1. The product reflects the bank's expansion from MLCDs linked to the Standard & Poor's 500(R) Index2 to an index composed of 19 commodities. The offering will be available from Sept. 28 to Oct. 23 and will enable investors to diversify their portfolios and potentially hedge against inflation while protecting their principal when held to maturity.

"As developing countries increase their demand for raw materials, thereby pushing commodity prices higher, this product will provide a range of investors a way to participate in the potential commodity price appreciation without risking the loss of their principal if held to maturity," said Bradley Shairson, senior vice president and head of Union Bank's Global Foreign Exchange and Derivatives department. "The offering also enables investors to potentially hedge against rising inflation amid the possible decline of the U.S. dollar and to diversify their portfolios with a potential for higher returns than traditional CDs."

If held to maturity, the principal invested in the MLCD is protected from market volatility and is FDIC-insured3 up to $250,000 through 2013 when combined with bank deposits in other accounts held in the same name.

After an initial one-year holding period, redemptions of the MLCDs are allowed quarterly at market value. Investors seeking to liquidate prior to maturity may not be able to sell their MLCD. Should an investor sell the MLCD prior to maturity, he/she may receive more or less than the original investment based on market conditions. The payment at maturity may yield a return that is less than that of a traditional CD or debt instrument of a comparable maturity and it may not reflect the full upside performance of the market.

The MLCD features a survivor's option which provides beneficiaries of a client who passes away prior to maturity the option to redeem the MLCD early and receive the full amount of the initial deposit back or hold it until maturity.

Unlike traditional CDs, investors will not receive periodic interest payments and there is no assurance of gains or that any gains will match the performance of the Dow Jones UBS Commodity IndexSM or the Standard & Poor's 500(R) Index, depending on how a particular MLCD offering is structured. Generally, for taxable accounts, interest is declared annually and taxed as ordinary income based upon an estimated yield for the issuance even though no income will be received until maturity.

Those interested in learning more about Union Bank's new market-linked CD may call (213) 236-5563 to speak with Bev Henretty or Mark Valentino.

MLCDs are currently available to individuals, small businesses, nonprofits and corporate and institutional investors through UnionBanc Investment Services LLC, a registered broker-dealer, investment advisor, member FINRA/SIPC and subsidiary of Union Bank, N.A., are issued and managed by Union Bank and sold through UnionBanc Investment Services LLC; are held in the name of Union Bank, as custodian; are FDIC-insured within permissible limits; are not insured, backed or guaranteed by SIPC or UnionBanc Investment Services; could result in a significant loss of principal if sold prior to maturity; when sold prior to maturity, any losses are not FDIC insured. For this and other risk factors and information regarding MLCDs, please refer to the MLCD Disclosure Statement and Supplement Disclosure Statement.

About UnionBanCal Corporation

Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $74 billion at June 30, 2009. UnionBanCal Corporation is the 16th largest commercial bank holding company in the U.S. based on assets at March 31, 2009. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. Union Bank is California's fifth largest bank by deposits at March 31, 2009. The bank has 335 banking offices in California, Oregon, and Washington and two international offices. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU). Visit www.unionbank.com for more information.

1. "Dow Jones," "UBS" "Dow Jones-UBS Commodity IndexSM " and "DJ-UBSCISM are service marks of Dow Jones & Company Inc. and UBS AG, as the case may be, and have been licensed for use for certain purposes by Union Bank, N.A. MLCDs based on the Dow Jones-UBS Commodity IndexSM , are not sponsored, endorsed, sold or promoted by Dow Jones, UBS, or any of their respective subsidiaries or affiliates, and none of Dow Jones, UBS, or any of their respective affiliates, makes any representation regarding the advisability of investing in the MLCDs.

2. The Standard & Poor's 500 Index is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Union Bank of California. MLCDs are not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's does not make any representation regarding the advisability of investing in the MLCDs.

3. The standard insurance amount of $250,000 per depositor is in effect through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor. For more information about FDIC coverage, please visit www.FDIC.gov.

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    Source: Union Bank, N.A.

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