Filed
pursuant to Rule 433
March
16, 2009
Relating
to Preliminary Pricing Supplement Nos. 850 to
Registration
Statement Nos. 333-137691, 333-137691-02
Dated
September 29, 2006
|
ABN AMRO Bank N.V. Reverse
Exchangeable Securities
S-NOTESSM
|
Preliminary
Pricing Sheet – March 16, 2009
|
THREE OFFERINGS OF KNOCK-IN REXSM
SECURITIES
DUE SEPTEMBER 30,
2009
|
OFFERING
PERIOD: MARCH
16, 2009 – MARCH
26,
2009
|
|
SUMMARY
INFORMATION
|
|
|
Issuer:
|
ABN AMRO Bank N.V. (Senior Long
Term Debt Rating: Moody’s Aa2, S&P
A+)**
|
|
Lead Agent:
|
ABN AMRO
Incorporated
|
|
Offerings:
|
This prospectus relates to three
separate offerings of securities (“the Securities”). Each Security offered is linked
to one, and only one, Underlying Stock. The Underlying Stocks are set
forth in the table below. You may participate in any of the three
Securities offerings or, at your
election, in two or more of the offerings. This prospectus does not,
however, allow you to purchase a Security linked to a basket of some or
all of the Underlying Stocks described below. Each Security has
a term of six months.
|
|
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.
|
|
Underlying
Stock
|
Ticker
|
Coupon
Rate Per Annum*
|
Interest
Rate
|
Put
Premium
|
Knock-in
Level
|
CUSIP
|
ISIN
|
|
ConocoPhillips
|
COP
|
17.50%
|
1.80%
|
15.70%
|
70%
|
00083G6P4
|
US00083G6P41
|
|
McDonald's
Corporation
|
MCD
|
11.25%
|
1.80%
|
9.45%
|
80%
|
00083G6Q2
|
US00083G6Q24
|
|
Kellogg
Company
|
K
|
10.00%
|
1.80%
|
8.20%
|
80%
|
00083G6R0
|
US00083G6R07
|
|
|
*The Securities have a term of six
months, so you will receive a pro rata amount of this per annum rate based
on such six-month period.
|
|
Denomination/Principal:
|
$1,000
|
|
Issue
Price:
|
100%
|
|
Payment at
Maturity:
|
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 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
each Security in cash.
ii) If the
closing price of the applicable Underlying Stock on the primary U.S. exchange
or market for such Underlying Stock has fallen below the applicable
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 applicable
Underlying Stock equal to the applicable Stock Redemption Amount, in the
event that the closing price of the applicable Underlying Stock on the
Determination Date is below the applicable 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 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 applicable Stock Redemption Amount, the cash value of
the applicable Stock Redemption Amount,
determined by multiplying the applicable Stock Redemption Amount by the
Closing Price of the applicable Underlying Stock on the Determination
Date.
|
|
Initial
Price:
|
100% of the Closing Price of the
applicable Underlying Stock on the Pricing Date.
|
|
Stock Redemption
Amount:
|
For each $1,000 principal amount
of Security, a number of shares of the applicable Underlying Stock linked
to such Security equal to $1,000 divided by the applicable Initial
Price.
|
|
Knock-In
Level:
|
A percentage of the applicable
Initial Price as set forth in the table
above.
|
|
Indicative Secondary
Pricing:
|
•
Internet at:
www.s-notes.com
• Bloomberg at: REXS2
<GO>
|
|
Status:
|
Unsecured, unsubordinated
obligations of the Issuer
|
|
Trustee:
|
Wilmington Trust
Company
|
|
Securities
Administrator:
|
Citibank,
N.A.
|
|
Settlement:
|
DTC, Book Entry,
Transferable
|
|
Selling
Restrictions:
|
Sales in the European Union must
comply with the Prospectus Directive
|
|
Proposed Pricing
Date:
|
March 26, 2009, subject to certain
adjustments as described in the related pricing
supplement
|
|
Proposed Settlement
Date:
|
March 31,
2009
|
|
Determination
Date:
|
September 25, 2009, subject to
certain adjustments as described in the related pricing
supplement
|
|
Maturity
Date:
|
September 30, 2009 (Six
Months)
|
ABN
AMRO has filed a registration statement (including a Prospectus and Prospectus
Supplement) with the SEC for the offerings 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 offerings of the
Securities.
You
may get these documents for free by visiting EDGAR on the SEC website at
www.sec.gov or by visiting ABN AMRO Holding N.V. on the SEC website at
<http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=abn&filenum=&State=&SIC=&owner=include&action=get
company>. 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.
We
reserve the right to withdraw, cancel or modify any offering and to reject
orders in whole or in part.
**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.
SUMMARY
This
prospectus relates to three separate offerings of Securities. Each
Security offered is linked to one, and only one, of the Underlying Stocks
described on the cover page. 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 of the Underlying Stocks. You may participate in any
of the three offerings or, at your election, in several or all
offerings.
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. Therefore your principal is at risk but you
have no opportunity to participate in any appreciation of the Underlying
Stock.
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.
•
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.
• 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:
• 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
• 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 applicable Stock
Redemption Amount, the cash value of the applicable
Stock Redemption Amount, determined by
multiplying the applicable Stock Redemption Amount
by the Closing Price of the applicable
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. 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 Stock 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 Stock 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 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 on the Determination Date 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. If the price of
the Underlying Stock rises above the initial price you
will
not participate in any appreciation in the price of the Underlying
Stock.
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, 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. If the securities had a term less than one
year, you would have received a pro-rata percentage of this interest rate. 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
“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.
RISK
FACTORS
You
should carefully consider the risks of the Securities to which this
communication relates and whether these Securities are suited to your 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 you to consult with your 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 in the Securities 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, you may
lose some or all of your 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 you 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, you 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
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
of 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
.
It is important to
note that many factors will contribute to the secondary market value of the
Securities, and you may not receive your 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 in the Securities 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 you 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), you 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), you will not recognize
any gain or loss in respect of the Put Option, but your 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