SUBJECT TO COMPLETION OR AMENDMENT, DATED MARCH 16, 2009
PRICING SUPPLEMENT PRICING SUPPLEMENT NO. 851 TO
(TO PROSPECTUS DATED REGISTRATION STATEMENT NOS. 333-137691,
SEPTEMBER 29, 2006 333-137691-02
AND PROSPECTUS SUPPLEMENT DATED MARCH , 2009;
DATED SEPTEMBER 29, 2006) RULE 424(b)(2)
[ABN AMRO LOGO]
ABN AMRO BANK N.V.
ABN NOTES(SM) FULLY AND UNCONDITIONALLY GUARANTEED BY ABN AMRO HOLDING N.V.
KNOCK-IN REVERSE EXCHANGEABLE(SM) SECURITIES DUE JUNE 30, 2009
This pricing supplement relates to eight (8) separate offerings of securities
(the "Securities"). Each Security offered is linked to one, and only one,
Underlying Stock. You may participate in any of the eight (8) Securities
offerings or, at your election, in two or more of the offerings. This Pricing
Supplement does not, however, allow you to purchase a Security linked to a
basket or index of some or all of the Underlying Stocks described below.
The Securities do not guarantee any return of principal at maturity. Instead,
the payout at maturity will be based on the performance of the Underlying Stock
linked to each Security during the life of such Security, and in certain
circumstances described below we will exchange each Security at maturity for a
predetermined number of shares of the applicable Underlying Stock rather than
return your principal investment in the Securities. THE MARKET VALUE OF THOSE
SHARES OF UNDERLYING STOCK WILL BE LESS THAN THE PRINCIPAL AMOUNT OF EACH
SECURITY AND COULD BE ZERO. ACCORDINGLY, YOU COULD LOSE SOME OR ALL OF YOUR
INITIAL PRINCIPAL INVESTMENT. YOU WILL NOT PARTICIPATE IN ANY APPRECIATION OF
THE UNDERLYING SHARES.
PAYMENT AT MATURITY: The payment at maturity of each Security is based
on the performance of the applicable Underlying
Stock:
o If the closing price of the applicable
Underlying Stock on the primary U.S. exchange or
market for such Underlying Stock has not fallen
below the applicable knock-in level on any trading
day from but not including the pricing date to and
including the determination date, we will pay you
the principal amount of such Security in cash.
o If the closing price of the applicable
Underlying Stock on the primary U.S. exchange or
market for such Underlying Stock falls below the
applicable knock-in level on any trading day from
but not including the pricing date to and
including the determination date:
>> we will deliver to you a number of shares of
the applicable Underlying Stock equal to the
applicable stock redemption amount, in the
event that the closing price of such
Underlying Stock on the determination date is
below the applicable initial price (the
market value of the stock redemption amount
on the determination date will always be less
than the principal amount of $1,000 per
Security); or
>> we will pay you the principal amount of such
Security in cash, in the event that the
closing price of the applicable Underlying
Stock on the determination date is at or
above the applicable initial price.
You will receive cash in lieu of fractional
shares.
If due to events beyond our reasonable control, as
determined by us in our sole discretion, shares of
the applicable Underlying Stock are not available
for delivery at maturity we may pay you, in lieu
of the Stock Redemption Amount, the cash value of
the Stock Redemption Amount, determined by
multiplying the Stock Redemption Amount by the
Closing Price of the applicable Underlying Stock
on the Determination Date.
The payment at maturity is subject to adjustment
in certain circumstances
ISSUE PRICE: 100%
PROPOSED SETTLEMENT DATE: March 31, 2009
PROPOSED PRICING DATE: March 26, 2009
MATURITY DATE: June 30, 2009
INITIAL PRICE: The closing price of the applicable Underlying
Stock on the pricing date. The initial price is
subject to adjustment for certain corporate events
affecting the applicable Underlying Stock, which
we describe in "Description of Securities --
Adjustment Events".
STOCK REDEMPTION AMOUNT: A number of shares of the applicable Underlying
Stock equal to $1,000 divided by the applicable
initial price.
INTEREST PAYMENT DATES: Interest on the Securities is payable monthly in
arrears on the last day of each month starting on
April 30, 2009 and ending on the maturity date.
DETERMINATION DATE: June 25, 2009, subject to adjustment as described
in "Description of the Securities--Determination
Date."
GUARANTEE: The Securities will be fully and unconditionally
guaranteed by ABN AMRO Holding N.V.
DENOMINATION: The Securities may be purchased in denominations
of $1,000 and integral multiples thereof.
LISTING: The Securities will not be listed on any
securities exchange.
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COUPON STOCK AGGREGATE AGGREGATE
PAGE PRINCIPAL RATE PER KNOCK-IN KNOCK-IN INITIAL REDEMPTION AGENT'S PROCEEDS TO
UNDERLYING STOCK NUMBER AMOUNT CUSIP ANNUM LEVEL PRICE PRICE AMOUNT COMMISSION(1) ISSUER
------------------------------------------------------------------------------------------------------------------------------------
JPMorgan PS-15 00083G6S8 17.00% 50% $ $
Chase & Co.
------------------------------------------------------------------------------------------------------------------------------------
Target
Corporation PS-16 00083G6T6 16.00% 70% $ $
------------------------------------------------------------------------------------------------------------------------------------
Archer-Daniels-
Midland Company PS-17 00083G6U3 14.00% 70% $ $
------------------------------------------------------------------------------------------------------------------------------------
Freeport-McMoRan
Copper & Gold Inc. PS-18 00083G6V1 14.00% 55% $ $
------------------------------------------------------------------------------------------------------------------------------------
China Mobile
Limited (2) PS-19 00083G6W9 12.50% 75% $ $
------------------------------------------------------------------------------------------------------------------------------------
PetroChina
Company Limited (3) PS-20 00083G6X7 12.50% 70% $ $
------------------------------------------------------------------------------------------------------------------------------------
Caterpillar Inc. PS-21 00083G6Y5 11.50% 60% $ $
------------------------------------------------------------------------------------------------------------------------------------
Apple Inc. PS-22 00083G6Z2 11.00% 70% $ $
------------------------------------------------------------------------------------------------------------------------------------
(1) For all offerings, the agent will receive a commission of 1.375%. For
additional information see "Plan of Distribution" in this Pricing
Supplement.
(2) This offering is linked to American Depositary Shares, or ADSs, each ADS
representing five ordinary shares par value Hk$0.10 per ordinary share, of
China Mobile Limited.
(3) This offering is linked to American Depository Shares, or ADS's, each ADS
representing 100 H shares, par value RMB 1.00 per H share, or PetroChina
Company Limited
(4) See "Description of Securities - Underlying Stocks" in this Pricing
Supplement.
THE SECURITIES ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER FEDERAL AGENCY.
THE SECURITIES INVOLVE RISKS NOT ASSOCIATED WITH AN INVESTMENT IN CONVENTIONAL
DEBT SECURITIES. SEE "RISK FACTORS" BEGINNING ON PS-8.
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these Securities, or determined if this Pricing
Supplement or the accompanying Prospectus Supplement or Prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
THE AGENTS ARE NOT OBLIGATED TO PURCHASE THE SECURITIES BUT HAVE AGREED TO USE
REASONABLE EFFORTS TO SOLICIT OFFERS TO PURCHASE THE SECURITIES. TO THE EXTENT
THE FULL AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES LINKED TO ANY OF THE
UNDERLYING STOCKS BEING OFFERED BY THIS PRICING SUPPLEMENT IS NOT PURCHASED BY
INVESTORS IN THE APPLICABLE OFFERING, ONE OR MORE OF OUR AFFILIATES HAVE AGREED
TO PURCHASE THE UNSOLD PORTION, WHICH MAY CONSTITUTE A SUBSTANTIAL PORTION OF
THE TOTAL AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES LINKED TO SUCH UNDERLYING
STOCK, AND TO HOLD SUCH SECURITIES FOR INVESTMENT PURPOSES. SEE "HOLDING OF THE
SECURITIES BY OUR AFFILIATES AND FUTURE SALES" UNDER THE HEADING "RISK FACTORS"
AND "PLAN OF DISTRIBUTION."
This Pricing Supplement and the accompanying Prospectus Supplement and
Prospectus may be used by our affiliates in connection with offers and sales of
the Securities in market-making transactions.
ABN AMRO INCORPORATED
In this Pricing Supplement, the "Bank," "we," "us" and "our" refer to ABN
AMRO Bank N.V. and "Holding" refers to ABN AMRO Holding N.V., our parent
company. We refer to the Securities offered hereby and the related guarantees as
the "Securities" and to each individual security offered hereby as a "Security".
Reverse Exchangeable(SM) and ABN Notes(SM) are service marks of ABN AMRO
Bank N.V.
ANY SECURITIES ISSUED, SOLD OR DISTRIBUTED PURSUANT TO THIS PRICING
SUPPLEMENT MAY NOT BE OFFERED OR SOLD (I) TO ANY PERSON/ENTITY LISTED ON
SANCTIONS LISTS OF THE EUROPEAN UNION, UNITED STATES OR ANY OTHER APPLICABLE
LOCAL COMPETENT AUTHORITY; (II) WITHIN THE TERRITORY OF CUBA, SUDAN, IRAN AND
MYANMAR; (III) TO RESIDENTS IN CUBA, SUDAN, IRAN OR MYANMAR; OR (IV) TO CUBAN
NATIONALS, WHEREVER LOCATED.
PS-2
SUMMARY OF GENERAL TERMS FOR EACH SECURITIES OFFERING
THIS PRICING SUPPLEMENT RELATES TO EIGHT (8) SEPARATE OFFERINGS OF
SECURITIES. EACH SECURITY OFFERED IS LINKED TO ONE, AND ONLY ONE, UNDERLYING
STOCK. THE PURCHASER OF ANY OFFERING WILL ACQUIRE A SECURITY LINKED TO A SINGLE
UNDERLYING STOCK, NOT TO A BASKET OR INDEX OF SOME OR ALL THE UNDERLYING STOCKS
DESCRIBED HEREIN. YOU MAY PARTICIPATE IN ANY OF THE EIGHT (8) OFFERINGS OR, AT
YOUR ELECTION, IN SEVERAL OR ALL OFFERINGS.
THE FOLLOWING SUMMARY ANSWERS SOME QUESTIONS THAT YOU MIGHT HAVE REGARDING
THE SECURITIES IN GENERAL TERMS ONLY. IT DOES NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE SUMMARY TOGETHER WITH THE MORE
DETAILED INFORMATION THAT IS CONTAINED IN THE REST OF THIS PRICING SUPPLEMENT
AND IN THE ACCOMPANYING PROSPECTUS AND PROSPECTUS SUPPLEMENT. YOU SHOULD
CAREFULLY CONSIDER, AMONG OTHER THINGS, THE MATTERS SET FORTH IN "RISK FACTORS."
IN ADDITION, WE URGE YOU TO CONSULT WITH YOUR INVESTMENT, LEGAL, ACCOUNTING, TAX
AND OTHER ADVISORS WITH RESPECT TO ANY INVESTMENT IN THE SECURITIES.
WHAT ARE THE SECURITIES?
The Securities are interest paying, non-principal protected securities
issued by us, ABN AMRO Bank N.V., and are fully and unconditionally guaranteed
by our parent company, ABN AMRO Holding N.V. The Securities are senior notes of
ABN AMRO Bank N.V. and have a maturity of three months. These Securities combine
certain features of debt and equity by offering a fixed interest rate on the
principal amount while the payment at maturity is determined based on the
performance of the applicable Underlying Stock. Therefore your principal is at
risk but you have no opportunity to participate in any appreciation of the
Underlying Shares.
The Securities have certain features that make them what we refer to as
"Knock-in Reverse Exchangeable Securities." This means that if the closing price
of the applicable Underlying Stock on the primary U.S. securities exchange or
organized market for such Underlying Stock, which we refer to as the relevant
exchange, never falls below a certain price level, which we call the knock-in
level on any trading day from but not including the pricing date to and
including the determination date (such period, the "Knock-in Period"), then we
will pay you in cash the principal amount of each Security at maturity. On the
other hand, if the closing price of the applicable Underlying Stock on the
relevant exchange falls below the applicable knock-in level on any trading day
during the Knock-in Period, then the payment at maturity will depend on the
closing price of such Underlying Stock on the determination date. In this latter
case, if the closing price of the applicable Underlying Stock on the
determination date is equal to or greater than the applicable initial price, we
will pay you in cash the principal amount of each Security you hold; if the
closing price of the applicable Underlying Stock on the determination date is
less than the applicable initial price, we will deliver to you, in exchange for
each $1,000 principal amount of Securities, a number of shares of such
Underlying Stock equal to the applicable stock redemption amount.
WHY IS THE INTEREST RATE ON THE SECURITIES HIGHER THAN THE INTEREST RATE PAYABLE
ON YOUR CONVENTIONAL DEBT SECURITIES WITH THE SAME MATURITY?
The Securities offer a higher interest rate than the yield that would be payable
on a conventional debt security with the same maturity issued by us or an issuer
with a comparable credit rating because you, the investor in the Securities,
indirectly sell a put option to us on the shares of the applicable Underlying
Stock. The premium due to you for this put option is combined with a market
interest rate on our senior debt to produce the higher interest rate on the
Securities. As explained below under "What are the consequences of the indirect
put option that I have sold you?" you are being paid the premium for taking the
risk that you may receive Underlying Shares with a market value less than the
principal amount of your Securities at maturity, which would mean that you would
lose some or all of your initial principal investment.
WHAT ARE THE CONSEQUENCES OF THE INDIRECT PUT OPTION THAT I HAVE SOLD YOU?
The put option you indirectly sell to us creates the feature of
exchangeability. This feature could result in the delivery of Underlying Shares
to you, at maturity, with a market value which is less than the principal amount
of $1,000 per Security. If the closing price of the applicable Underlying Stock
on the relevant exchange falls below the applicable knock-in level on any
trading day during the Knock-in Period, and on the determination date the
closing price per share of such Underlying Stock is less than the applicable
initial price, you will receive a fixed number of shares of such Underlying
Stock for each Security you hold, which we call the stock
PS-3
redemption amount for such Underlying Stock. The market value of the stock
redemption amount on the determination date will always be less than the
principal amount of $1,000 per Security. On the other hand, if the closing price
of the applicable Underlying Stock on the relevant exchange falls below the
applicable knock-in level, and on the determination date the closing price per
shares of such Underlying Stock is equal to or greater than the applicable
initial price, you will receive $1,000 for each Security you hold. If the price
of the Underlying Shares rises above the initial price you will not participate
in any appreciation in the price of the Underlying Shares. Because of the
exchangeability of the Securities, and because we will determine whether you
will receive cash or shares of Underlying Stock by reference to the closing
price of the applicable Underlying Stock on the determination date, such
securities are generally referred to as "reverse exchangeable securities."
However, because this feature of exchangeability is created only if the closing
price of the applicable Underlying Stock on the relevant exchange falls below
the applicable knock-in level on any trading day during the Knock-in Period, we
call the Securities "Knock-in Reverse Exchangeable Securities."
WHAT WILL I RECEIVE AT MATURITY OF THE SECURITIES?
The payment at maturity of each Security will depend on (i) whether or not
the closing price of the Underlying Stock to which such Security is linked fell
below the knock-in level on any trading day during the Knock-in Period, and if
so, (ii) the closing price of the applicable Underlying Stock on the
determination date. To determine closing prices, we look at the prices quoted by
the relevant exchange.
o If the closing price of the applicable Underlying Stock on the
relevant exchange has not fallen below the applicable knock-in level
on any trading day during the Knock-in Period, we will pay you the
principal amount of each Security in cash.
o If the closing price of the applicable Underlying Stock on the
relevant exchange has fallen below the applicable knock-in level on
any trading day during the Knock-in Period, we will either:
o deliver to you the applicable stock redemption amount, in
exchange for each Security, in the event that the closing price
of the applicable Underlying Stock is below the applicable
initial price on the determination date (the market value of the
stock redemption amount on the determination date will always be
less than the principal amount of $1,000 per Security); or
o pay you the principal amount of each Security in cash, in the
event that the closing price of the applicable Underlying Stock
is at or above the applicable initial price on the determination
date.
If due to events beyond our reasonable control, as determined by us in our
sole discretion, shares of the applicable Underlying Stock are not available for
delivery at maturity we may pay you, in lieu of the Stock Redemption Amount, the
cash value of the Stock Redemption Amount, determined by multiplying the Stock
Redemption Amount by the Closing Price of the applicable Underlying Stock on the
Determination Date.
The payment at maturity is further subject to adjustment in certain
circumstances, which we describe in "Description of Securities -- Adjustment
Events."
HOW ARE THE STOCK REDEMPTION AMOUNT AND KNOCK-IN LEVEL DETERMINED FOR EACH
OFFERING?
The stock redemption amount for each $1,000 principal amount of any
Security is equal to $1,000 divided by the initial price of the Underlying Stock
linked to such Security. The value of any fractional shares of such Underlying
Stock that you are entitled to receive, after aggregating your total holdings of
the Securities linked to such Underlying Stock, will be paid in cash based on
the closing price of such Underlying Stock on the determination date.
The knock-in level with respect to any Underlying Stock is the percentage
of the initial price of such Underlying Stock set forth on the cover of this
Pricing Supplement.
The initial price and consequently the stock redemption amount and knock-in
level with respect to each Underlying Stock are subject to adjustment for
certain corporate events affecting such Underlying Stock, which we describe in
"Description of Securities -- Adjustment Events."
PS-4
WHAT INTEREST PAYMENTS CAN I EXPECT ON THE SECURITIES?
Each offering of Securities pays interest at the rate per annum for such
offering set forth on the cover page of this Pricing Supplement. The interest
rate for each offering of Securities is fixed at issue and is payable monthly in
arrears. This means that irrespective of whether the Securities are exchanged at
maturity for cash or shares, you will be entitled to monthly interest payments
on the full principal amount of the Securities you hold, payable in cash.
Interest on the Securities will be computed and accrue on the basis of a 360-day
year of twelve 30-day months, or in the case of an incomplete month, the actual
number of days elapsed from and including the most recent interest payment date,
or if no interest has been paid, from the issue or other interest accrual date,
to but excluding the earlier of the next interest payment date or the maturity
date.
CAN YOU GIVE ME AN EXAMPLE OF THE PAYMENT AT MATURITY?
If, for example, in a hypothetical offering, the interest rate was 10% per
annum, the initial price of a share of underlying stock was $45.00 and the
knock-in level for such offering was 80%, then the stock redemption amount would
be 22.222 shares of underlying stock, or $1,000 divided by $45.00, and the
knock-in level would be $36.00, or 80% of the initial price.
If the closing price of that hypothetical underlying stock fell below the
knock-in level of $36.00 on any trading day during the Knock-in Period, then the
payment at maturity would depend on the closing price of the underlying stock on
the determination date. In this case, if the closing price of the underlying
stock on the determination date is $30.00 per share at maturity, which is below
the initial price level, you would receive 22.222 shares of underlying stock for
each $1,000 principal amount of the securities. (In actuality, because we cannot
deliver fractions of a share, you would receive on the maturity date for each
$1,000 principal amount of the securities 22 shares of underlying stock plus
$6.66 cash in lieu of 0.222 fractional shares, determined by multiplying 0.222
by $30.00, the closing price per shares of underlying stock on the determination
date.) In addition, over the life of the securities you would have received
interest payments at a rate of 10% per annum. IN THIS HYPOTHETICAL EXAMPLE, THE
MARKET VALUE OF THOSE 22 SHARES OF UNDERLYING STOCK (INCLUDING THE CASH PAID IN
LIEU OF FRACTIONAL SHARES) THAT WE WOULD DELIVER TO YOU AT MATURITY FOR EACH
$1,000 PRINCIPAL AMOUNT OF SECURITY WOULD BE $666.66, WHICH IS LESS THAN THE
PRINCIPAL AMOUNT OF $1,000, AND YOU WOULD HAVE LOST A PORTION OF YOUR INITIAL
INVESTMENT. If, on the other hand, the closing price of the underlying stock on
the determination date is $50.00 per share, which is above the initial price
level, you will receive $1,000 in cash for each $1,000 principal amount of the
securities regardless of the knock-in level having been breached. In addition,
over the life of the Securities you would have received interest payments at a
rate of 10% per annum.
Alternatively, if the closing price of the underlying stock never falls
below $36.00, which is the knock-in level, on any trading day during the
Knock-in Period, at maturity you will receive $1,000 in cash for each security
you hold regardless of the closing price of the underlying stock on the
determination date. In addition, over the life of the securities you would have
received interest payments at a rate of 10% per annum.
THIS EXAMPLE IS FOR ILLUSTRATIVE PURPOSES ONLY AND IS BASED ON A
HYPOTHETICAL OFFERING. FOR EACH OFFERING OF SECURITIES, WE WILL SET THE INITIAL
PRICE, KNOCK-IN LEVEL AND STOCK REDEMPTION AMOUNT (SUBJECT TO ADJUSTMENT FOR
CERTAIN CORPORATE EVENTS AFFECTING THE APPLICABLE UNDERLYING STOCK) ON THE DATE
WE PRICE THE SECURITIES, WHICH WE REFER TO AS THE PRICING DATE. IT IS NOT
POSSIBLE, HOWEVER, TO PREDICT THE CLOSING PRICE OF ANY OF THE UNDERLYING STOCKS
ON THE DETERMINATION DATE OR AT ANY TIME DURING THE LIFE OF THE SECURITIES.
In this Pricing Supplement, we have provided under the heading
"Hypothetical Sensitivity Analysis of Total Return of the Securities at
Maturity" the total return of owning securities of a hypothetical offering
through maturity for various hypothetical closing prices of a hypothetical
common stock on the determination date in the case where the knock-in level has
been breached and in the case where the knock-in level has not been breached.
DO I GET ALL MY PRINCIPAL BACK AT MATURITY?
You are not guaranteed to receive any return of principal at maturity. If
the closing price of the applicable Underlying Stock falls below the applicable
knock-in level on any trading day during the Knock-in Period, and the closing
price of such Underlying Stock is below the applicable initial price on the
determination date, we will deliver to you shares of such Underlying Stock. The
market value of the shares of such Underlying Stock at the time you
PS-5
receive those shares will be less than the principal amount of the Securities
and could be zero.
IS THERE A LIMIT TO HOW MUCH I CAN EARN OVER THE LIFE OF THE SECURITIES?
Yes. The amount payable under the terms of the Securities will never exceed
the principal amount of the Securities payable at maturity plus the applicable
interest payments you earn over the life of the Securities.
DO I BENEFIT FROM ANY APPRECIATION IN THE UNDERLYING STOCK OVER THE LIFE OF THE
SECURITIES?
No. The amount paid at maturity for each $1,000 principal amount of the
Securities will not exceed $1,000. As a result, if the applicable Underlying
Stock has appreciated above its price level on the pricing date, the payment you
will receive at maturity will not reflect that appreciation. UNDER NO
CIRCUMSTANCES WILL YOU RECEIVE A PAYMENT AT MATURITY GREATER THAN THE PRINCIPAL
AMOUNT OF THE SECURITIES THAT YOU HOLD AT THAT TIME.
WHAT IS THE MINIMUM REQUIRED PURCHASE?
You can purchase Securities in $1,000 denominations or in integral
multiples thereof.
IS THERE A SECONDARY MARKET FOR THE SECURITIES?
The Securities will not be listed on any securities exchange. Accordingly,
there may be little or no secondary market for the Securities and, as such,
information regarding independent market pricing for the Securities may be
extremely limited. You should be willing to hold your Securities until the
maturity date.
Although it is not required to do so, we have been informed by our
affiliate that when these offerings are complete, it intends to make purchases
and sales of the Securities from time to time in off-exchange transactions. If
our affiliate does make such a market in the Securities, it may stop doing so at
any time.
In connection with any secondary market activity in the Securities, our
affiliate may post indicative prices for the Securities on a designated website
or via Bloomberg. However, our affiliate is not required to post such indicative
prices and may stop doing so at any time. INVESTORS ARE ADVISED THAT ANY PRICES
SHOWN ON ANY WEBSITE OR BLOOMBERG PAGE ARE INDICATIVE PRICES ONLY AND, AS SUCH,
THERE CAN BE NO ASSURANCE THAT ANY TRADE COULD BE EXECUTED AT SUCH PRICES.
Investors should contact their brokerage firm for further information.
In addition, the issue price of the Securities includes the selling agents'
commissions paid with respect to the Securities and the cost of hedging our
obligations under the Securities. The cost of hedging includes the profit
component that our affiliate has charged in consideration for assuming the risks
inherent in managing the hedging the transactions. The fact that the issue price
of the Securities includes these commissions and hedging costs is expected to
adversely affect the secondary market prices of the Securities. See "Risk
Factors--The Inclusion of Commissions and Cost of Hedging in the Issue Price is
Likely to Adversely Affect Secondary Market Prices" and "Use of Proceeds."
TELL ME MORE ABOUT ABN AMRO BANK N.V. AND ABN AMRO HOLDING N.V.
ABN AMRO Bank N.V. is an international banking group offering a wide range
of banking products and financial services worldwide through our network of
offices and branches. ABN AMRO Holding N.V. is the parent company of ABN AMRO
Bank N.V. Holding's main purpose is to own the Bank and its subsidiaries. All of
the Securities issued by the Bank hereunder are fully and unconditionally
guaranteed by Holding.
On November 2, 2007 a consortium (the "Consortium") of the Royal Bank of
Scotland Group plc ("RBS"), Fortis SA/NV and Fortis N.V. (collectively,
"Fortis"), and Banco Santander Central Hispano SA, which had made a tender offer
for the shares of Holding, announced that approximately 98.8% of the shares of
Holding had been tendered to the Consortium as of October 31, 2007. On September
22, 2008 the Consortium acquired the remaining shares of Holding. On October 3,
2008 Holding jointly announced with the Dutch Minister of Finance (the
"Minister") that on that date the Minister acquired all shares of Fortis Bank
Nederland (Holding) NV from Fortis, which effectively transferred Fortis' share
in Holding to the State of the Netherlands.
On November 28, 2008 UK Financial Investments Limited, which is wholly
owned by the UK government, acquired 57.9% of the enlarged issued ordinary share
capital of RBS and (pound)5 billion of RBS preference shares. On January 19,
2009, RBS announced that it had reached agreement with the UK Treasury and UK
Financial Investments Limited to
PS-6
replace the (pound)5 billion of RBS preference shares with new RBS ordinary
shares.
Holding is no longer listed on Euronext or the New York Stock Exchange but
files periodic reports with the SEC. ABN AMRO Bank N.V. is rated A+ by Standard
& Poor's and Aa2 by Moody's. "See "Risk Factors--Changes in Our Credit Ratings
May Affect the Market Value of Your Securities."
WHERE CAN I FIND OUT MORE ABOUT THE ISSUERS OF THE UNDERLYING STOCKS?
Because each of the Underlying Stocks are registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the issuers of the
Underlying Stocks are required to file periodically certain financial and other
information specified by the Commission which is available to the public. You
should read "The Underlying Stocks" in this Pricing Supplement to learn how to
obtain public information regarding the Underlying Stocks and other important
information. The historical highest closing price, lowest closing price and last
day closing price of the Underlying Stocks for each quarter since 2003 are set
forth under the heading "The Underlying Stocks" in this Pricing Supplement.
THE ISSUERS OF THE UNDERLYING STOCKS ARE NOT AFFILIATES OF OURS AND ARE NOT
INVOLVED WITH THESE OFFERINGS IN ANY WAY. THE OBLIGATIONS REPRESENTED BY THE
SECURITIES ARE OUR OBLIGATIONS, NOT THOSE OF THE UNDERLYING STOCKS ISSUERS.
INVESTING IN THE SECURITIES IS NOT EQUIVALENT TO INVESTING IN THE SHARES OF AN
ISSUER OF ANY OF THE UNDERLYING STOCKS.
WHO WILL DETERMINE WHETHER THE CLOSING PRICE OF EACH UNDERLYING STOCK HAS FALLEN
BELOW THE APPLICABLE KNOCK-IN LEVEL, THE CLOSING PRICE OF EACH UNDERLYING STOCK
ON THE DETERMINATION DATE, AND THE STOCK REDEMPTION AMOUNT AND THE INITIAL PRICE
FOR EACH SUCH UNDERLYING STOCK?
We have appointed our affiliate ABN AMRO Incorporated, which we refer to as
AAI, to act as calculation agent for Wilmington Trust Company, the trustee for
the Securities and Citibank, N.A., the securities administrator. As calculation
agent, AAI will determine whether the closing price of each Underlying Stock has
fallen below the applicable knock-in level, the closing price of each Underlying
Stock on the determination date, and the stock redemption amount and the initial
price for each such Underlying Stock. The calculation agent may adjust the
initial price of any Underlying Stock and consequently the applicable stock
redemption amount and applicable knock-in level, which we describe in the
section called "Description of Securities -- Adjustment Events."
WHO INVESTS IN THE SECURITIES?
The Securities are not suitable for all investors. The Securities might be
considered by investors who:
o seek a higher interest rate than the current dividend yield on the
applicable Underlying Stock or the yield on a conventional debt security
with the same maturity issued by us or an issuer with a comparable credit
rating;
o are willing to accept the risk of owning equity in general and the
applicable Underlying Stock in particular and the risk that they could lose
their entire investment;
o do not expect to participate in any appreciation in the price of the
applicable Underlying Stock; and
o and are willing to hold the Securities until maturity.
You should carefully consider whether the Securities are suited to your
particular circumstances before you decide to purchase them. In addition, we
urge you to consult with your investment, legal, accounting, tax and other
advisors with respect to any investment in the Securities.
WHAT ARE SOME OF THE RISKS IN OWNING THE SECURITIES?
Investing in the Securities involves a number of risks. We have described
the most significant risks relating to the Securities under the heading "Risk
Factors" in this Pricing Supplement which you should read before making an
investment in the Securities.
Some selected risk considerations include:
o CREDIT RISK. Because you are purchasing a security from us, you are
assuming our credit risk. In addition, because the Securities are fully and
unconditionally guaranteed by Holding, you are assuming the credit risk of
Holding in the event that we fail to make any payment or delivery required
by the terms of the Securities.
o PRINCIPAL RISK. The Securities are not principal protected, which means
there is no guaranteed return of principal. If the closing price of the
PS-7
applicable Underlying Stock falls below the applicable knock-in level on
any trading day during the Knock-in Period and the closing price on the
determination date is less than the applicable initial price, we will
deliver to you a fixed number of shares of such Underlying Stock with a
market value less than the principal amount of the Securities, which value
may be zero.
o LIQUIDITY AND MARKET RISK. The Securities will not be listed on any
securities exchange. Accordingly, there may be little or no secondary
market for the Securities and information regarding independent market
pricing for the Securities may be very limited or non-existent. The value
of the Securities in the secondary market, if any, will be subject to many
unpredictable factors, including then prevailing market conditions.
WHAT IF I HAVE MORE QUESTIONS?
You should read the "Description of Securities" in this Pricing Supplement
for a detailed description of the terms of the Securities. The Securities are
senior notes issued as part of our ABN Notes(SM) program and guaranteed by
Holding. The Securities offered by the Bank will constitute the Bank's unsecured
and unsubordinated obligations and rank pari passu without any preference among
them and with all our other present and future unsecured and unsubordinated
obligations. The guarantee of Holding will constitute Holding's unsecured and
unsubordinated obligations and rank pari passu without any preference among them
and with all Holding's other present and future unsecured and unsubordinated
obligations. You can find a general description of our ABN Notes(SM) program in
the accompanying Prospectus Supplement. We also describe the basic features of
this type of note in the sections called "Description of Notes" and "Notes
Linked to Commodity Prices, Single Securities, Baskets of Securities or
Indices".
You may contact our principal executive offices at Gustav Mahleraan 10,
1082 PP Amsterdam, The Netherlands. Our telephone number is (31-20) 628-9393.
PS-8
RISK FACTORS
This section describes the most significant risks relating to the
Securities. For a discussion of certain general risks associated with your
investment in the Securities, please refer to the section entitled "Risk
Factors" beginning on page S-3 of the accompanying prospectus supplement. YOU
SHOULD CAREFULLY CONSIDER WHETHER THE SECURITIES ARE SUITED TO YOUR PARTICULAR
CIRCUMSTANCES BEFORE YOU DECIDE TO PURCHASE THEM. IN ADDITION, WE URGE YOU TO
CONSULT WITH YOUR INVESTMENT, LEGAL, ACCOUNTING, TAX AND OTHER ADVISORS WITH
RESPECT TO ANY INVESTMENT IN THE SECURITIES.
THE SECURITIES ARE NOT ORDINARY SENIOR NOTES; THERE IS NO GUARANTEED RETURN OF
PRINCIPAL
The Securities combine limited features of debt and equity. The terms of
the Securities differ from those of ordinary equity securities in that you will
not participate in any appreciation of the Underlying Shares even if the price
of the Underlying Shares rises above the initial price. The terms of the
Securities differ from those of ordinary debt securities in that we will not pay
you a fixed principal amount in cash at maturity if the closing price of the
applicable Underlying Stock has fallen below the applicable knock-in level on
any trading day during the Knock-in Period and, in addition, the closing price
of the applicable Underlying Stock is below the applicable initial price on the
determination date. In such event, we will exchange each Security you hold for a
number of shares of the applicable Underlying Stock equal to the stock
redemption amount. Such shares will have a market value of less than the
principal amount of the Securities, and such value may be zero. You cannot
predict the future performance of any Underlying Stock based on its historical
performance. ACCORDINGLY, YOU COULD LOSE SOME OR ALL OF THE AMOUNT YOU INVEST IN
THE SECURITIES.
THE SECURITIES WILL NOT PAY MORE THAN THE STATED PRINCIPAL AMOUNT AT MATURITY
The amount paid at maturity of the Securities in cash or shares of
Underlying Stock will not exceed the principal amount of the Securities. If the
closing price of the applicable Underlying Stock on the determination date is
equal to or exceeds the applicable initial price (regardless of whether the
applicable knock-in level has been previously breached), you will receive the
principal amount of the Securities irrespective of any appreciation in the share
price. You will not receive shares of the applicable Underlying Stock or any
other asset equal to the value of the shares of the applicable Underlying Stock.
As a result, if the applicable Underlying Stock has appreciated above its
closing price level on the pricing date, the payment you will receive at
maturity will not reflect that appreciation. UNDER NO CIRCUMSTANCES WILL YOU
RECEIVE A PAYMENT AT MATURITY GREATER THAN THE PRINCIPAL AMOUNT OF THE
SECURITIES THAT YOU HOLD AT THAT TIME.
THE SECURITIES WILL NOT BE LISTED ON ANY SECURITIES EXCHANGE; SECONDARY TRADING
MAY BE LIMITED
You should be willing to hold your Securities until the maturity date. The
Securities will not be listed on any securities exchange; accordingly, there may
be little or no secondary market for the Securities and information regarding
independent market pricing for the Securities may be very limited or
non-existent. Even if there is a secondary market, it may not provide enough
liquidity to allow you to trade or sell the Securities easily. Upon completion
of the offering, our affiliate has informed us that it intends to purchase and
sell the Securities from time to time in off-exchange transactions, but it is
not required to do so. If our affiliate does make such a market in the
Securities, it may stop doing so at any time.
In addition, the total principal amount of the Securities being offered is
not being purchased by investors in the offering, and one or more of our
affiliates has agreed to purchase the unsold portion. Such affiliate or
affiliates intend to hold the Securities for investment purposes, for at least
30 days, which may affect the supply of Securities available for secondary
trading and therefore adversely affect the price of the Securities in any
secondary trading. If a substantial portion of any Securities held by our
affiliates were to be offered for sale following this offering, the market price
of such Securities could fall, especially if secondary trading in such
Securities is limited or illiquid.
PS-9
MARKET PRICE OF THE SECURITIES INFLUENCED BY MANY UNPREDICTABLE FACTORS
The value of the Securities may move up and down between the date you
purchase them and the determination date when the calculation agent determines
the amount to be paid to the holders of the Securities on the maturity date.
Several factors, many of which are beyond our control, will influence the
value of the Securities, including:
o the market price of the Underlying Shares, in particular, whether the
closing price of the Underlying Shares has fallen below the knock-in
level on any trading day;
o the volatility (frequency and magnitude of changes) in the price of
the Underlying Shares;
o the dividend rate on the Underlying Shares. While dividend payments on
the Underlying Shares, if any, are not paid to holders of the
Securities, such payments may have an influence on the market price of
the Underlying Shares and therefore on the Securities;
o interest and yield rates in the market;
o economic, financial, political and regulatory or judicial events that
affect the stock markets generally and which may affect the closing
price of the Underlying Shares and/or the Securities;
o the time remaining to the maturity of the Securities;
o the occurrence of certain events affecting the Underlying Shares which
may require an adjustment to the initial price; and
o the creditworthiness of the Bank as issuer of the Securities and
Holding as the guarantor of the Bank's obligations under the
Securities. Any person who purchases the Securities is relying upon
the creditworthiness of the Bank and Holding and has no rights against
any other person. The Securities constitute the general, unsecured and
unsubordinated contractual obligations of the Bank and Holding.
Some or all of these factors will influence the price that you will receive
if you sell your Securities in the secondary market, if any, prior to maturity.
For example, you may have to sell your Securities at a substantial discount from
the principal amount if at the time of sale the market price of the applicable
Underlying Stock is at, below, or not sufficiently above the applicable knock-in
level. See "Risk Factors--The Inclusion of Commissions and Cost of Hedging in
the Issue Price is Likely to Adversely Affect Secondary Market Prices."
CHANGES TO OUR CREDIT RATINGS MAY AFFECT THE MARKET VALUE OF YOUR SECURITIES
Our credit ratings are an assessment, by each rating agency, of our ability
to pay our obligations, including those under the Securities. Credit ratings are
subject to revision, suspension or withdrawal at any time by the assigning
rating organization in their sole discretion. Consequently, actual or
anticipated changes to our credit ratings may affect the market value of the
Securities. However, because the return on the Securities is dependent upon
factors in addition to our ability to pay our obligations under the Securities,
an improvement in our credit ratings will not necessarily increase the market
value of the Securities and will not reduce market risk and other investment
risks related to the Securities. Credit ratings do not address the price, if
any, at which the Securities may be resold prior to maturity (which may be
substantially less than the issue price of the Securities) and are not
recommendations to buy, sell or hold the Securities. See "Risk Factors--Market
Price of the Securities Influenced by Many Unpredictable Factors"
THE INCLUSION OF COMMISSIONS AND COST OF HEDGING IN THE ISSUE PRICE IS LIKELY TO
ADVERSELY AFFECT SECONDARY MARKET PRICES
Assuming no change in market conditions or any other relevant factors, the
price, if any, at which the selling agents are willing to purchase Securities in
secondary market transactions will likely be lower than the issue price,
PS-10
since the issue price included, and secondary market prices are likely to
exclude, commissions paid with respect to the Securities, as well as the profit
component included in the cost of hedging our obligations under the Securities.
In addition, any such prices may differ from values determined by pricing models
used by the selling agents, as a result of dealer discounts, mark-ups or other
transaction costs.
AN INCREASE IN THE VALUE OF THE APPLICABLE UNDERLYING STOCK WILL NOT INCREASE
THE RETURN ON YOUR INVESTMENT
Owning a Security linked to an Underlying Stock is not the same as owning
such Underlying Stock. Accordingly, the market value of your Securities may not
have a direct relationship with the market price of the applicable Underlying
Stock, and changes in the market price of the applicable Underlying Stock may
not result in a comparable change in the market value of your Securities. If the
price per share of applicable Underlying Stock increases above the applicable
initial price, the market value of the Securities may not increase. It is also
possible for the price per share of applicable Underlying Stock to increase
while the market price of the Securities declines.
WE MAY NOT BE ABLE TO DELIVER SHARES OF THE APPLICABLE UNDERLYING STOCK AT
MATURITY
If due to events beyond our reasonable control, as determined by us in our
sole discretion, shares of the applicable Underlying Stock are not available for
delivery at maturity we may pay you cash in lieu of delivering such Underlying
Stock. In such a case, the amount of cash we will deliver will be an amount
calculated by multiplying the Stock Redemption Amount by the Closing Price of
the shares of the applicable Underlying Stock on the determination date.
Accordingly, if you have sold shares of such Underlying Stock and your sale is
to settle on the maturity date or you have otherwise agreed to deliver shares of
such Underlying Stock on the maturity date, your trade may fail in the event we
do not deliver shares of the applicable Underlying Stock to you.
POTENTIAL CONFLICTS OF INTEREST; NO SECURITY INTEREST IN THE UNDERLYING STOCK
HELD BY US
We and our affiliates may carry out hedging activities that minimize our
risks related to the Securities, including trading in the Underlying Shares. In
particular, on or prior to the date of this Pricing Supplement, we, through our
affiliates, hedged our anticipated exposure in connection with the Securities by
taking positions in the Underlying Shares, options contracts on Underlying
Shares listed on major securities markets, and/or other instruments that we
deemed appropriate in connection with such hedging. Our purchase activity,
however, could potentially have increased the initial price of the Underlying
Shares, and therefore increased the knock-in level, below which we would be
required to deliver to you at maturity Underlying Shares, which, in turn, would
have a value less than the principal amount of your Securities.
Through our affiliates, we are likely to modify our hedge position
throughout the life of the Securities by purchasing and selling Underlying
Shares, options contracts on Underlying Shares listed on major securities
markets or positions in other securities or instruments that we may wish to use
in connection with such hedging. We cannot give you any assurance that we have
not or will not affect such price as a result of our hedging or trading
activities. Such hedging or trading activities during the term of the Securities
could adversely affect whether the price of the Underlying Shares decreases
below the Knock-in Level and therefore, whether or not you will receive the
stated principal amount of the Securities or Underlying Shares at maturity. It
is possible that we or one of more of our affiliates could receive substantial
returns from these hedging activities while the value of the Securities may
decline. We or one or more of our affiliates may also engage in trading the
Underlying Shares and other investments relating to Caterpillar on a regular
basis as part of our or its general broker-dealer and other businesses, for
proprietary accounts, for other accounts under management or to facilitate
transactions for customers, including block transactions. Any of these
activities could adversely affect the price of the Underlying Shares and,
therefore, the value of the Securities. We or one or more of our affiliates may
also issue or underwrite other securities or financial or derivative instruments
with returns linked or related to changes in the value of the Underlying Shares.
By introducing competing products into the marketplace in this manner, we or one
or more of our affiliates could adversely effect the value of the Securities. It
is also possible that any advisory services that we or our affiliates provide in
the course of any business with Caterpillar or its affiliates could lead to
actions on the part of the issuer of the stock which might adversely affect the
value of the Underlying Shares.
PS-11
The indenture governing the Securities does not contain any restrictions on
our ability or the ability of any of our affiliates to sell, pledge or otherwise
convey all or any portion of the Underlying Stocks acquired by us or our
affiliates. Neither we nor Holding nor any of our affiliates will pledge or
otherwise hold any Underlying Stock for the benefit of holders of the Securities
in order to enable the holders to exchange their Securities for shares of the
applicable Underlying Stock under any circumstances. Consequently, in the event
of a bankruptcy, insolvency or liquidation involving us or Holding, as the case
may be, any Underlying Stock that we or Holding own will be subject to the
claims of our creditors or Holding's creditors generally and will not be
available specifically for the benefit of the holders of the Securities.
NO SHAREHOLDER RIGHTS IN THE UNDERLYING STOCK
As a holder of the Securities, you will not have voting rights or rights to
receive dividends or other distributions or other rights that holders of any
Underlying Stock would have.
Because neither we nor Holding nor any of our affiliates are affiliated
with any of the issuers of the Underlying Stocks, we have no ability to control
or predict the actions of such issuers, including any corporate actions of the
type that would require the calculation agent to adjust the applicable initial
price and consequently the applicable knock-in level and applicable stock
redemption amount, and have no ability to control the public disclosure of these
corporate actions or any other events or circumstances affecting such issuers.
THE ISSUERS OF THE UNDERLYING STOCKS ARE NOT INVOLVED IN THE OFFER OF THE
SECURITIES IN ANY WAY AND HAVE NO OBLIGATION TO CONSIDER YOUR INTEREST AS AN
OWNER OF THE SECURITIES IN TAKING ANY CORPORATE ACTIONS THAT MIGHT AFFECT THE
VALUE OF YOUR SECURITIES. NONE OF THE MONEY YOU PAY FOR THE SECURITIES WILL GO
TO ANY OF THE ISSUERS OF THE UNDERLYING STOCKS.
INFORMATION REGARDING THE ISSUERS OF THE UNDERLYING STOCKS
Neither we nor Holding nor any of our affiliates assume any responsibility
for the adequacy of the information about the issuers of the Underlying Stocks
contained in this Pricing Supplement or in any of such issuers' publicly
available filings. AS AN INVESTOR IN THE SECURITIES, YOU SHOULD MAKE YOUR OWN
INVESTIGATION INTO THESE ISSUERS. NEITHER WE NOR HOLDING NOR ANY OF OUR
AFFILIATES HAVE ANY AFFILIATION WITH THE ISSUERS OF THE UNDERLYING STOCKS, AND
ARE NOT RESPONSIBLE FOR SUCH ISSUERS' PUBLIC DISCLOSURE OF INFORMATION, WHETHER
CONTAINED IN SEC FILINGS OR OTHERWISE. We do not have any material non-public
information about such issuers as of the date of this Pricing Supplement
although we or our subsidiaries may currently or from time to time engage in
business with such issuers, including extending loans to, or making equity
investments in, or providing investment advisory services to such issuers,
including merger and acquisition advisory services.
LIMITED ANTIDILUTION PROTECTION
As calculation agent, AAI, which is our affiliate, will adjust the initial
price and consequently the stock redemption amount and knock-in level for
certain events affecting an Underlying Stock, such as stock splits and corporate
actions. The calculation agent is not required to make an adjustment for every
corporate action which affects an Underlying Stock. For example, the calculation
agent is not required to make any adjustments if the issuer of an Underlying
Stock or anyone else makes a partial tender or partial exchange offer for such
Underlying Stock. IF AN EVENT OCCURS THAT DOES NOT REQUIRE THE CALCULATION AGENT
TO ADJUST THE AMOUNT OF SHARES OF THE APPLICABLE UNDERLYING STOCK PAYABLE AT
MATURITY, THE MARKET PRICE OF THE SECURITIES MAY BE MATERIALLY AND ADVERSELY
AFFECTED.
HOLDINGS OF THE SECURITIES BY OUR AFFILIATES AND FUTURE SALES
Certain of our affiliates have agreed to purchase for investment the
portion of the Securities that has not been purchased by investors in each of
these offerings, which initially they intend to hold for investment purposes. As
a result, upon completion of these offerings, our affiliates may own a
substantial portion of the aggregate principal amount of each offering of
Securities. Circumstances may occur in which our interests or those of our
affiliates could be in conflict with your interests. For example, our affiliates
may attempt to sell the Securities that they had been holding for investment
purposes at the same time that you attempt to sell your Securities, which could
depress the price, if any, at which you can sell your Securities. Moreover, the
liquidity of the market for the Securities, if any, could be substantially
reduced as a result of our affiliates holding the Securities. See "--The
Securities Will
PS-12
Not be Listed on any Securities Exchange; Secondary Trading May Be Limited." In
addition, our affiliates could have substantial influence over any matter
subject to consent of the security holders.
POTENTIAL CONFLICTS OF INTEREST BETWEEN HOLDERS OF SECURITIES AND THE
CALCULATION AGENT
As calculation agent, AAI, which is our affiliate, will calculate the
payout to you at maturity of the Securities. AAI and other affiliates may carry
out hedging activities related to the Securities, including trading in the
Underlying Stocks, as well as in other instruments related to the Underlying
Stocks. AAI and some of our other affiliates also trade the Underlying Stocks on
a regular basis as part of their general broker dealer businesses. Any of these
activities could influence AAI's determinations as calculation agent and any
such trading activity could potentially affect the price of the Underlying
Stocks and, accordingly could affect the payout on the Securities. AAI IS AN
AFFILIATE OF ABN AMRO BANK N.V.
In addition, if certain reorganization events occur as defined under
"Description of Securities--Adjustment Events" the calculation agent may adjust
the applicable initial price and consequently the applicable knock-in level and
applicable stock redemption amount to reflect the new securities issued in such
reorganization event. The calculation agent may make such adjustment based on
its assessment of the market value and volatility of those new securities, which
may adversely affect the value of the Securities. The calculation agent's
adjustment to the Securities may be influenced by, among other things, our or
our affiliates' hedging transactions with respect to the Securities and our or
their ability to hedge our obligations under the Securities following those
reorganization events. There can be no assurance that a reorganization event
will not occur or that the calculation agent's adjustments upon a reorganization
event will not adversely affect the value of the Securities.
Moreover, the issue price of the Securities includes the agents'
commissions and certain costs of hedging our obligations under the Securities.
Our affiliates through which we hedge our obligations under the Securities
expect to make a profit. Since hedging our obligations entails risk and may be
influenced by market forces beyond our affiliates' control, such hedging may
result in a profit that is more or less than initially projected.
TAX TREATMENT
You should also consider the tax consequences of investing in the
Securities. Significant aspects of the tax treatment of the Securities are
uncertain. We do not plan to request a ruling from the U.S. Internal Revenue
Service (the "IRS") or from the Dutch authorities regarding the tax treatment of
the Securities, and the IRS, the Dutch authorities or a court may not agree with
the tax treatment described in the accompanying Prospectus Supplement. Please
read carefully the sections entitled "United States Federal Taxation" (and in
particular the subsection entitled "--Mandatorily Exchangeable Notes--Reverse
Exchangeable and Knock-in Reverse Exchangeable Securities") and "Taxation in the
Netherlands" in the accompanying Prospectus Supplement. You should consult your
tax advisor about your own situation.
PS-13
THE UNDERLYING STOCKS
PUBLIC INFORMATION
The Underlying Stocks are registered under the Exchange Act. Companies with
securities registered under the Exchange Act are required periodically to file
certain financial and other information specified by the Commission. Information
provided to or filed with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at the SEC Headquarters
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 (tel:
202-551-8090), and at the Commission's regional offices at Northeast Regional
Office, 3 World Financial Center, Suite 400, New York, New York 10281 (tel:
212-336-1100) and Midwest Regional Office, 175 W. Jackson Boulevard, Suite 900,
Chicago, Illinois 60604. Copies of this material can also be obtained from the
Public Reference Room of the Commission at 100 F Street, N.E., Washington, D.C.
20549 at prescribed rates. Please call the Commission at 1-800-SEC-0330 for
further information about the Public Reference Room. In addition, information
provided to or filed with the Commission electronically can be accessed through
a website maintained by the Commission. The address of the Commission's website
is http://www.sec.gov. Information provided to or filed with the Commission by
the Underlying Stocks issuers pursuant to the Exchange Act can be located by
reference to the SEC file number provided below.
In addition, information regarding the Underlying Stocks issuers may be
obtained from other sources including, but not limited to, press releases,
newspaper articles and other publicly disseminated documents. We make no
representation or warranty as to the accuracy or completeness of such reports.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE SECURITIES OFFERED HEREBY AND
DOES NOT RELATE TO THE UNDERLYING STOCKS OR OTHER SECURITIES OF THE UNDERLYING
STOCKS ISSUERS. WE HAVE DERIVED ALL DISCLOSURES CONTAINED IN THIS PRICING
SUPPLEMENT REGARDING THE UNDERLYING STOCKS ISSUERS FROM THE PUBLICLY AVAILABLE
DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH. NEITHER WE NOR HOLDING NOR THE
AGENTS HAVE PARTICIPATED IN THE PREPARATION OF SUCH DOCUMENTS OR MADE ANY DUE
DILIGENCE INQUIRY WITH RESPECT TO THE UNDERLYING STOCKS ISSUERS IN CONNECTION
WITH THE OFFERING OF THE SECURITIES. NEITHER WE NOR HOLDING NOR THE AGENTS MAKE
ANY REPRESENTATION THAT SUCH PUBLICLY AVAILABLE DOCUMENTS OR ANY OTHER PUBLICLY
AVAILABLE INFORMATION REGARDING THE UNDERLYING STOCKS ISSUERS ARE ACCURATE OR
COMPLETE. FURTHERMORE, NEITHER WE NOR HOLDING CAN GIVE ANY ASSURANCE THAT ALL
EVENTS OCCURRING PRIOR TO THE DATE HEREOF (INCLUDING EVENTS THAT WOULD AFFECT
THE ACCURACY OR COMPLETENESS OF THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN
THE PRECEDING PARAGRAPH) THAT WOULD AFFECT THE TRADING PRICE OF THE UNDERLYING
STOCKS (AND THEREFORE THE APPLICABLE INITIAL PRICE AND THE APPLICABLE KNOCK-IN
LEVEL AND STOCK REDEMPTION AMOUNT) HAVE BEEN PUBLICLY DISCLOSED. SUBSEQUENT
DISCLOSURE OF ANY SUCH EVENTS OR THE DISCLOSURE OF OR FAILURE TO DISCLOSE
MATERIAL FUTURE EVENTS CONCERNING THE UNDERLYING STOCKS ISSUERS COULD AFFECT THE
VALUE YOU WILL RECEIVE ON THE MATURITY DATE WITH RESPECT TO THE SECURITIES AND
THEREFORE THE TRADING PRICES OF THE SECURITIES. NEITHER WE NOR HOLDING NOR ANY
OF OUR AFFILIATES HAVE ANY OBLIGATION TO DISCLOSE ANY INFORMATION ABOUT THE
UNDERLYING STOCKS ISSUERS AFTER THE DATE OF THIS PRICING SUPPLEMENT.
NEITHER WE NOR HOLDING NOR ANY OF OUR AFFILIATES MAKES ANY REPRESENTATION
TO YOU AS TO THE PERFORMANCE OF THE UNDERLYING STOCKS.
We and/or our affiliates may presently or from time to time engage in
business with the Underlying Stock issuers, including extending loans to, or
making equity investments in, or providing advisory services to the Underlying
Stocks issuers, including merger and acquisition advisory services. In the
course of such business, we and/or our affiliates may acquire non-public
information with respect to the Underlying Stocks issuers and, in addition, one
or more of our affiliates may publish research reports with respect to the
Underlying Stocks issuers. The statement in the preceding sentence is not
intended to affect the rights of holders of the Securities under the securities
laws. AS A PROSPECTIVE PURCHASER OF A SECURITY, YOU SHOULD UNDERTAKE SUCH
INDEPENDENT INVESTIGATION OF THE UNDERLYING STOCKS ISSUERS AS IN YOUR JUDGMENT
IS APPROPRIATE TO MAKE AN INFORMED DECISION WITH RESPECT TO AN INVESTMENT IN THE
UNDERLYING STOCKS.
Neither we nor Holding make any representation as to the amount of
dividends, if any, that any of the Underlying Stock issuers will pay in the
future. In any event, as a holder of a Security, you will not be entitled to
receive dividends, if any, that may be payable on any of the Underlying Stocks.
PS-14
JPMORGAN CHASE & CO.
According to publicly available documents, JPMorgan Chase & Co., which we
refer to as "JPMorgan," is a financial holding company that through its bank and
non-bank subsidiaries provides retail and commercial banking services as well as
investment banking services. JPMorgan's SEC file number is 1-5805.
HISTORICAL INFORMATION
The common stock of JPMorgan is traded on the NYSE under the symbol "JPM".
The following table sets forth the published highest intra-day price for the
quarter, lowest intra-day price for the quarter and last day closing price for
the quarter of the common stock of JPMorgan since 2004. The closing price for
each share of common stock on March 13, 2009 was $23.75. We obtained the prices
listed below from Bloomberg Financial Markets without independent verification.
You should not take the historical prices of the common stock of JPMorgan as an
indication of future performance. NEITHER WE NOR HOLDING CAN GIVE ANY ASSURANCE
THAT THE PRICE OF JPMORGAN'S COMMON STOCK WILL NOT DECREASE, SUCH THAT WE WILL
DELIVER SHARES OF COMMON STOCK OF JPMORGAN AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $43.84 $36.31 $41.95
Second Quarter......................... $42.56 $34.62 $38.77
Third Quarter.......................... $40.25 $35.50 $39.73
Fourth Quarter......................... $40.45 $36.35 $39.01
2005
First Quarter.......................... $39.65 $34.35 $34.60
Second Quarter......................... $36.49 $33.36 $35.32
Third Quarter.......................... $35.95 $33.32 $33.93
Fourth Quarter ........................ $40.56 $32.98 $39.69
2006
First Quarter.......................... $42.42 $37.88 $41.64
Second Quarter......................... $46.80 $39.34 $42.00
Third Quarter ......................... $47.49 $40.40 $46.96
Fourth Quarter......................... $49.00 $45.51 $48.30
2007
First Quarter.......................... $51.95 $45.91 $48.38
Second Quarter......................... $53.25 $47.70 $48.45
Third Quarter ......................... $50.48 $42.18 $45.82
Fourth Quarter......................... $48.02 $40.15 $43.65
2008
First Quarter.......................... $49.28 $36.02 $42.95
Second Quarter......................... $49.75 $33.96 $34.31
Third Quarter.......................... $48.35 $29.25 $46.70
Fourth Quarter......................... $50.50 $19.69 $31.53
2009
First Quarter
(through March 13, 2009)....... $31.64 $14.96 $23.75
PS-15
TARGET CORPORATION
According to publicly available documents, Target Corporation, which we
refer to as "Target," operates large-format general merchandise and food
discount stores in the United States, which include Target and SuperTarget
stores. Target's SEC file number is 1-6049.
HISTORICAL INFORMATION
The common stock of Target is traded on the NYSE under the symbol "TGT".
The following table sets forth the published highest intra-day price for the
quarter, lowest intra-day price for the quarter and last day closing price for
the quarter of the common stock of Target since 2004. The closing price for each
share of common stock on March 13, 2009 was $29.97. We obtained the prices
listed below from Bloomberg Financial Markets without independent verification.
You should not take the historical prices of the common stock of Target as an
indication of future performance. NEITHER WE NOR HOLDING CAN GIVE ANY ASSURANCE
THAT THE PRICE OF TARGET COMPANY'S COMMON STOCK WILL NOT DECREASE, SUCH THAT WE
WILL DELIVER SHARES OF COMMON STOCK OF TARGET AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $45.85 $36.65 $45.04
Second Quarter......................... $46.89 $41.25 $42.47
Third Quarter.......................... $46.90 $40.03 $45.25
Fourth Quarter......................... $54.14 $45.30 $51.93
2005
First Quarter.......................... $53.20 $47.76 $50.02
Second Quarter......................... $56.24 $45.55 $54.41
Third Quarter.......................... $60.00 $49.93 $51.93
Fourth Quarter ........................ $59.01 $50.78 $54.97
2006
First Quarter.......................... $55.85 $51.93 $52.01
Second Quarter......................... $55.13 $47.26 $48.87
Third Quarter ......................... $56.67 $44.85 $55.25
Fourth Quarter......................... $60.31 $54.60 $57.05
2007
First Quarter.......................... $64.73 $56.61 $59.26
Second Quarter......................... $65.07 $56.80 $63.60
Third Quarter ......................... $70.75 $56.06 $63.57
Fourth Quarter......................... $68.50 $48.85 $50.00
2008
First Quarter.......................... $57.32 $47.25 $50.68
Second Quarter......................... $55.71 $46.34 $46.49
Third Quarter.......................... $59.22 $42.34 $49.05
Fourth Quarter......................... $48.75 $25.60 $34.53
2009
First Quarter
(through March 13, 2009)......... $38.60 $25.00 $29.97
PS-16
ARCHER-DANIELS-MIDLAND COMPANY
According to publicly available documents, Archer-Daniels-Midland Company,
which we refer to as "Archer-Daniels" is engaged in procuring, transporting,
storing, processing and merchandising agricultural commodities and products.
Archer Daniels SEC file number is 1-44.
HISTORICAL INFORMATION
The common stock of Archer-Daniels is traded on the NYSE under the symbol
"ADM". The following table sets forth the published highest intra-day price for
the quarter, lowest intra-day price for the quarter and last day closing price
for the quarter of the common stock of Archer-Daniels since 2004. The closing
price for each share of common stock on March 13, 2009 was $27.81. We obtained
the prices listed below from Bloomberg Financial Markets without independent
verification. You should not take the historical prices of the common stock of
Archer-Daniels as an indication of future performance. NEITHER WE NOR HOLDING
CAN GIVE ANY ASSURANCE THAT THE PRICE OF ARCHER-DANIELS'S COMMON STOCK WILL NOT
DECREASE, SUCH THAT WE WILL DELIVER SHARES OF COMMON STOCK OF ARCHER-DANIELS AT
MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $17.83 $14.90 $16.87
Second Quarter......................... $17.95 $16.05 $16.78
Third Quarter.......................... $17.00 $14.95 $16.98
Fourth Quarter......................... $22.55 $16.72 $22.31
2005
First Quarter.......................... $25.37 $21.35 $24.58
Second Quarter......................... $25.30 $17.60 $21.38
Third Quarter.......................... $24.75 $20.44 $24.66
Fourth Quarter ........................ $25.55 $23.24 $24.66
2006
First Quarter.......................... $35.50 $24.05 $33.65
Second Quarter......................... $46.70 $34.60 $41.28
Third Quarter ......................... $45.04 $36.50 $37.88
Fourth Quarter......................... $40.00 $31.20 $31.96
2007
First Quarter.......................... $37.83 $30.46 $36.70
Second Quarter......................... $39.65 $32.06 $33.09
Third Quarter ......................... $37.02 $31.29 $33.08
Fourth Quarter......................... $47.33 $32.43 $46.43
2008
First Quarter.......................... $47.18 $38.25 $41.16
Second Quarter......................... $48.95 $31.65 $33.75
Third Quarter.......................... $33.75 $19.70 $21.91
Fourth Quarter......................... $29.08 $13.53 $28.83
2009
First Quarter
(through March 13, 2009)........ $29.49 $24.09 $27.81
PS-17
FREEPORT-MCMORAN COPPER & GOLD INC.
According to publicly available documents, Freeport-McMoRan Copper & Gold
Inc., which we refer to as "Freeport-McMoRan," is a copper, gold, and molybdenum
mining company. Freeport-McMoRan's SEC file number is 1-9916.
HISTORICAL INFORMATION
The common stock of Freeport-McMoRan is traded on the NYSE under the symbol
"FCX". The following table sets forth the published highest intra-day price for
the quarter, lowest intra-day price for the quarter and last day closing price
for the quarter of the common stock of Freeport-McMoRan since 2004. The closing
price for each share of common stock on March 13, 2009 was $37.04. We obtained
the prices listed below from Bloomberg Financial Markets without independent
verification. You should not take the historical prices of the common stock of
Freeport-McMoRan as an indication of future performance. NEITHER WE NOR HOLDING
CAN GIVE ANY ASSURANCE THAT THE PRICE OF FREEPORT-MCMORAN'S COMMON STOCK WILL
NOT DECREASE, SUCH THAT WE WILL DELIVER SHARES OF COMMON STOCK OF
FREEPORT-MCMORAN AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $ 40.46 $31.63 $ 35.22
Second Quarter......................... $ 35.91 $25.16 $ 29.87
Third Quarter.......................... $ 37.96 $28.42 $ 36.49
Fourth Quarter......................... $ 38.34 $30.62 $ 34.68
2005
First Quarter.......................... $ 39.82 $31.86 $ 36.37
Second Quarter......................... $ 37.02 $28.94 $ 34.38
Third Quarter.......................... $ 45.95 $34.09 $ 45.13
Fourth Quarter ........................ $ 52.34 $40.68 $ 50.43
2006
First Quarter.......................... $ 60.92 $44.16 $ 56.59
Second Quarter......................... $ 68.36 $41.46 $ 53.30
Third Quarter ......................... $ 59.92 $45.77 $ 51.96
Fourth Quarter ........................ $ 62.14 $46.44 $ 55.73
2007
First Quarter ......................... $ 67.19 $48.98 $ 66.19
Second Quarter......................... $ 85.50 $65.62 $ 82.82
Third Quarter ......................... $110.48 $67.08 $104.89
Fourth Quarter......................... $120.20 $85.71 $102.44
2008
First Quarter.......................... $107.37 $69.10 $ 96.22
Second Quarter......................... $127.23 $93.00 $117.19
Third Quarter.......................... $117.08 $51.24 $ 56.85
Fourth Quarter......................... $ 56.20 $15.70 $ 24.44
2009
First Quarter
(through March 13, 2009).......... $ 38.00 $21.17 $ 37.04
PS-18
CHINA MOBILE LIMITED
According to publicly available documents, China Mobile Limited, which we
refer to as "China Mobile," offers mobile telecommunications services
principally using the Global System for Mobile Communications (GSM) standard.
China Mobile's SEC file number is 1-14696.
HISTORICAL INFORMATION
The American Depositary Shares of China Mobile Limited are traded on the
NYSE under the symbol "CHL". The following table sets forth the published
highest intra-day price for the quarter, lowest intra-day price for the quarter
and last day closing price for the quarter of the American Depositary Shares of
China Mobile since 2004, when they were first listed. The closing price for each
American Depositary Share on March 13, 2009 was $44.45. We obtained the prices
listed below from Bloomberg Financial Markets without independent verification.
You should not take the historical prices of the American Depositary Shares of
China Mobile as an indication of future performance. NEITHER WE NOR HOLDING CAN
GIVE ANY ASSURANCE THAT THE PRICE OF CHINA MOBILE'S AMERICAN DEPOSITARY SHARES
WILL NOT DECREASE, SUCH THAT WE WILL DELIVER AMERICAN DEPOSITARY SHARES OF CHINA
MOBILE AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $ 18.18 $13.95 $14.64
Second Quarter......................... $ 15.17 $12.12 $15.10
Third Quarter.......................... $ 15.86 $13.45 $15.24
Fourth Quarter......................... $ 17.40 $14.16 $17.10
2005
First Quarter.......................... $ 17.29 $14.84 $16.35
Second Quarter......................... $ 19.16 $16.09 $18.52
Third Quarter.......................... $ 24.78 $17.49 $24.55
Fourth Quarter ........................ $ 25.70 $21.32 $23.95
2006
First Quarter.......................... $ 26.98 $22.62 $26.44
Second Quarter......................... $ 30.89 $24.35 $28.50
Third Quarter ......................... $ 36.18 $27.70 $35.28
Fourth Quarter......................... $ 45.18 $35.41 $43.14
2007
First Quarter.......................... $ 51.68 $40.78 $44.76
Second Quarter......................... $ 54.65 $44.58 $53.85
Third Quarter ......................... $ 84.40 $48.62 $82.03
Fourth Quarter......................... $103.99 $78.30 $86.86
2008
First Quarter.......................... $ 89.99 $65.18 $75.00
Second Quarter......................... $ 90.01 $65.52 $66.95
Third Quarter ......................... $ 71.70 $43.78 $50.08
Fourth Quarter......................... $ 55.39 $34.39 $50.85
2009
First Quarter
(through March 13, 2009)........ $ 55.25 $40.36 $44.45
PS-19
PETROCHINA COMPANY LIMITED
According to publicly available documents, PetroChina Company Limited,
which we refer to as "PetroChina," is engaged in a broad range of petroleum and
natural gas related activities, including the exploration, development,
production and sale of crude oil and natural gas. PetroChina's SEC file number
is 1-15006.
HISTORICAL INFORMATION
The American Depositary Shares of PetroChina are traded on the NYSE under
the symbol "PTR". The following table sets forth the published highest intra-day
price for the quarter, lowest intra-day price for the quarter and last day
closing price for the quarter of the American Depositary Shares of PetroChina
since 2004, when they were first listed. The closing price for each American
Depositary Share on March 13, 2009 was $74.70. We obtained the prices listed
below from Bloomberg Financial Markets without independent verification. You
should not take the historical prices of the American Depositary Shares of
Caterpillar as an indication of future performance. NEITHER WE NOR HOLDING CAN
GIVE ANY ASSURANCE THAT THE PRICE OF PETROCHINA'S AMERICAN DEPOSITARY SHARES
WILL NOT DECREASE, SUCH THAT WE WILL DELIVER AMERICAN DEPOSITARY SHARES OF
PETROCHINA AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $ 63.70 $ 46.90 $ 51.10
Second Quarter......................... $ 51.28 $ 41.28 $ 46.30
Third Quarter.......................... $ 53.90 $ 45.76 $ 53.76
Fourth Quarter......................... $ 57.12 $ 51.99 $ 53.69
2005
First Quarter.......................... $ 65.70 $ 51.05 $ 63.22
Second Quarter......................... $ 74.95 $ 59.25 $ 73.45
Third Quarter.......................... $ 95.60 $ 73.64 $ 83.37
Fourth Quarter......................... $ 84.22 $ 72.44 $ 81.96
2006
First Quarter.......................... $105.84 $ 82.46 $104.95
Second Quarter......................... $122.82 $ 89.85 $107.97
Third Quarter.......................... $117.42 $103.78 $107.65
Fourth Quarter ........................ $142.60 $103.04 $140.78
2007
First Quarter.......................... $141.40 $108.20 $117.09
Second Quarter......................... $152.05 $112.11 $148.68
Third Quarter ......................... $189.52 $121.09 $185.11
Fourth Quarter......................... $266.81 $170.63 $175.47
2008
First Quarter.......................... $182.97 $114.52 $125.31
Second Quarter......................... $158.49 $125.32 $128.86
Third Quarter ......................... $138.64 $ 92.79 $102.73
Fourth Quarter......................... $105.50 $ 56.81 $ 88.98
2009
First Quarter
(through March 13, 2009).......... $103.29 $ 63.95 $ 74.70
PS-20
CATERPILLAR INC.
According to publicly available documents, Caterpillar Inc., which we refer
to as "Caterpillar," is a producer of construction and mining equipment, diesel
and natural gas engines and industrial gas turbines. Caterpillar is also a
services provider through Caterpillar Financial Services, Caterpillar Logistics
Services and Caterpillar Remanufacturing Services. Caterpillar's SEC file number
is 1-768.
HISTORICAL INFORMATION
The common stock of Caterpillar is traded on the NYSE under the symbol
"CAT". The following table sets forth the published highest intra-day price for
the quarter, lowest intra-day price for the quarter and last day closing price
for the quarter of the common stock of Caterpillar since 2004. The closing price
for each share of common stock on March 13, 2009 was $26.78. We obtained the
prices listed below from Bloomberg Financial Markets without independent
verification. You should not take the historical prices of the common stock of
Caterpillar as an indication of future performance. NEITHER WE NOR HOLDING CAN
GIVE ANY ASSURANCE THAT THE PRICE OF CATERPILLAR'S COMMON STOCK WILL NOT
DECREASE, SUCH THAT WE WILL DELIVER SHARES OF COMMON STOCK OF CATERPILLAR AT
MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $42.72 $36.26 $39.54
Second Quarter......................... $42.38 $36.01 $39.72
Third Quarter ......................... $40.65 $34.25 $40.23
Fourth Quarter......................... $49.36 $38.40 $48.76
2005
First Quarter.......................... $49.98 $43.22 $45.72
Second Quarter......................... $51.49 $41.35 $47.66
Third Quarter.......................... $59.87 $47.43 $58.75
Fourth Quarter ........................ $59.84 $48.30 $57.77
2006
First Quarter.......................... $77.20 $57.05 $71.81
Second Quarter......................... $82.00 $64.41 $74.48
Third Quarter ......................... $75.43 $62.09 $65.80
Fourth Quarter......................... $70.91 $58.85 $61.33
2007
First Quarter.......................... $68.43 $57.98 $67.03
Second Quarter......................... $82.88 $65.87 $78.30
Third Quarter.......................... $87.00 $70.59 $78.43
Fourth Quarter ........................ $82.74 $67.00 $72.56
2008
First Quarter.......................... $78.62 $60.01 $78.29
Second Quarter......................... $85.96 $72.56 $73.82
Third Quarter ......................... $75.87 $58.11 $59.60
Fourth Quarter......................... $58.18 $32.00 $44.67
2009
First Quarter
(through March 13, 2009).......... $47.05 $21.72 $26.78
PS-21
APPLE INC.
According to publicly available documents, Apple Inc., which we refer to as
"Apple," designs, manufactures, and markets personal computers, portable digital
music players, and mobile communication devices and sells a variety of related
software services, peripherals, and networking solutions. Apple's SEC file
number is 000-10030.
HISTORICAL INFORMATION
The common stock of Apple is traded on the NADSAQ Global Select Market
under the symbol "AAPL". The following table sets forth the published highest
intra-day price for the quarter, lowest intra-day price for the quarter and last
day closing price for the quarter of the common stock of Apple since 2004. The
closing price for each share of common stock on March 13, 2009 was $95.93. We
obtained the prices listed below from Bloomberg Financial Markets without
independent verification. You should not take the historical prices of the
common stock of Apple as an indication of future performance. NEITHER WE NOR
HOLDING CAN GIVE ANY ASSURANCE THAT THE PRICE OF APPLE'S COMMON STOCK WILL NOT
DECREASE, SUCH THAT WE WILL DELIVER SHARES OF COMMON STOCK OF APPLE AT MATURITY.
PERIOD HIGH LOW LAST DAY
------ INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2004
First Quarter.......................... $ 14.07 $ 10.59 $ 13.53
Second Quarter......................... $ 17.10 $ 12.75 $ 16.27
Third Quarter ......................... $ 19.64 $ 14.37 $ 19.38
Fourth Quarter......................... $ 34.79 $ 18.83 $ 32.20
2005
First Quarter.......................... $ 45.44 $ 31.30 $ 41.67
Second Quarter......................... $ 44.44 $ 33.11 $ 36.81
Third Quarter.......................... $ 54.56 $ 36.29 $ 53.61
Fourth Quarter ........................ $ 75.46 $ 47.87 $ 71.89
2006
First Quarter.......................... $ 87.05 $ 57.67 $ 62.72
Second Quarter......................... $ 73.38 $ 55.41 $ 57.12
Third Quarter ......................... $ 77.78 $ 50.35 $ 77.03
Fourth Quarter......................... $ 93.15 $ 72.60 $ 84.84
2007
First Quarter.......................... $ 97.80 $ 81.90 $ 92.91
Second Quarter......................... $127.60 $ 89.60 $122.04
Third Quarter.......................... $155.00 $111.62 $153.54
Fourth Quarter ........................ $202.96 $150.64 $198.08
2008
First Quarter.......................... $200.20 $115.44 $143.50
Second Quarter......................... $192.24 $144.54 $167.44
Third Quarter ......................... $180.91 $100.61 $113.66
Fourth Quarter......................... $116.40 $ 79.16 $ 85.35
2009
First Quarter
(through March 13, 2009)....... $103.00 $ 78.20 $ 95.93
PS-22
HYPOTHETICAL RETURN ANALYSIS OF THE SECURITIES AT MATURITY
The following tables set out the total return to maturity of a $1,000
investment in a hypothetical Knock-In Reverse Exchangeable security linked to
the common stock of XYZ Corporation, a hypothetical underlying common stock,
based on the assumptions outlined below and several variables, which include (a)
whether the closing price of the hypothetical underlying stock has fallen below
the hypothetical knock-in level on any trading day during the Knock-in Period
and (b) several hypothetical closing prices for the hypothetical underlying
stock on the determination date. The information in the tables is based on
hypothetical market values. We cannot predict the market price or the closing
price of any underlying stock on the determination date or at any time during
the life of the Securities. THE ASSUMPTIONS EXPRESSED BELOW ARE FOR ILLUSTRATIVE
PURPOSES ONLY AND DO NOT CORRESPOND TO ANY OF THE UNDERLYING STOCKS TO WHICH THE
SECURITIES ARE LINKED. EACH UNDERLYING STOCK WILL HAVE ITS OWN INITIAL PRICE,
KNOCK-IN LEVEL AND INTEREST RATE.
ASSUMPTIONS
Hypothetical underlying
stock: Common stock of XYZ Corporation
Hypothetical initial price: $45.00
Hypothetical knock-in level: $36.00 (80% of the hypothetical initial price)
Hypothetical annual interest
on the security: 12.00% per annum or 3.00% over the life of the
hypothetical security
Hypothetical term of
the Security: 3 months
Hypothetical exchange factor: 1.0 (we have assumed that no market disruption
event occurs and the calculation agent does not
need to adjust the exchange factor for any
adjustment events during the term of the
Securities).
PAYMENT AT MATURITY IF THE CLOSING PRICE OF THE HYPOTHETICAL UNDERLYING STOCK
FALLS BELOW THE HYPOTHETICAL KNOCK-IN LEVEL ON ANY TRADING DAY DURING THE
KNOCK-IN PERIOD:
------------------------ --------------------- -------------------------- ------------------------------------------
HYPOTHETICAL TOTAL
HYPOTHETICAL XYZ INTEREST HYPOTHETICAL TOTAL RETURN(b)
CORPORATION CLOSING HYPOTHETICAL VALUE (PAYABLE IN THREE OVER THE LIFE OF THE SECURITY
PRICE ON DETERMINATION OF PAYMENT AT MONTHLY INTEREST -------------------- ---------------------
DATE MATURITY(a) PAYMENTS)(c) $ %
------------------------ --------------------- -------------------------- -------------------- ---------------------
$45.00 or greater $1,000.00 $30.00 $1,030.00 3.00%
$43.88 $ 975.10 $30.00 $1,005.10 0.51%
$42.75 $ 949.99 $30.00 $ 979.99 -2.00%
$41.85 $ 929.99 $30.00 $ 959.99 -4.00%
$39.97 $ 888.21 $30.00 $ 918.21 -8.18%
$37.97 $ 843.77 $30.00 $ 873.77 -12.62%
$30.38 $ 675.10 $30.00 $ 705.10 -29.49%
$21.27 $ 472.66 $30.00 $ 502.66 -49.73%
$10.64 $ 236.44 $30.00 $ 266.44 -73.36%
$ 5.32 $ 118.22 $30.00 $ 148.22 -85.18%
$ 0.00 $ 0.00 $30.00 $ 30.00 -97.00%
------------------------ --------------------- -------------------------- -------------------- ---------------------
PS-23
PAYMENT AT MATURITY IF THE CLOSING PRICE OF THE HYPOTHETICAL UNDERLYING STOCK
NEVER FALLS BELOW THE HYPOTHETICAL KNOCK-IN LEVEL ON ANY TRADING DAY DURING THE
KNOCK-IN PERIOD:
------------------------ --------------------- -------------------------- ------------------------------------------
HYPOTHETICAL TOTAL
HYPOTHETICAL XYZ INTEREST HYPOTHETICAL TOTAL RETURN(b)
CORPORATION CLOSING HYPOTHETICAL VALUE (PAYABLE IN THREE OVER THE LIFE OF THE SECURITY
PRICE ON DETERMINATION OF PAYMENT AT MONTHLY INTEREST -------------------- ---------------------
DATE MATURITY(d) PAYMENTS)(c) $ %
------------------------ --------------------- -------------------------- -------------------- ---------------------
$45.00 or greater $1,000.00 $30.00 $1,030.00 3.00%
$40.50 $1,000.00 $30.00 $1,030.00 3.00%
$38.48 $1,000.00 $30.00 $1,030.00 3.00%
$36.00 $1,000.00 $30.00 $1,030.00 3.00%
------------------------ ---------------------- ------------------------- ------------------- ----------------------
----------------
(a) Based on the assumptions set forth above, if the closing price of the
hypothetical underlying stock falls below $36.00 on any trading day during
the Knock-in Period and, in addition, the closing price of the hypothetical
underlying stock is less than $45.00 on the determination date, the payment
at maturity will be made in shares of the hypothetical underlying common
stock. For determining the value of the hypothetical payment at maturity,
we have assumed that the closing price of the hypothetical underlying stock
will be the same on the maturity date as on the determination date.
(b) The total return presented is exclusive of any tax consequences of owning
the Securities. You should consult your tax advisor regarding whether
owning the Securities is appropriate for your tax situation. See the
sections titled "Risk Factors" in this Pricing Supplement and "United
States Federal Taxation" and "Taxation in the Netherlands" in the
accompanying Prospectus Supplement.
(c) Interest on the Securities will be computed on the basis of a 360-day year
of twelve 30-day months or, in the case of an incomplete month, the number
of actual days elapsed. Accordingly, depending on the number of days in any
monthly interest payment period, the coupon payable in such period and,
consequently, the total interest payable over the life of the Securities,
may be less than the amount reflected in this column.
(d) Based on the assumptions set forth above, if the closing price of the
hypothetical underlying stock never falls below $36.00 on any trading day
during the Knock-in Period, the payment at maturity will be made in cash.
PS-24
INCORPORATION OF DOCUMENTS BY REFERENCE
Holding is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, Holding files reports and other information with the Securities and
Exchange Commission (the "Commission"). You may read and copy these documents at
the SEC Headquarters Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549 (tel: 202-551-8090), and at the SEC's regional offices at Northeast
Regional Office, 3 World Financial Center, Suite 400, New York, NY 10281 (tel:
212-336-1100) and Midwest Regional Office, 175 W. Jackson Boulevard, Suite 900,
Chicago, Illinois 60604. Copies of this material can also be obtained from the
Public Reference Room of the Commission at 100 F Street, N.E., Washington, D.C.
20549 at prescribed rates. Please call the Commission at 1-800-SEC-0330 for
further information about the Public Reference Room. The Commission also
maintains an Internet website that contains reports and other information
regarding Holding that are filed through the Commission's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) System. This website can be accessed
at www.sec.gov. You can find information Holding has filed with the Commission
by reference to file number 1-14624.
This Pricing Supplement is part of a registration statement that we and
Holding filed with the Commission. This Pricing Supplement omits some
information contained in the registration statement in accordance with
Commission rules and regulations. You should review the information and exhibits
in the registration statement for further information on us and Holding and the
securities we and Holding are offering. Statements in this prospectus concerning
any document we and Holding filed as an exhibit to the registration statement or
that Holding otherwise filed with the Commission are not intended to be
comprehensive and are qualified by reference to these filings. You should review
the complete document to evaluate these statements.
The Commission allows us to incorporate by reference much of the
information that we and Holding file with them, which means that we can disclose
important information to you by referring you to those publicly available
documents. The information that we and Holding incorporate by reference in this
Pricing Supplement is considered to be part of this Pricing Supplement. Because
we and Holding are incorporating by reference future filings with the
Commission, this Pricing Supplement is continually updated and those future
filings may modify or supersede some of the information included or incorporated
in this Pricing Supplement. This means that you must look at all of the
Commission filings that we and Holding incorporate by reference to determine if
any of the statements in this Pricing Supplement or in any document previously
incorporated by reference have been modified or superseded. This Pricing
Supplement incorporates by reference all Annual Reports on Form 20-F filed by
Holding since September 29, 2006, and any future filings that we or Holding make
with the Commission (including any Form 6-K's that we or Holding subsequently
file with the Commission) under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, that are identified in such filing as being specifically
incorporated by reference into Registration Statement Nos. 333-137691 or
333-137691-02, of which this Pricing Supplement is a part, until we and Holding
complete our offering of the Securities to be issued hereunder or, if later, the
date on which any of our affiliates cease offering and selling these Securities.
You may request, at no cost to you, a copy of these documents (other than
exhibits not specifically incorporated by reference) by writing or telephoning
us at: ABN AMRO Bank N.V., ABN AMRO Investor Relations Department, Hoogoorddreef
66-68, P.O. Box 283, 1101 BE Amsterdam, The Netherlands (Telephone: (31-20) 628
3842).
PS-25
DESCRIPTION OF SECURITIES
Capitalized terms not defined herein have the meanings given to such terms
in the accompanying Prospectus Supplement. The term "Security" refers to each
$1,000 principal amount of any of the Knock-in Reverse Exchangeable Securities
due June 30, 2009 linked to one of the Underlying Stocks set forth below and
fully and unconditionally guaranteed by Holding.
The Offerings.............. This Pricing Supplement relates to eight (8)
separate offerings of Securities. Each issue of
offered Securities is linked to one, and only one,
Underlying Stock. The purchaser of a note will
acquire a Security linked to a single Underlying
Stock, not to a basket or index that includes one
or more of the Underlying Stocks. You may
participate in any of the eight (8) offerings or,
at your election, in several or all offerings.
Underlying Companies....... The Securities are linked to the common stocks of
JPMorgan Chase & Co. ("JPMorgan"), Target
Corporation ("Target"), Archer-Daniels-Midland
Company ("Archer-Daniels"), Freeport-McMoRan
Copper & Gold Inc. ("Freeport-McMoRan"), the
American Depositary Shares of China Mobile Limited
("China Mobile"), the American Depositary Shares
of PetroChina Company Limited ("PetroChina"),
Caterpillar Inc. ("Caterpillar"), and Apple Inc.
("Apple").
Principal Amounts.......... $ for Securities linked to the common stock of
JPMorgan;
$ for Securities linked to the common stock of
Target;
$ for Securities linked to the common stock of
Archer-Daniels;
$ for Securities linked to the common stock of
Freeport-McMoRan;
$ for Securities linked to the American
Depositary Shares of China Mobile;
$ for Securities linked to the American
Depositary Shares of PetroChina;
$ for Securities linked to the common stock of
Caterpillar; and
$ for Securities linked to the common stock of
Apple Inc.;
Underlying Stocks.......... Common Stock, $1 par value per share for
Securities linked to the common stock of JPMorgan;
Common Stock, $.0833 par value per share for
Securities linked to the common stock of Target;
Common Stock no par value per share for Securities
linked to the common stock of Archer-Daniels;
Common Stock $.10 par value per share for
Securities linked to the common stock of
Freeport-McMoRan;
American Depositary Shares, or ADSs, each ADS
representing five ordinary shares HK$0.10 par
value, linked to the ordinary shares of China
Mobile;
American Depositary Shares, or ADSs, each ADS
representing 100 H Shares, par value RMB 1.00 per
share, linked to the common stock of PetroChina;
Common Stock $1.00 par value per share for
Securities linked to the common stock of
Caterpillar; and
Common Stock no par value per share for Securities
linked to the common stock of Apple;
Proposed Settlement Date... March 31, 2009
Proposed Pricing Date...... March 26, 2009
Issue Price................ 100%
PS-26
Initial Price.............. $ for Securities linked to the common stock of
JPMorgan;
$ for Securities linked to the common stock of
Target;
$ for Securities linked to the common stock of
Archer-Daniels;
$ for Securities linked to the common stock of
Freeport-McMoRan;
$ for Securities linked to American Depositary
Shares of China Mobile Limited;
$ for Securities linked to the American
Depositary Shares of PetroChina;
$ for Securities linked to the common stock of
Caterpillar.
$ for Securities linked to the common stock of
Apple;
In each case, the Initial Price is the Closing
Price per share of Underlying Stock when we priced
the Securities on the Pricing Date, divided by the
Exchange Factor.
Knock-in Level............. A percentage of the applicable Initial Price equal
to:
50% for Securities linked to the common stock of
JPMorgan;
70% for Securities linked to the common stock of
Target;
70% for Securities linked to the common stock of
Archer-Daniels;
55% for Securities linked to the common stock of
Freeport-McMoRan;
75% for Securities linked to the common stock of
China Mobile Limited;
70% for Securities linked to the common stock of
PetroChina;
60% for Securities linked to the common stock of
Caterpillar; and
70% for Securities linked to the common stock of
Apple;
The applicable Initial Price will be determined by
the Calculation Agent.
The applicable Initial Price and consequently the
applicable Knock-in Level may be adjusted for
certain corporate events affecting the applicable
Underlying Company.
Maturity Date.............. June 30, 2009
Specified Currency......... U.S. Dollars
CUSIP...................... 00083G6S8 for Securities linked to the common
stock of JPMorgan;
00083G6T6 for Securities linked to the common
stock of Target;
00083G6U3 for Securities linked to the common
stock of Archer-Daniels;
00083G6V1 for Securities linked to the common
stock of Freeport McMoRan;
00083G6W9 for Securities linked to the American
Depositary Shares of China Mobile Limited;
00083G6X7; for Securities linked to the American
Depositary Shares of PetroChina;
00083G6Y5 for Securities linked to the common
stock of Caterpillar; and
00083G6Z2 for Securities linked to the common
stock of Apple;
Denominations.............. The Securities may be purchased in denominations
of $1,000 and integral multiples thereof.
Form of Securities......... Each of the eight (8) Securities issued as part of
this offering will be represented by a separate
registered global security, deposited with the
Depository Trust Company.
Guarantee.................. The payment and delivery obligations of ABN AMRO
Bank N.V. under the Securities, when and as they
shall become due and payable, whether at maturity
or upon acceleration, are fully and
unconditionally guaranteed by ABN AMRO Holding
N.V.
Interest Rate.............. 17.00% per annum for Securities linked to the
common stock of JPMorgan, which represents (a) an
interest coupon of 1.22% per annum
PS-27
and (b) an Option Premium of 15.78%
16.00% per annum for Securities linked to the
common stock of Target, which represents (a) an
interest coupon of 1.22% per annum and (b) an
Option Premium of 14.78% per annum;
14.00% per annum for Securities linked to the
common stock of Archer-Daniels, which represents
(a) an interest coupon of 1.22% per annum and (b)
an Option Premium of 12.78% per annum;
14.00% per annum for Securities linked to the
common stock of Freeport-McMoRan, which represents
(a) an interest coupon of 1.22% per annum and (b)
an Option Premium of 12.78% per annum;
12.50% per annum for Securities linked to the
American Depositary Shares of China Mobile
Limited, which represents (a) an interest coupon
of 1.22% per annum and (b) an Option Premium of
11.28% per annum;
12.50% per annum for Securities linked to the
American Depositary Shares of PetroChina, which
represents (a) an interest coupon of 1.22% per
annum and (b) an Option Premium of 11.28% per
annum.
11.50% per annum for Securities linked to the
common stock of Caterpillar, which represents (a)
an interest coupon of 1.22% per annum and (b) an
Option Premium of 10.28% per annum;
11.00% per annum for Securities linked to the
common stock of Apple, which represents (a) an
interest coupon of 1.22% per annum and (b) an
Option Premium of 9.78% per annum;
The Interest Rate on the Securities is payable
monthly in arrears on the last day of each month
starting on April 30, 2009 and ending on the
Maturity Date.
Knock-in Period............ The period from but not including the Pricing Date
to and including the Determination Date.
Payment at Maturity........ If the Closing Price of any Underlying Stock has
not fallen below the applicable Knock-in Level on
any Trading Day during the Knock-in Period, we
will pay you the principal amount of each Security
linked to such Underlying Stock in cash. If the
Closing Price of any Underlying Stock has fallen
below the applicable Knock-in Level on any Trading
Day during the Knock-in Period, then (i) if the
Closing Price of such Underlying Stock on the
Determination Date is below the applicable Initial
Price, we will deliver to you, in exchange for
each Security linked to such Underlying Stock, a
number of shares of such Underlying Stock equal to
the applicable Stock Redemption Amount or (ii) if
the Closing Price of such Underlying Stock on the
Determination Date is at or above the applicable
Initial Price, we will pay you the principal
amount of each Security linked to such Underlying
Stock in cash. We will pay cash in lieu of
delivering fractional shares of Underlying Stock
in an amount equal to the corresponding fractional
Closing Price of such Underlying Stock, as
determined by the Calculation Agent on the
Determination Date. Following a Reorganization
Event, the amount payable at maturity is subject
to adjustments as described below under
"--Adjustment Events."
Stock Redemption Amount.... for Securities linked to the common stock of
JPMorgan;
PS-28
for Securities linked to the common stock of
Target;
for Securities linked to the common stock of
Archer-Daniels;
for Securities linked to the common stock of
Freeport-McMoRan;
for Securities linked to the American
Depositary Shares of China Mobile Limited;
for Securities linked to the American
Depositary Shares of PetroChina;
for Securities linked to the common stock of
Caterpillar
for Securities linked to the common stock of
Apple
Determination Date......... June 25, 2009; provided that if such day is not a
Trading Day, or if a Market Disruption Event has
occurred on such a Trading Day, the Determination
Date shall be the immediately succeeding Trading
Day; provided, further, that the Determination
Date shall be no later than the second scheduled
Trading Day preceding the Maturity Date,
notwithstanding the occurrence of a Market
Disruption Event on such second scheduled Trading
Day.
Closing Price.............. If the shares of any Underlying Stock (or any
other security for which a closing price must be
determined) are listed on a U.S. securities
exchange registered under the Exchange Act, or are
included in the OTC Bulletin Board Service, which
we refer to as the OTC Bulletin Board (operated by
the National Association of Securities Dealers,
Inc.), the Closing Price for one share of such
Underlying Stock (or one unit of any such other
security) on any Trading Day means (i) the last
reported sale price, regular way, in the principal
trading session on such day on the principal
securities exchange on which the shares of such
Underlying Stock (or any such other security) are
listed or admitted to trading or (ii) if not
listed or admitted to trading on any such
securities exchange or if such last reported sale
price is not obtainable (even if the shares of
such Underlying Stock, or other such security, are
listed or admitted to trading on such securities
exchange), the last reported sale price in the
principal trading session on the over-the-counter
market as reported on the Relevant Exchange or OTC
Bulletin Board on such day. If the last reported
sale price is not available pursuant to clause (i)
or (ii) of the preceding sentence, the Closing
Price for any Trading Day shall be the mean, as
determined by the Calculation Agent, of the bid
prices for the shares of such Underlying Stock (or
any such other security) obtained from as many
dealers in such security (which may include AAI or
any of our other affiliates), but not exceeding
three, as will make such bid prices available to
the Calculation Agent. If the Closing Price for
the American Depositary Shares of China Mobile and
PetroChina is not available in accordance with the
two preceding sentences, the Closing Price for
such American Depositary Shares on any Trading Day
shall be determined by reference to the Ordinary
Share Closing Price, as determined by the
Calculation Agent. If the Closing Price cannot be
determined in accordance with the above
provisions, then the Closing Price shall be the
value as determined by the Calculation Agent. The
term "OTC Bulletin Board Service" shall include
any successor service thereto.
Ordinary Share
Closing Price............ For any Trading Day, the Ordinary Share Closing
Price shall be the Closing Price of such ordinary
shares on the stock exchange or securities market
on which the ordinary shares of China Mobile and
PetroChina are principally traded, as determined
by the Calculation Agent, on such day, not being
subject to any special provisions (or, if no sale
occurs on such day, the closing bid price on such
day). If the Ordinary Share Closing Price cannot
be determined in accordance with the above
provisions, then the Ordinary Share Closing Price
on any Trading Day shall be deemed to
PS-29
be the value, as determined by the Calculation
Agent, of the ordinary shares. The Ordinary Share
Closing Price shall be converted by the
Calculation Agent into U.S. dollars at the bid
spot rate for such currency prevailing on such
Trading Day, as determined by the Calculation
Agent.
Relevant Exchange.......... The primary U.S. securities organized exchange or
market of trading for the applicable Underlying
Stock (or if a Cancellation Event has occurred
with respect to the American Depositary Shares of
China Mobile and PetroChina, such stock exchange
or securities market on which the ordinary shares
of China Mobile and PetroChina are principally
traded, as determined by the Calculation Agent).
If a Reorganization Event has occurred, the
Relevant Exchange will be the stock exchange or
securities market on which the Exchange Property
(as defined below under "--Adjustment Events")
that is a listed equity security is principally
traded as determined by the Calculation Agent.
Trading Day................ A day, as determined by the Calculation Agent, on
which trading is generally conducted on the
Relevant Exchange.
Book Entry Note or
Certificated Note........ Book Entry
Trustee.................... Wilmington Trust Company
Securities Administrator... Citibank, N.A.
Market Disruption Event.... Means, with respect to any securities for which a
Closing Price or Ordinary Shares Closing Price
must be determined:
(i) either:
(x) any suspension of or limitation imposed
on trading in such securities by the
primary exchange therefore or otherwise
and whether by reason of movements in
price exceeding limits permitted by such
exchange or otherwise or by any exchange
or quotation system on which trading in
futures or options contracts relating to
such securities is executed, or
(y) any event (other than an event described
in clause (z) below) that disrupts or
impairs (as determined by the
Calculation Agent) the ability of market
participants in general (1) to effect
transactions in or obtain market values
for such securities on the primary
exchange therefore or (2) to effect
transactions in or obtain market values
for futures or options contracts
relating to such securities on any other
exchange, or
(z) the closure on any Trading Day of the
primary exchange for such securities, or
any exchange or quotation system on
which trading in future or options
relating such securities is executed,
prior to its scheduled closing time
unless such earlier closing time is
announced by such exchange at least one
hour prior to the earlier of (1) the
actual closing time for the regular
trading session on such exchange on such
Trading Day and (2) the submission
deadline for orders to be entered into
such exchange for execution on such
Trading Day; and
(ii) a determination by the Calculation Agent in
its sole discretion that the event described
in clause (i) above materially interfered
with our ability or the ability of any of our
affiliates to unwind or adjust all or a
material portion of the hedge with respect to
the Securities.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a limitation on
the hours or number of days of trading will
PS-30
not constitute a Market Disruption Event if it
results from an announced change in the regular
business hours of the relevant exchange; (2) a
decision to permanently discontinue trading in the
relevant futures or options contract will not
constitute a Market Disruption Event; (3)
limitations pursuant to any similar applicable
rule or regulation enacted or promulgated by the
New York Stock Exchange Inc., any other
self-regulatory organization, the Securities and
Exchange Commission or the Relevant Exchange or
any other relevant authority of similar scope as
determined by the Calculation Agent on trading
during significant market fluctuations shall
constitute a suspension, absence or material
limitation of trading; (4) a suspension of trading
in a futures or options contract on such
securities by the primary securities market
trading in such futures or options, if available,
by reason of (x) a price change exceeding limits
set by such securities exchange or market, (y) an
imbalance of orders relating to such contracts or
(z) a disparity in bid and ask quotes relating to
such contracts will constitute a suspension,
absence or material limitation of trading in
futures or options contracts related to such
securities; and (5) a suspension, absence or
material limitation of trading on the primary
securities market on which futures or options
contracts related to such securities are traded
will not include any time when such securities
market is itself closed for trading under ordinary
circumstances.
The Calculation Agent shall as soon as reasonably
practicable under the circumstances notify us, the
trustee, the Depository Trust Company and the
agents of the existence or occurrence of a Market
Disruption Event on any day that but for the
occurrence or existence of a Market Disruption
Event would have been the Determination Date.
Exchange Factor............ The Exchange Factor for each Underlying Stock will
be set initially at 1.0, but will be subject to
adjustment upon the occurrence of certain
corporate events affecting such Underlying Stock.
See "Adjustment Events" below.
Adjustment Events.......... The Exchange Factor or the amounts paid at
maturity for each Underlying Stock will be
adjusted as follows:
1. If such Underlying Stock is subject to a
stock split or reverse stock split, then once
such split has become effective, the Exchange
Factor will be proportionately adjusted. In
the case of Securities linked to the American
Depositary Shares of China Mobile and
PetroChina, if the ordinary shares of China
Mobile and PetroChina are subject to a stock
split or reverse stock split, then once such
split has become effective, the Exchange
Factor will be proportionately adjusted;
PROVIDED, HOWEVER, that if (and to the extent
that) China Mobile and PetroChina or the
depositary for the American Depositary Shares
have adjusted the number of ordinary shares
represented by each American Depositary
Share, so that the price of such American
Depositary Share would not be affected by
such stock split or reverse stock split, no
adjustment of the Exchange Factor shall be
made.
2. If such Underlying Stock or, in the case of
Securities linked to the American Depositary
Shares of Caterpillar, the ordinary shares of
China Mobile and PetroChina, are subject (i)
to a stock dividend (i.e., the issuance of
additional shares of such Underlying Stock or
issuances of additional ordinary shares, as
the case may be) that is given ratably to all
holders of such Underlying Stock or ordinary
shares, as the case may be, or (ii) to a
distribution of the shares of such Underlying
Stock or such ordinary shares, as the case
may be, as a result of the triggering of any
provision of the corporate charter of
PS-31
the applicable Underlying Company, in each
case other than a stock split described in
paragraph 1, then once the dividend has
become effective and such Underlying Stock is
trading ex-dividend, the Exchange Factor will
be proportionally adjusted; PROVIDED,
HOWEVER, that with respect to the Securities
linked to American Depositary Shares of China
Mobile and PetroChina, if (and to the extent
that) Caterpillar or the depositary for the
American Depositary Shares have adjusted the
number of ordinary shares represented by each
American Depositary Share so that the price
of such American Depositary Share would not
be affected by such stock dividend, no
adjustment of the Exchange Factor shall be
made.
3. There shall be no adjustments to the Exchange
Factor to reflect cash dividends or other
distributions paid with respect to such
Underlying Stock or ordinary shares of China
Mobile and PetroChina, as the case may be,
unless such cash dividends or other
distributions constitute Extraordinary
Dividends as described below (except that
distributions described in paragraph 2 above
shall not be subject to this paragraph). A
cash dividend or other distribution with
respect to any of the Underlying Stocks or
ordinary shares of China Mobile and
PetroChina, as the case may be, shall be
deemed to be an "Extraordinary Dividend" if
such dividend or other distribution exceeds
the immediately preceding non-Extraordinary
Dividend for such Underlying Stock or
ordinary shares, as the case may be, by an
amount equal to at least 10% of the Closing
Price of such Underlying Stock or the
Ordinary Shares Closing Price of such
ordinary shares, as the case may be, (in each
case as adjusted for any subsequent corporate
event requiring an adjustment hereunder, such
as a stock split or reverse stock split) on
the Trading Day preceding the ex-dividend
date for the payment of such Extraordinary
Dividend (the "ex-dividend date"). If an
Extraordinary Dividend occurs, the Exchange
Factor with respect to such Underlying Stock
will be adjusted on the ex-dividend date with
respect to such Extraordinary Dividend so
that the new Exchange Factor will equal the
product of (i) the then-current Exchange
Factor and (ii) a fraction, the numerator of
which is the Closing Price or the Ordinary
Shares Closing Price, as the case may be, on
the Trading Day preceding the ex-dividend
date, and the denominator of which is the
amount by which the Closing Price or the
Ordinary Shares Closing Price on the Trading
Day preceding the ex-dividend date exceeds
the Extraordinary Dividend Amount. The
"Extraordinary Dividend Amount" with respect
to an Extraordinary Dividend for any
Underlying Stock shall equal (i) in the case
of cash dividends or other distributions that
constitute regular dividends, the amount per
share or ordinary share of such Extraordinary
Dividend minus the amount per share or
ordinary share of the immediately preceding
non-Extraordinary Dividend for such
Underlying Stock or (ii) in the case of cash
dividends or other distributions that do not
constitute regular dividends, the amount per
share or ordinary share of such Extraordinary
Dividend, in each case so converted to U.S.
dollars, if applicable. To the extent an
Extraordinary Dividend is not paid in cash,
the value of the non-cash component will be
determined by the Calculation Agent, whose
determination shall be conclusive. A
distribution on the shares of such Underlying
Stock or the American Depositary Shares, as
the case may be, described in clause (A),
clause (D) or clause (E) in the definitions
of "Reorganization Event" of paragraph 6
below that also constitutes
PS-32
an Extraordinary Dividend shall not cause an
adjustment to the Exchange Factor pursuant to
this paragraph 3.
4. If any Underlying Company issues rights or
warrants to all holders of the applicable
Underlying Stock or holders of the ordinary
shares of China Mobile and PetroChina, as the
case may be, to subscribe for or purchase
such Underlying Stock or ordinary shares at
an exercise price per share (as converted
into U.S. dollars at the bid spot rate for
such currency on the applicable date, if
applicable) less than the Closing Price of
such Underlying Stock or the Ordinary Share
Closing Price, as the case may be, on both
(i) the date the exercise price of such
rights or warrants is determined and (ii) the
expiration date of such rights or warrants,
and if the expiration date of such rights or
warrants precedes the maturity of the
Securities, then the Exchange Factor shall be
proportionately adjusted; PROVIDED, HOWEVER,
that in the case of Securities linked to the
American Depositary Shares of China Mobile
and PetroChina, if (and to the extent that)
China Mobile and PetroChina or the depositary
for the American Depositary Shares has
adjusted the number of the ordinary shares
represented by each American Depositary Share
so that the price of the American Depositary
Shares would not be affected by the issuance
of such rights or warrants, no adjustment to
the Exchange Factor shall be made.
5. If of China Mobile or PetroChina or the
depositary for the American Depositary Shares
of China Mobile or PetroChina elects to
cancel the ADR facility for the ordinary
shares of China Mobile or PetroChina during
the term of the Securities and such ordinary
shares are not immediately listed on a United
States national securities exchange (a
"Cancellation Event") then at maturity we
will pay you in respect of each $1,000
principal amount of Securities linked to the
Underlying Stock of China Mobile and
PetroChina an amount in cash, as determined
by the Calculation Agent, equal to: (i)
$1,000, if the Closing Price of the ordinary
shares has not fallen below the Knock-in
Level on any Trading Day from but not
including the Pricing Date to and including
the Determination Date; or (ii) a cash
payment equal to the product of the Stock
Redemption Amount and the Ordinary Share
Closing Price on the Determination Date, if
(x) the Closing Price of the ordinary shares
has fallen below the Knock-in Level on any
Trading Day from but not including the
Pricing Date to and including the
Determination Date, and (y) the Ordinary
Share Closing Price on the Determination Date
is below the Initial Price; or (iii) $1,000,
if (x) the Closing Price of the ordinary
shares on the Relevant Exchange has fallen
below the Knock-in Level on any Trading Day
from but not including the Pricing Date to
and including the Determination Date and (y)
the Ordinary Share Closing Price on the
Determination Date is at or above the Initial
Price. For purposes of this paragraph 5, the
Initial Price and consequently the Knock-in
Level and Stock Redemption Amount will be
adjusted by the Calculation Agent to reflect
the Ordinary Share Closing Price on the
Pricing date, as adjusted for any events set
forth in paragraphs 1 - 4 since the Pricing
date, as determined by the Calculation Agent,
and the Exchange Factor shall be reset to 1.0
immediately following the Cancellation Event.
The Bank will provide notice to the Trustee
and the Securities Administrator of the
adjusted Initial Price, Knock-in Level and
Stock
PS-33
Redemption Amount as soon as practicable
after the date of such Cancellation Event.
6. If a Reorganization Event (as defined below)
occurs, the payment at maturity will depend
on (i) whether the Closing Price of the
applicable Underlying Stock or underlying ADS
(or, following a Cancellation Event ordinary
shares of China Mobile and PetroChina) fell
below the applicable Knock-in Level on any
Trading Day from but not including the
Pricing Date to and including one Trading Day
prior to the date of the Reorganization Event
(for purposes of this paragraph 5, we refer
to such period as the "Relevant Period"), and
(ii) the kind and amount of Exchange Property
(as defined below) received by holders of
such Underlying Stock or ADS' (or ordinary
shares, as applicable) in the Reorganization
Event.
In the case where the Closing Price of the
applicable Underlying Stock or ADS' (or,
following a Cancellation Event, ordinary
shares of China Mobile or PetroChina) has
fallen below the applicable Knock-in Level on
any Trading Day during the Relevant Period,
each holder of a Security will receive at
maturity, in respect of each $1,000 principal
amount of each Security, the lesser of: (i)
$1,000 in cash or (ii) Exchange Property in
an amount with a value equal to the product
of the applicable Stock Redemption Amount
times the Transaction Value (as defined
below).
In the case where the Closing Price of the
applicable Underlying Stock or ADS' (or,
following a Cancellation Event, ordinary
shares of China Mobile or PetroChina) has not
fallen below the applicable Knock-in Level on
any Trading Day during the Relevant Period,
then the payment at maturity will depend upon
the type of Exchange Property received by
holders of such Underlying Stock or ADS' (or
ordinary shares, as the case may be) in
accordance with the following:
(i) If the Exchange Property consists
solely of equity securities listed
on a securities exchange that, in
the opinion of the Calculation
Agent, maintains sufficient
liquidity for trading in such
Exchange Property, then the payment
at maturity for each $1,000
principal amount of Securities will
depend on whether the Closing Price
of such Exchange Property has
fallen below the applicable
Knock-in Level on any Trading Day
commencing on the date of such
Reorganization Event to and
including the Determination Date:
(a) If the Closing Price of such
Exchange Property has not
fallen below the applicable
Knock-in Level on any Trading
Day commencing on the date of
such Reorganization Event to
and including the
Determination Date, then each
holder of a Security will
receive the principal amount
of $1,000 in cash; or
(b) If the Closing Price of such
Exchange Property has fallen
below the applicable Knock-in
Level on any Trading Day
commencing on the date of such
Reorganization Event to and
including the Determination
Date, then (x) if the Closing
Price of such Exchange
Property on the Determination
Date is below the applicable
Initial Price, we will deliver
to you, in exchange for each
Security, Exchange Property
with a value equal to the
product of the applicable
Stock Redemption Amount times
the
PS-34
Transaction Value and (y) if
the Closing Price of such
Exchange Property on the
Determination Date is at or
above the applicable Initial
Price, we will pay you $1,000
in cash.
The Calculation Agent will adjust
the applicable Initial Price and
consequently the applicable
Knock-in Level to reflect the new
securities delivered in such
Reorganization Event and the market
value and volatility levels of such
securities and any Exchange Factor
adjustments to the applicable
Initial Price as of the effective
date of the Reorganization Event.
Following any such adjustment, the
Initial Price will be such adjusted
Initial Price, divided by the
Exchange Factor (which shall have
been reset to 1.0 immediately
following the Reorganization
Event). The Bank will provide
notice to the Trustee and the
Securities Administrator of the
adjusted Knock-in Level and Initial
Price as soon as practicable after
the date of such Reorganization
Event.
(ii) If the Exchange Property consists
solely of property other than such
listed equity securities, each
holder of a Security will receive,
on the Maturity Date, in exchange
for each $1,000 principal amount of
Securities, the lesser of: (i)
$1,000 in cash or (ii) Exchange
Property in an amount with a value
equal to the product of the
applicable Stock Redemption Amount
times the Transaction Value as of
the Determination Date. We may, in
lieu of delivering such Exchange
Property, pay you the cash value of
such Exchange Property as of the
Determination Date, as determined
by the Calculation Agent. We will
notify the Trustee and the
Securities Administrator of the
amount and type of Exchange
Property to be delivered or cash to
be paid.
(iii) If the Exchange Property consists
of any combination of such listed
equity securities and other
property, then we will (a) deliver,
on the Maturity Date, the portion
of Exchange Property consisting of
such other property with a value
equal to the product of the
applicable Stock Redemption Amount
(prior to any adjustment under this
clause) times the Transaction Value
of such portion of Exchange
Property on the Determination Date
or, at our election, pay the cash
value thereof, as determined by the
Calculation Agent, (b)
proportionally adjust the
applicable Stock Redemption Amount
to reflect the portion of the
Exchange Property constituting such
listed equity securities, (c)
adjust the applicable Initial Price
and consequently the applicable
Knock-in Level to reflect such
listed equity securities, the
market value and volatility levels
of such listed equity securities
and any Exchange Factor adjustments
to the applicable Initial Price as
of the effective date of the
Reorganization Event and (d) reduce
the principal amount of each $1,000
of Securities to an amount equal to
such adjusted Stock Redemption
Amount multiplied by such adjusted
Initial Price. Following such
adjustments, the amount paid at
maturity for each Security will be
determined as set forth under
clause (i) above, except references
to each $1,000 principal amount of
Security and $1,000 in cash and the
PS-35
reference to $1,000 in the
definition of Stock Redemption
Amount shall be references to the
adjusted principal amount of
Securities as described in clause
(d) of the preceding sentence. In
addition, following any such
adjustment, the applicable Initial
Price will be such adjusted Initial
Price, divided by the Exchange
Factor (which shall have been reset
to 1.0 immediately following the
Reorganization Event). The Bank
will provide notice to the Trustee
and the Securities Administrator of
any adjustments to the Securities
as a result of this clause (iii) as
soon as practicable after the date
of such Reorganization Event.
"Reorganization Event" means (A) there has
occurred any reclassification or change with
respect to the applicable Underlying Stock
or, in the case of Securities linked to the
American Depositary Shares of China Mobile or
PetroChina, including, without limitation, as
a result of the issuance of any tracking
stock by the Underlying Company; (B) the
applicable Underlying Company or any
surviving entity or subsequent surviving
entity of such Underlying Company (an
"Underlying Company Successor") has been
subject to a merger, combination or
consolidation and is not the surviving
entity; (C) any statutory exchange of
securities of the applicable Underlying
Company or any Underlying Company Successor
with another corporation occurs (other than
pursuant to clause (B) above); (D) the
applicable Underlying Company is liquidated;
(E) the applicable Underlying Company issues
to all of its shareholders equity securities
of an issuer other than such Underlying
Company (other than in a transaction
described in clauses (B), (C) or (D) above)
(a "Spin-off Event"); or (F) a tender or
exchange offer or going-private transaction
is consummated for all such outstanding
Underlying Stock (or all the outstanding
ordinary shares of Caterpillar).
"Exchange Property" means securities, cash or
any other assets distributed to holders of
the applicable Underlying Stock or, in the
case of Securities linked to the American
Depositary Shares of China Mobile or
PetroChina, or ADS' or the ordinary shares of
China Mobile or PetroChina, in any
Reorganization Event, including, (A) in the
case of the issuance of tracking stock or in
the case of a Spin-off Event, the applicable
Underlying Stock or ADS' (or, following a
Cancellation Event, the ordinary shares of
China Mobile or PetroChina) with respect to
which the tracking stock or spun-off security
was issued and (B) in the case of any other
Reorganization Event where the applicable
Underlying Stock or ADS' (or ordinary shares
of Caterpillar, as applicable) continue to be
held by the holders receiving such
distribution, such Underlying Stock or ADS'
(or ordinary shares of Caterpillar, as
applicable).
"Transaction Value", at any date, means (A)
for any cash received as Exchange Property in
any such Reorganization Event, the amount of
cash received per share of applicable
Underlying Stock, ADS or, if a Cancellation
Event has occurred, each ordinary share of
Caterpillar; (B) for any property other than
cash or securities received in any such
Reorganization Event, the market value, as
determined by the Calculation Agent, as of
the date of receipt, of such Exchange
Property received per share of applicable
Underlying Stock, ADS or, in a Cancellation
Event has occurred, each ordinary share of
China Mobile or PetroChina; and (C) for any
security received in any such
PS-36
Reorganization Event (including in the case
of the issuance of tracking stock, the
reclassified Underlying Stock or the American
Depositary Shares representing reclassified
ordinary shares or following a Cancellation
Event, the reclassified ordinary shares of
China Mobile or PetroChina and, in the case
of a Spin-off Event, the Underlying Stock or
the American Depositary Shares representing
the ordinary shares of China Mobile or
PetroChina, as the case may be, with respect
to which the spun-off security was issued),
an amount equal to the Closing Price, as of
the determination date, per share of such
security multiplied by the quantity of such
security received for each shares of
applicable Underlying Stock or each American
Depositary Share, as applicable. If the
Transaction Value for any cash or property
above is in a currency other than U.S.
dollars, then such Transaction Value shall be
converted to U.S. dollars in the manner set
forth under "Ordinary Share Closing Price"
above as of such date of determination.
For purposes of clause (iii) above, if
Exchange Property consists of more than one
type of property that is not listed equity
securities described in clause (iii) above,
holders of Securities will receive at
maturity a pro rata share of each such type
of Exchange Property in proportion to the
quantity of such Exchange Property received
in respect of each shares of applicable
Underlying Stock or each American Depositary
Share, as applicable (or, in the case of a
Cancellation Event, each ordinary share). If
Exchange Property includes a cash component,
holders will not receive any interest accrued
on such cash component. In the event Exchange
Property consists of securities, those
securities will, in turn, be subject to the
antidilution adjustments set forth in
paragraphs 1 through 6.
For purposes of this paragraph 6:
(i) If a transaction or series of
concurrent transaction with respect
to one of the Underlying Stocks
constitutes both a Cancellation
Event and a Reorganization Event,
such transaction or series of
transactions shall be deemed to
constitute one Reorganization
Event;
(ii) in the case of a consummated tender
or exchange offer or going-private
transaction involving Exchange
Property of a particular type,
Exchange Property shall be deemed
to include the amount of cash or
other property paid by the offeror
in the tender or exchange offer
with respect to such Exchange
Property (in an amount determined
on the basis of the rate of
exchange in such tender or exchange
offer or going-private
transaction); and
(ii) in the event of a tender or
exchange offer or a going-private
transaction with respect to
Exchange Property in which an
offeree may elect to receive cash
or other property, Exchange
Property shall be deemed to include
the kind and amount of cash and
other property received by offerees
who elect to receive cash.
7. In the event that of China Mobile or
PetroChina and the depositary for of China
Mobile's or PetroChina's American Depositary
Shares elect, in the absence of any of the
events described above, to change the number
of ordinary shares that are represented by
each American Depositary Share, the Exchange
Factor on any Trading Day after the change
becomes
PS-37
effective will be proportionately adjusted.
With respect to paragraphs 1 to 7 above, no
adjustments to the Exchange Factor shall be
required unless such adjustment would require a
change of at least 0.1% in the Exchange Factor
then in effect. The Exchange Factor resulting from
any of the adjustments specified above shall be
rounded to the nearest one hundred-thousandth with
five one-millionths being rounded upward.
No adjustments to the Exchange Factor or method of
calculating the Exchange Factor shall be required
other than those specified above. However, the
Bank may, at its sole discretion, cause the
Calculation Agent to make additional changes to
the Exchange Factor upon the occurrence of
corporate or other similar events that affect or
could potentially affect market prices of, or
shareholders' rights in, the shares of the
applicable Underlying Stock (or other Exchange
Property) but only to reflect such changes, and
not with the aim of changing relative investment
risk. The adjustments specified above do not cover
all events that could affect the Market Price or
the Closing Price of the applicable Underlying
Stock, including, without limitation, a partial
tender or partial exchange offer for such
Underlying Stock.
The Calculation Agent shall be solely responsible
for the determination and calculation of any
adjustments to the Exchange Factor or method of
calculating the Exchange Factor and of any related
determinations and calculations with respect to
any distributions of stock, other securities or
other property or assets (including cash) in
connection with any Reorganization Event described
in paragraph 6 above, and its determinations and
calculations with respect thereto shall be
conclusive.
The Calculation Agent will provide information as
to any adjustments to the Exchange Factor or
method of calculating the Exchange Factor upon
written request by any holder of the Securities.
Alternate Exchange
Calculation in case
of an Event of Default... In case an Event of Default with respect to the
Securities shall have occurred and be continuing,
the amount declared due and payable upon any
acceleration of any Security shall be determined
by AAI, as Calculation Agent, and shall be equal
to the principal amount of the Security plus any
accrued interest to, but not including, the date
of acceleration.
Calculation Agent.......... AAI, which is our affiliate. All determinations
made by the Calculation Agent will be at the sole
discretion of the Calculation Agent and will, in
the absence of manifest error, be conclusive for
all purposes and binding on you and on us.
Additional Amounts......... Subject to certain exceptions and limitations
described in "Description of Debt Securities --
Payment of Additional Amounts" in the accompanying
Prospectus, we will pay such additional amounts to
holders of the Securities as may be necessary in
order that the net payment of the principal of the
Securities and any other amounts payable on the
Securities, after withholding for or on account of
any present or future tax, assessment or
governmental charge imposed upon or as a result of
such payment by The Netherlands (or any political
subdivision or taxing authority thereof or
therein) or the jurisdiction of residence or
incorporation of any successor corporation (other
than the United States), will not be less than the
amount provided for in the Securities to be then
due and payable.
PS-38
Book Entry................. The indenture for the Securities permits us at
anytime and in our sole discretion to decide not
to have any of the Securities represented by one
or more registered global securities. DTC has
advised us that, under its current practices, it
would notify its participants of our request, but
will only withdraw beneficial interests from the
global security at the request of each DTC
participant.
Record Date................ The "record date" for any interest payment date is
the calendar day prior to that interest payment
date, whether or not that date is a business day.
PS-39
USE OF PROCEEDS
The net proceeds we receive from the sale of the Securities will be used
for general corporate purposes and, in part, by us or one or more of our
affiliates in connection with hedging our obligations under the Securities. The
issue price of the Securities includes the selling agents' commissions (as shown
on the cover page of this Pricing Supplement) paid with respect to the
Securities and the cost of hedging our obligations under the Securities. The
cost of hedging includes the projected profit that our affiliates expect to
realize in consideration for assuming the risks inherent in managing the hedging
transactions. Since hedging our obligations entails risk and may be influenced
by market forces beyond our or our affiliates' control, such hedging may result
in a profit that is more or less than initially projected, or could result in a
loss. See also "Risk Factors--The Inclusion of Commissions and Cost of Hedging
in the Issue Price is Likely to Adversely Affect Secondary Market Prices" and
"Potential Conflicts of Interest; No Security Interest in the Underlying Stock
Held by Us" and "Plan of Distribution" in this Pricing Supplement and "Use of
Proceeds" in the accompanying Prospectus.
TAXATION
Please review carefully the sections entitled "United States Federal
Taxation" (and in particular the subsection entitled "--Mandatorily Exchangeable
Notes--Reverse Exchangeable and Knock-in Reverse Exchangeable Securities") and
"Taxation in the Netherlands" in the accompanying Prospectus Supplement.
Prospective purchasers of the Securities should consult their own tax advisers
as to the tax consequences of acquiring, holding and disposing of the Securities
under the tax law of any state, local and foreign jurisdiction.
On December 7, 2007, the U.S. Treasury and the Internal Revenue Service
released a notice requesting comments on the U.S. federal income tax treatment
of "prepaid forward contracts" and similar instruments. While it is not entirely
clear whether the Securities are among the instruments described in the notice,
it is possible that any Treasury regulations or other guidance issued after
consideration of the issues raised in the notice could materially and adversely
affect the tax consequences of ownership and disposition of the Securities,
possibly on a retroactive basis.
The notice indicates that it is possible the IRS may adopt a new position
with respect to how the IRS characterizes income or loss (including, for
example, whether the Option Premium might be currently included as ordinary
income) on the Securities for U.S. holders of the Securities.
You should consult your tax advisor regarding the notice and its potential
implications for an investment in the Securities.
PS-40
PLAN OF DISTRIBUTION
We have appointed ABN AMRO Incorporated ("AAI") as agent for this offering.
The agent has agreed to use reasonable efforts to solicit offers to purchase the
Securities. We will pay the agent, in connection with sales of the Securities
resulting from a solicitation such agent made or an offer to purchase such agent
received, a commission of 1.375% of the initial offering price of the
Securities. Each dealer engaged by the agent, or further engaged by a dealer to
whom an agent reoffers the Securities, will purchase the Securities at an agreed
discount to the initial offering price of the Securities. The agent has informed
us that such discounts may vary from dealer to dealer and that not all dealers
will purchase or repurchase the Securities at the same discount. You can find a
general description of the commission rates payable to the agents under "Plan of
Distribution" in the accompanying Prospectus Supplement.
AAI is a wholly owned subsidiary of the Bank. AAI will conduct this
offering in compliance with the requirements of NASD Rule 2720, regarding a
Financial Industry Regulatory Authority, Inc. member firm's distributing the
securities of an affiliate. The Financial Industry Regulatory Authority, Inc.
(commonly referred to as FINRA) is the successor to the National Association of
Securities Dealers, Inc. When the distribution of the Securities is complete,
AAI may offer and sell those Securities in the course of its business as a
broker-dealer. AAI may act as principal or agent in those transactions and will
make any sales at prevailing secondary market prices at the time of sale. AAI
may use this Pricing Supplement and the accompanying Prospectus and Prospectus
Supplement in connection with any of those transactions. AAI is not obligated to
make a market in the Securities and may discontinue any purchase and sale
activities with respect to the Securities at any time without notice.
AAI or an affiliate of AAI will enter into one or more hedging transactions
with us in connection with this offering of Securities. See "Use of Proceeds"
above.
To the extent that the total aggregate principal amount of the Securities
being offered by this Pricing Supplement is not purchased by investors in the
offering, one or more of our affiliates has agreed to purchase the unsold
portion, and to hold such Securities for investment purposes for a period of at
least 30 days. See "Holding of the Securities by our Affiliates and Future
Sales" under the heading "Risk Factors."
PS-41
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PRICING SUPPLEMENT, THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT OR ADDITIONAL
INFORMATION. WE ARE OFFERING TO SELL THESE SECURITIES AND SEEKING OFFERS TO BUY
THESE SECURITIES ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED.
NEITHER THE DELIVERY OF THIS PRICING SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT AND PROSPECTUS, NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF ABN AMRO BANK N.V. OR ABN AMRO HOLDING N.V. SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PRICING SUPPLEMENT
PAGE
----
Summary of Pricing Supplement............... PS-4
Risk Factors................................ PS-9
The Underlying Stocks....................... PS-14
Hypothetical Sensitivity Analysis of Total
Return of the Securities at Maturity...... PS-25
Incorporation of Documents by Reference..... PS-27
Description of Securities................... PS-28
Use of Proceeds............................. PS-42
Taxation.................................... PS-41
Plan of Distribution........................ PS-43
PROSPECTUS SUPPLEMENT
PAGE
----
About This Prospectus Supplement............ S-1
Risk Factors................................ S-2
Description of Notes........................ S-4
Taxation in the Netherlands................. S-24
United States Federal Taxation.............. S-25
Plan of Distribution........................ S-34
Legal Matters............................... S-36
PROSPECTUS
PAGE
----
About This Prospectus....................... 1
Where You Can Find Additional Information... 2
Cautionary Statement on Forward-Looking
Statements.................................. 3
Consolidated Ratios of Earnings to Fixed
Charges..................................... 4
ABN AMRO Bank N.V........................... 5
ABN AMRO Holding N.V........................ 6
Use of Proceeds............................. 7
Description of Debt Securities.............. 8
Forms of Securities......................... 19
The Depositary.............................. 20
Plan of Distribution........................ 22
Legal Matters............................... 25
Experts..................................... 26
Benefit Plan Investor Considerations........ 27
Enforcement of Civil Liabilities............ 28
ABN AMRO BANK N.V.
FULLY AND UNCONDITIONALLY GUARANTEED BY
ABN AMRO HOLDING N.V.
EIGHT (8) OFFERINGS OF
KNOCK-IN REVERSE EXCHANGEABLE SECURITIES
DUE JUNE 30, 2009
PRICING SUPPLEMENT
(TO PROSPECTUS DATED
SEPTEMBER 29, 2006 AND
PROSPECTUS SUPPLEMENT
DATED SEPTEMBER 29, 2006)
ABN AMRO INCORPORATED
================================================================================