Filed
pursuant to Rule 433
May
18,
2009
Relating
to Preliminary Pricing Supplement No.874 to
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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Preliminary Pricing
Sheet – May 18, 2009
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26.50% (ANNUALIZED) SIX MONTH GENERAL
CABLE
CORPORATION
KNOCK-IN REXsm SECURITIES
DUE NOVEMBER
20, 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 A+)**
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Lead Agent:
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ABN AMRO
Incorporated
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Offerings:
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26.50% (Per Annum), Six Month Reverse Exchangeable
Securities due November 20, 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 21st day of each month starting on
June 21, 2009 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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General Cable
Corporation
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BGC
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26.50%
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1.21%
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25.29%
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60%
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00083JBM9
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US00083JBM99
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*This Security has a term of six
months, so you will receive a pro rated
amount of this per annum rate based on such six-month period.
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Denomination/Principal:
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$1,000
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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 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
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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100% of the Closing Price of the
applicable Underlying Stock on the Pricing Date.
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Stock Redemption
Amount:
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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.
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Knock-In Level:
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A percentage of the applicable
Initial Price as set forth in the table above.
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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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Pricing Date:
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May 18, 2009, subject to certain adjustments as
described in the related pricing
supplement
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Settlement Date:
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May 21, 2009
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Determination Date:
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November 17, 2009, subject to certain adjustments as
described in the related pricing supplement
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Maturity Date:
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November 20, 2009 (Six Months)
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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 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 one offering of Securities. The purchaser of any offering
will acquire a Security linked to a single Underlying Stock.
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.
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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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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 because you, the investor in the Securities,
indirectly sell a put option to us on the Underlying Shares. 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 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. 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. 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.
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 you 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 you 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
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 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.
You
should seek your own advice based on your 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.