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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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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.
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Interest Payment
Dates:
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Interest on the Securities is
payable monthly in arrears on the 18th day of each month starting on
March 18, 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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Wells Fargo &
Company
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WFC
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29.85%
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1.67%
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28.18%
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50%
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00083G5H3
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US00083G5H34
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General Electric
Company
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GE
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24.25%
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1.67%
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22.58%
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50%
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00083G5J9
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US00083G5J99
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Microsoft
Corporation
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MSFT
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14.50%
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1.67%
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12.83%
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70%
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00083G5K6
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US00083G5K62
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*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.
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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 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.
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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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Proposed Pricing
Date:
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February 12, 2009, subject to
certain adjustments as described in the related pricing
supplement
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Proposed Settlement
Date:
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February 18,
2009
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Determination
Date:
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August 13, 2009, subject to
certain adjustments as described in the related pricing
supplement
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Maturity
Date:
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August 18, 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 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 applicable Underlying Stock are
not available for protected
securities issued by us, ABN AMRO Bank delivery at maturity we may pay you, in
lieu of the N.V., and are fully and unconditionally guaranteed by applicable
Stock Redemption Amount, the cash value our parent company, ABN AMRO Holding
N.V. The of the applicable Stock Redemption Amount, Securities are senior notes
of ABN AMRO Bank N.V. determined by multiplying the applicable Stock These
Securities combine certain features of debt and Redemption Amount by the Closing
Price of the equity by offering a fixed interest rate on the principal
applicable Underlying Stock on the Determination amount while the payment at
maturity is determined Date. 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.
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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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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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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