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SUMMARY
INFORMATION
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Issuer:
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ABN AMRO Bank
N.V.
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Lead Selling
Agent:
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ABN AMRO
Incorporated
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Offering:
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24 Month, Digital Buffer
Securities linked to the performance of the S&P 500 Index due
September 30, 2011 (the “Securities”)
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Underlying
Index:
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The S&P 500 Index® (Ticker:
SPX)
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Coupon:
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None. The Securities do not pay
interest.
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Denominations:
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$1,000
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Issue Size:
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TBD
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Issue
Price:
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100%
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Payment at
Maturity:
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At maturity, you will receive for
each $1,000 principal amount of Securities a cash amount calculated as
follows:
(1) if the index return is 0% or
positive, $1,000 plus the Digital Return;
(2) if the index return is less
than 0% up to and including -20%, $1,000; and
(3) if the index return is less
than -20%, $1,000 plus [(index return + 20%) x
$1,000].
If the index
return is less than -20% you could lose up to 80% of your initial
principal investment. In addition, if the index return is 0% or
positive, you will never
receive a payment at maturity greater than the Maximum Redemption at
Maturity of $1,145.
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Index
Return:
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The index return is the percentage
change in the value of the Underlying Index, calculated as
follows:
Final
Index Value -
Initial Index Value
Initial
Index Value
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Initial Index
Value:
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100% of the closing value of the
Underlying Index on the Pricing Date, subject to certain adjustments as
described in the preliminary pricing supplement for the
Securities.
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Final Index
Value:
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The closing value of the
Underlying Index on the determination date.
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Buffer
Level:
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20% buffer. An index return equal
to or less than 0% up to and including -20% will not result in the loss of
any principal. An index return of less than -20% will result in
a loss of principal which could be up to 80% of your initial principal
investment.
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Digital
Return:
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$145 (or 14.50%) per $1,000
principal amount of Securities.
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Maximum Redemption at
Maturity:
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$1,145 per $1,000 principal amount
of Securities. Regardless of how much the Underlying Index may
appreciate above the Initial Index Value you will never receive more than
$1,145 per $1,000 principal amount of Securities, at
maturity.
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Indicative Secondary Pricing:
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• Internet at: www.s-notes.com
• Bloomberg at: PIPN
<GO>
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Status:
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Unsecured, unsubordinated
obligations of the Issuer
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CUSIP
Number:
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00083JGR3
ISIN Code: US00083JGR32
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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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September 25, 2009, subject to
certain adjustments as described in the preliminary pricing supplement for
the Securities.
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Settlement
Date:
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September 30,
2009
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Determination
Date:
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September 27, 2011, subject to
certain adjustments as described in the preliminary pricing supplement for
the Securities
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Maturity
Date:
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September 30, 2011 (24
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
and the related Pricing Supplement 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=getcompany>. 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 (866) 747 4332. The pricing supplement is also found at
"http://www.us.abnamromarkets.com/MediaLibrary/Document/PDF/ProductDocuments/US00083JGR32/US00083JGR32_EN_Prospectus.pdf"
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.
Summary
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 senior notes 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 linked to
performance of the S&P
500 Index which we refer to as the Underlying Index. The Securities
have a maturity of 24 Months. The payment at maturity of the
Securities is determined based on the performance of the Underlying Index,
subject to a maximum amount, as described below. Unlike ordinary debt
securities, the Securities do not pay interest. If the index return
is less than 0% up to and including -20% you will be entitled to receive only
the principal amount of $1,000 per Security at maturity. In such a case,
you will
receive no return on your investment and you will not be compensated for any
loss in value due to inflation and other factors relating to the value of money
over time. If the index return is less than -20% you will suffer a
loss and you could lose up to 80% of your
initial principal investment. If the index return is 0% or positive
you will receive the maximum redemption at maturity per security of $1,145.00
which represents a return of 14.50%. If the index return is positive,
your return on the Securities will be
equal to the digital return of 14.50% regardless of how much or how little the
value of the Underlying Index may appreciate above the initial index value.
What will I receive
at maturity of the Securities?
At maturity you will receive,
for each $1,000 principal
amount of Securities, a cash payment calculated as follows:
(1) If the
index return is 0% or positive, $1000 plus the digital return;
or
(2) If the
index return is less than 0% up to and including -20%, $1,000;
or
(3) If the
index return is less than -20%, then $1,000
plus [(index return + 20%) x 1,000].
Accordingly, if the
index return is less than -20%, at maturity you will receive less than the
principal amount of $1,000 per Security and you could lose up to 80% of your
initial
principal investment. If the index return is 0% or positive, you will
never receive a payment at maturity greater than the maximum redemption at
maturity of $1,145.00 per $1,000 principal amount of Securities.
What is the index
return, the digital return and the maximum
redemption at maturity and how are they calculated?
The index return is the percentage
change in the index value, over the term of the Securities, calculated as:
Final Index
Value - Initial Index Value
Initial Index Value
where,
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the initial index value is the closing
value of the Underlying Index on the pricing date; and
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the final index value is the
closing value of the Underlying Index on the determination date.
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The digital return is $145 (or 14.50%)
per $1,000 principal amount of Securities.
The maximum redemption at maturity is
$1,145.00 per $1,000 principal amount of Securities which is equivalent to a
return of 14.50% on your initial principal investment. The digital
return is fixed so that regardless of how much or how little the index return may appreciate above the
initial index value, you will never receive more than $1,145.00 per $1,000
principal amount of Securities at maturity. Similarly, if the final
index value is equal to the initial index value you will receive
$1,145.00 per $1,000 principal amount of
Securities at maturity.
Will I receive
interest payments on the Securities?
No. You will not receive any interest
payments on the Securities.
Will I get my
principal back at maturity?
The Securities are not fully
principal protected.
Subject to the credit of ABN AMRO Bank, N.V. as the issuer of the Securities and
ABN AMRO Holding N.V. as the guarantor of the issuer’s obligations under the Securities, you
will receive at maturity at least $200 per $1,000 principal amount of Securities, regardless of the closing
value of the Underlying Index on the Determination Date. If the index return is
less than -20% over the term of the Securities, you will lose some of your
initial principal investment and you could lose as much as 80% of your initial principal investment.
However, if you sell the Securities
prior to maturity, you will receive the market price for the Securities, which
could be zero. There may be little or no secondary market for the Securities.
Accordingly, you should be willing to hold your securities until
maturity.
Can you give me
examples of the payment I will receive at maturity depending on the performance
of the Underlying Index?
Example
1: If, for example, in a
hypothetical offering, the initial index value is 840, the final index value is 1,000 and
the digital return is $145.00, then the index return would be calculated as
follows:
Final Index
Value - Initial Index Value
Initial Index Value
or
In this hypothetical example, the index
return is positive. Therefore, the payment at maturity will be $1000 plus the
digital return of $145.00 or a total payment of $1,145 per $1,000 principal
amount of Securities. In this hypothetical example, the index return was 19.05% but you would have
received a return of 14.50% over the term of the Securities.
Example
2: If, for
example, in a hypothetical offering, the initial index value is 840, the final
index value is 850 and the digital return is $145.00, then the index return would be calculated as
follows:
Final Index
Value - Initial Index Value
Initial Index Value
or
In this hypothetical example, the index
return is positive. Therefore, the payment at maturity will be $1000 plus the
digital return of $145.00 or a total
payment of $1,145 per $1,000 principal amount of Securities.
In this hypothetical example, the index
return was 1.19% but you would have received a return of 14.50% over the term of
the Securities. If the index return is positive, you will receive the digital
return regardless of how much or how little the index return appreciates over
the initial index value. Similarly, if the index return is 0% you
will receive the digital return.
Example
3: If, for example, in a
hypothetical offering, the
initial index value is 840 and the final index value is 714, then the index
return would be calculated as follows:
Final Index
Value - Initial Index Value
Initial Index Value
or
In this hypothetical
example, the index return is negative. Since the
index return is less than 0% but more than -20% you would receive, at maturity,
the principal amount of $1,000 per Security.
In this hypothetical example, the index
return was -15.00% and you would not have lost any of your initial principal investment
because the index return was negative but not less than -20%.
In this hypothetical example you would
not have received any return on your initial principal investment and you would
not be compensated for any loss in value due to inflation and other factors
relating to the value of money over time.
Example
4: If, for example, in a
hypothetical offering, the initial index value is 840 and the final index value
is 500, then the index return would be calculated as follows:
Final Index
Value - Initial Index Value
Initial Index Value
or
In this hypothetical example, the index
return is negative and is less than -20%. Therefore, payment at maturity will be
calculated as:
$1,000 + [(index return + 20%) x $1,000]
or
$1,000 + [(-40.48% + 20%) x $1,000] =
$795.20
Therefore, in this hypothetical example,
you would receive at maturity a total payment of $795.20 for each $1,000
principal amount of Securities. In this hypothetical example, the
index return was -40.48% but you would have
lost 20.48% of your initial principal investment over the term of the
Securities.
These examples are
for illustrative purposes only. It is not possible to predict the final value of
the Underlying Index on the determination date or at any
other time during the term of the Securities. The initial index value
is subject to adjustment as set forth in “Description of
Securities –Adjustment Events;
–Discontinuance of the
Underlying Index; Alteration of Method of Calculation” in the related
Pricing Supplement.
Is there a limit on
how much I can earn over the term of the Securities?
Yes. If the Securities are held to
maturity and the Underlying Index is unchanged or appreciates, the total amount
payable at maturity per Security is capped at $1,145.00. This
means that if the final index value is equal to the initial index value you will
receive the digital return. If the Underlying Index appreciates, no
matter how much the Underlying Index may appreciate, your return on the
Securities will never exceed 14.50%.
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
(866) 747-4332.
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 you 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
Bank N.V.’s parent. As a result, you assume the credit risk of ABN
AMRO Bank N.V. and that of ABN AMRO Holding N.V. in the event that ABN AMRO Bank
N.V. defaults on its obligations under the Securities. Any obligations or
Securities sold, offered, or recommended are not deposits of ABN AMRO Bank N.V.
and are not endorsed or guaranteed by any bank or thrift, nor are they insured
or guaranteed by the FDIC or any governmental agency.
Market
Risk
The Securities do
not pay interest. The rate of return, if any, will depend on the
performance of the Underlying Index. If the Index Return of the
Underlying Index is negative up to and including -20% you will be entitled to
receive only the principal amount of $1,000 per Security at
maturity. In such a case, you will receive no return on your
investment and you will not be compensated for any loss in value due to
inflation and other factors relating to the value of money over
time. If the Index Return is less than -20% you will suffer a loss
and you could lose up to 80% of your initial principal investment. If
the Index Return is 0% or positive, you will never receive a payment at maturity
greater than $1,145.00 regardless of how much the Underlying Index may
appreciate above the initial index value.
Principal
Risk
Return of principal
on the Securities is only guaranteed up to 20%, subject to our credit and the
credit of Holding. If the closing value of the Underlying Index on the
determination date is less than 20% below the initial value of the Underlying
Index, the amount of cash paid to you at maturity will be less than the
principal amount of the Securities and you could lose up to 80% of your initial
principal investment.
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 value the Underlying Index, 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 Securities, we and every holder of a Security agree (in the absence
of an administrative determination or judicial ruling to the contrary) to
characterize each Security for all U.S. tax purposes as a single financial
contract with respect to the Underlying Index.
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. In particular, 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.
The notice focuses
in particular on whether to require holders of instruments such as the
Securities to accrue constructive income over the term of their investment in
the Securities. It also asks for comments on a number of related topics,
including how the IRS characterizes income or loss with respect to these
instruments; the relevance to such characterization of factors such as the
exchange-traded status of the instrument and the nature of the underlying
property to which the instrument is linked; and whether these instruments are or
should be subject to the “constructive ownership” regime, which very generally
can operate to recharacterize certain long-term capital gains as ordinary income
that is subject to an interest charge.
While the notice
requests comments on appropriate transition rules and effective dates, Treasury
regulations or other forms of guidance, if any, issued after consideration of
these issues could materially and adversely affect the tax consequences of
ownership and disposition of the Securities, possibly on a retroactive
basis.
Investors should
consult their own tax advisor regarding the notice and its potential
implications for an investment in the Securities.
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 Securities, and it cannot be used
by any investor for the purpose of avoiding penalties that may be asserted by
the investor under the Internal Revenue Code. Investors should seek
their own advice based on their particular circumstances from an independent tax
advisor.