Registration
Statement Nos. 333-137691, 333-137691-02
Dated
September 29, 2006
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ABN AMRO Bank N.V. Reverse
Exchangeable Securities
S-NOTESSM
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Pricing
Sheet – October 23, 2008
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13.50% (ANNUALIZED) THREE MONTH EXXON MOBIL
CORPORATION KNOCK-IN REXSM SECURITIES DUE JANUARY 28,
2009
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SUMMARY
INFORMATION
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Issuer:
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ABN AMRO Bank N.V. (Senior Long
Term Debt Rating: Moody’s Aa2, S&P
AA-)**
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Lead Agent:
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ABN AMRO
Incorporated
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Offerings:
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13.50% (Per Annum), Three Month
Reverse Exchangeable Securities due January 28, 2009 linked to the
Underlying Stock set forth in the table
below.
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Interest Payment
Dates:
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Interest on the Securities is
payable monthly in arrears on the 28th day of each month starting on
November 28, 2008 and ending on the Maturity
Date
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Underlying
Stock
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Ticker
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Coupon Rate Per
annum*
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Interest
Rate
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Put Premium
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Knock-in
Level
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CUSIP
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ISIN
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Exxon Mobil
Corporation
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XOM
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13.50%
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3.44%
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10.06%
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50%
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00083GV84
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US00083GV843
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*This Security has a term of three
months, so you will receive a pro rated amount of this per annum rate
based on such three-month period.
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Denomination/Principal:
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$1,000
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Issue Size:
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USD
1,250,000
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Issue
Price:
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100%
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Payment at
Maturity:
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The payment at maturity for each
Security is based on the performance of the Underlying Stock linked to
such Security:
i) If the
closing price of the Underlying Stock on the primary U.S. exchange or
market for such Underlying Stock 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, we will pay you the principal amount of each Security
in cash.
ii) If the
closing price of the Underlying Stock on the primary U.S.
exchange or market for such Underlying
Stock has fallen below the Knock-In Level on any trading day from but not
including the Pricing Date to and including the Determination
Date:
a) we will deliver to
you a number of shares of the Underlying Stock equal to the Stock Redemption Amount, in the
event that the closing price of the Underlying Stock on the Determination
Date is below the Initial Price; or
b) We will pay you the
principal amount of each Security in cash, in the event that the closing
price of the Underlying Stock on the Determination
Date is at or above the 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 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 Underlying Stock on the
Determination Date.
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Initial
Price:
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USD 70.39 (100% of the Closing
Price per Underlying Share on the Trade Date)
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Stock Redemption
Amount:
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14.207 shares of the Underlying
Stock per $1,000 principal amount of Securities (Denomination divided by
the Initial Price)
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Knock-In
Level:
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USD 35.20 (50% of the Initial
Price)
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Indicative Secondary
Pricing:
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• Internet at: www.s-notes.com
Bloomberg at: REXS2
<GO>
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Status:
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Unsecured, unsubordinated
obligations of the Issuer
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Trustee:
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Wilmington Trust
Company
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Securities
Administrator:
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Citibank,
N.A.
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Settlement:
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DTC, Book Entry,
Transferable
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Selling
Restrictions:
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Sales in the European Union must
comply with the Prospectus
Directive
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October
23, 2008 subject to certain adjustments as described in the related
pricing supplement
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Settlement
Date:
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October
28, 2008
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Determination
Date:
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January
23, 2009 subject
to certain adjustments as described in the related pricing
supplement |
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Maturity
Date:
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January
28, 2009 (Three
Month) |
ABN
AMRO has filed a registration statement (including a Prospectus and Prospectus
Supplement) with the SEC for the offering to which this communication relates.
Before you invest, you should read the Prospectus and Prospectus Supplement in
that registration statement and other documents ABN AMRO has filed with the SEC
for more complete information about ABN AMRO and the offering of the
Securities.
You
may get these documents for free by visiting EDGAR on the SEC web site at
www.sec.gov. Alternatively, ABN AMRO, any underwriter or any dealer
participating in the offering will arrange to send you the Prospectus and
Prospectus Supplement if you request it by calling toll free (888)
644-2048.
These
Securities 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.
**A
credit rating (1) is subject to revision, suspension or withdrawal at any time
by the assigning rating organization, (2) does not take into account market risk
or the performance related risks of investing in the Securities, and (3) is not
a recommendation to buy, sell or hold the Securities.
The
following summary does not contain all the information that may be important to
you. You should read this summary together with the more detailed information
that is contained in the related Pricing Supplement and in its accompanying
Prospectus and Prospectus Supplement. You should carefully consider, among other
things, the matters set forth in “Risk Factors” in the related Pricing
Supplement, which are summarized on page 5 of this document. 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. 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 Underlying Stock to which it is
linked.
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 from but not including the pricing date to and
including the determination date (such period, 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.
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•
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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.
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•
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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:
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•
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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;
or
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•
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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.
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If due to events
beyond our reasonable control, as determined by us in our sole discretion,
shares of the 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 Underlying Stock on the Determination Date.
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. This is 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.
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. 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 of the applicable Underlying Stock
is less than the applicable Initial Price, you will receive the applicable Stock
Redemption Amount. The market
value of the shares of
such Underlying Stock at the time you receive those shares will be less than the
principal amount of the Securities and could be zero. Therefore you are not
guaranteed to receive any return of principal at maturity.
How
is the Stock Redemption Amount determined?
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.
What
interest payments can I expect on the Securities?
The interest rate is
fixed at issue and is payable in cash on each interest payment date,
irrespective of whether the Securities are redeemed at maturity for cash or
shares.
Can
you give me an example of the payment at maturity?
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. It is not possible 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. For each offering, we will set
the Initial Price, Knock-In Level and Stock Redemption Amount on the Pricing
Date.
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.
What
if I have more questions?
You should read the
“Description of Securities” in the related Pricing Supplement for a detailed
description of the terms of the Securities. ABN AMRO has filed a registration
statement (including a Prospectus and Prospectus Supplement) with the SEC for
the offering to which this communication relates. Before you invest, you should
read the Prospectus and Prospectus Supplement in that registration statement and
other documents ABN AMRO has filed with the SEC for more complete information
about ABN AMRO and the offering of the Securities. You may get these documents
for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively,
ABN AMRO, any underwriter or any dealer participating in the offering will
arrange to send you the Prospectus and Prospectus Supplement if you request it
by calling toll free (888) 644-2048.
Investors
should carefully consider the risks of the Securities to which this
communication relates and whether these Securities are suited to their
particular circumstances before deciding to purchase them. It is important that
prior to investing in these Securities investors read the Pricing Supplement
related to such Securities and the accompanying Prospectus and Prospectus
Supplement to understand the actual terms of and the risks associated with the
Securities. In addition, we urge investors to consult with their investment,
legal, accounting, tax and other advisors with respect to any investment in the
Securities.
Credit Risk
The Securities are
issued by ABN AMRO Bank N.V. and guaranteed by ABN AMRO Holding N.V., ABN AMRO’s
parent. As a result, investors assume the credit risk of ABN AMRO Bank N.V. and
that of ABN AMRO Holding N.V. in the event that ABN AMRO defaults on its
obligations under the Securities. Any obligations or Securities sold, offered,
or recommended are not deposits on ABN AMRO Bank N.V. and are not endorsed or
guaranteed by any bank or thrift, nor are they insured by the FDIC or any
governmental agency.
Principal Risk
The Securities are
not ordinary debt securities: they are not principal protected. In addition, 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, investors in the
Securities will be exposed to any decline in the price of the applicable
Underlying Stock below the closing price of such Underlying Stock on the date
the Securities were priced. Accordingly, investors may lose some or all of their initial
investment in the Securities.
Limited Return
The amount payable
under the Securities will never exceed the original principal amount of the
Securities plus the applicable aggregate fixed coupon payment investors earn
during the term of the Securities. This means that investors will not benefit
from any price appreciation in the applicable Underlying Stock, nor will they
receive dividends paid on the applicable Underlying Stock, if any. Accordingly,
investors will never receive at maturity an amount greater than a predetermined
amount per Security, regardless of how much the price of the applicable
Underlying Stock increases during the term of the Securities or on the
Determination Date. The return of a Security may be significantly less than the
return of a direct investment in the Underlying Stock to which the Security is
linked during the term of the Security.
Liquidity Risk
ABN AMRO does not
intend to list the Securities on any securities exchange. Accordingly, there may
be little or no secondary market for the Securities and information regarding
independent market pricing of the Securities may be limited. The value of the
Securities in the secondary market, if any, will be subject to many
unpredictable factors, including then prevailing market conditions.
It is important to note that many
factors will contribute to the secondary market value of the Securities, and
investors may not receive their full principal back if the Securities are sold
prior to maturity. Such factors include, but are not limited to, time to
maturity, the price of the applicable Underlying Stock,
volatility and interest rates.
In addition, the
price, if any, at which we or another party are willing to purchase Securities
in secondary market transactions will likely be lower than the issue price,
since the issue price included, and secondary market prices are likely to
exclude, commissions, discounts or mark-ups paid with respect to the Securities,
as well as the cost of hedging our obligations under the
Securities.
Tax Risk
Pursuant to the
terms of the Knock-in Reverse Exchangeable Securities, we and every investor
agree to characterize the Securities as consisting of a Put Option and a Deposit
of cash with the issuer. Under this characterization, a portion of the stated
interest payments on each Security is treated as interest on the Deposit, and
the remainder is treated as attributable to a sale by the investor of the Put
Option to ABN AMRO (referred to as Put Premium). Receipt of the Put Premium will
not be taxable upon receipt.
If the Put Option
expires unexercised (i.e., a cash payment of the principal amount of the
Securities is made to the investor at maturity), the investor will recognize
short-term capital gain equal to the total Put Premium received. If the Put
Option is exercised (i.e., the final payment on the Securities is paid in the
applicable Underlying Stock), the investor will not recognize any gain or loss
in respect of the Put Option, but the investor’s tax basis in the applicable
Underlying Stock received will be reduced by the Put Premium
received.
Significant aspects
of the U.S. federal income tax treatment of the Securities are uncertain, and no
assurance can be given that the Internal Revenue Service will accept, or a court
will uphold, the tax treatment described above.
This summary is
limited to the federal tax issues addressed herein. Additional issues may exist
that are not addressed in this summary and that could affect the federal tax
treatment of the transaction. This tax summary was written in connection with
the promotion or marketing by ABN AMRO Bank N.V. and the placement agent of the
Knock-in Reverse Exchangeable Securities, and it cannot be used by any investor
for the purpose of avoiding penalties that may be asserted against the investor
under the Internal Revenue Code.
Investors
should seek their own advice based on their particular circumstances from an
independent tax advisor.
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.
Reverse Exchangeable
is a Service Mark of ABN AMRO Bank N.V.
5