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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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13.00% (Per Annum), Six Month
Reverse Exchangeable Securities due November 28, 2008 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 27th day of each month starting on
June 27, 2008 and ending on the Maturity Date (long last
coupon)
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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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TransDigm Group
Incorporated
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TDG
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13.00%
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2.68%
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10.32%
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80%
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00083GRC0
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US00083GRC05
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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 Size:
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USD
2,000,000
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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 Underlying Stock on the primary U.S. exchange or market for such
Underlying Stock has not fallen below the 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
Underlying Stock on the primary U.S. exchange or market for such
Underlying Stock has fallen below the 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 Underlying Stock equal to the Stock Redemption Amount, in
the event that the closing price of the Underlying Stock on the
Determination Date is below the 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 Underlying Stock on the Determination Date is at or above the 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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USD 42.06 (100% of the Closing
Price per Underlying Share on the Trade Date)
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Stock Redemption
Amount:
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23.776 shares of the Underlying
Stock per $1,000 principal amount of Securities (Denomination divided by
the Initial Price)
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Knock-In
Level:
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USD 33.65 (80% of the Initial
Price)
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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 21, 2008 subject to certain
adjustments as described in the related pricing
supplement
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Settlement
Date:
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May 27,
2008
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Determination
Date:
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November 24, 2008 subject to
certain adjustments as described in the related pricing
supplement
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Maturity
Date:
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November 28, 2008 (Six
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 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.
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.
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
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 during the Knock-in Period, and if so, (ii) the closing
price of the applicable Underlying Stock on the determination
date. To determine closing prices, we look at the prices quoted by
the relevant exchange.
• If
the closing price of the applicable Underlying Stock on the relevant exchange
has not fallen below the applicable knock-in level on any trading day during the
Knock-in Period, we will pay you the principal amount of each Security in
cash.
• If
the closing price of the applicable Underlying Stock on the relevant exchange
has fallen below the applicable knock-in level on any trading day during the
Knock-in Period, we will either:
• deliver
to you the applicable stock redemption amount, in exchange for each Security, in
the event that the closing price of the applicable Underlying Stock is below the
applicable initial price on the determination date; or
• pay
you the principal amount of each Security in cash, in the event that the closing
price of the applicable Underlying Stock is at or above the applicable initial
price on the determination date.
If due to events
beyond our reasonable control, as determined by us in our sole discretion,
shares of the 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. 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. 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
Investors
should carefully consider the risks of the Securities to which this
communication relates and whether these Securities are suited to their
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 investors to consult with
their 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 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,
investors may lose some or all of their 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 investors 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, investors 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 investors may not receive
their 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 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 the investor 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), the investor 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), the
investor will not recognize any gain or loss in
respect of the Put Option, but the investor’s 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.