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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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This prospectus relates to four
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 four
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 one
month.
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Interest Payment
Dates:
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Interest on the Securities is
payable 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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Sara Lee
Corporation
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SLE
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22.00%
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1.38%
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20.62%
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80%
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00083GZ23
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US00083GZ232
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Exxon Mobil
Corporation
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XOM
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17.50%
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1.38%
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16.12%
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75%
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00083GZ31
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US00083GZ315
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McDonald's
Corporation
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MCD
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16.50%
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1.38%
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15.12%
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80%
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00083GZ49
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US00083GZ497
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Colgate-Palmolive
Company
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CL
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10.00%
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1.38%
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8.62%
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80%
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00083GZ56
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US00083GZ562
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*The Securities have a term of one
month, so you will receive a pro rata amount of this per annum rate based
on such one-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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November 21, 2008 subject to
certain adjustments as described in the related pricing
supplement
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Proposed Settlement
Date:
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November 26,
2008
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Determination
Date:
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December 22, 2008 subject to
certain adjustments as described in the related pricing supplement
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Maturity
Date:
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December 26, 2008 (One
Month)
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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.
**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 four 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 four 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.
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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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.
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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.
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, 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 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 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 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.
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.