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ABN
AMRO Bank N.V. Reverse Exchangeable Securities
S-NOTESSM
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Preliminary
Pricing Sheet –
January 14,
2008
9.75%
(ANNUALIZED)
SIX
MONTH
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
KNOCK-IN
REXSM
SECURITIES
DUE
JULY
18,
2008
OFFERING
PERIOD:
JANUARY
14,
2008 –
JANUARY
15,
2008
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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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9.75%
(Per Annum), Six Month
Reverse Exchangeable Securities due July 18, 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 18th
day of each month starting on
February 18, 2008 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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International
Business Machines
Corporation
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IBM
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9.75%
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4.47%
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5.28%
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75%
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00078U7L8
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US00078U7L86
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*This
Security has a term of six
months, so you will receive a pro rated amount of this per annum
rate
based on such six-month period.
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Denomination/Principal:
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$1,000
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Issue
Price:
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100%
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Payment
at
Maturity:
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The
payment at maturity for each
Security is based on the performance of the Underlying Stock linked
to
such Security:
i)
If the closing price of the applicable Underlying Stock on the
primary
U.S. exchange or market for such Underlying Stock has not fallen
below the applicable Knock-In
Level on any trading day from but not including the Pricing Date
to and
including the Determination Date, we will pay you the principal
amount of
each Security in cash.
ii)
If
the
closing price of the applicable Underlying Stock
on the primary U.S. exchange
or market for such Underlying Stock has fallen below the applicable
Knock-In Level on any trading day from but not including the Pricing
Date
to and including the Determination Date:
a)
we
will
deliver to you a number of shares
of the applicable
Underlying Stock equal to the applicable Stock Redemption Amount, in the
event that the closing price of the applicable Underlying Stock
on the
Determination Date is below the applicable Initial Price;
or
b)
we
will pay
you the principal
amount of each Security in
cash, in the event that the closing price of the applicable Underlying
Stock on the Determination Date is at or above the applicable Initial
Price.
You
will receive cash in lieu of
fractional shares.
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Initial
Price:
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100%
of the Closing Price of the
applicable Underlying Stock on the Pricing Date.
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Stock
Redemption
Amount:
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For
each $1,000 principal amount
of Security, a number of shares of the applicable Underlying Stock
linked
to such Security equal to $1,000 divided by the applicable Initial
Price.
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Knock-In
Level:
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A
percentage of the applicable
Initial Price as set forth in the
table
above.
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Indicative
Secondary
Pricing:
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•
Internet
at:
www.s-notes.com
•
Bloomberg
at: REXS2 <GO>
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Status:
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Unsecured,
unsubordinated
obligations of the Issuer
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Trustee:
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Wilmington
Trust
Company
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Securities
Administrator:
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Citibank,
N.A.
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Settlement:
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DTC,
Book Entry,
Transferable
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Selling
Restrictions:
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Sales
in the European Union must
comply with the Prospectus Directive
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Pricing
Date:
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January
15, 2008, subject to
certain adjustments as described in the related pricing
supplement
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Proposed
Settlement
Date:
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January
18,
2008
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Determination
Date:
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July
15, 2008, subject to certain
adjustments as described in the related pricing
supplement
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Maturity
Date:
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July
18, 2008 (Six
Months)
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ABN
AMRO has
filed a registration statement (including a Prospectus and Prospectus
Supplement) with the SEC for the offering to which this communication relates.
Before you invest, you should read the Prospectus and Prospectus Supplement
in
that registration statement and other documents ABN AMRO has filed with the
SEC
for more complete information about ABN AMRO and the offering of the
Securities.
You
may get
these documents for free by visiting EDGAR on the SEC website at www.sec.gov
or
by visiting ABN AMRO Holding N.V. on the SEC website at
<http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=abn&filenum=&State=&SIC=&owner=include&action=get
company>. Alternatively, ABN AMRO, any underwriter or any dealer
participating in the offering will arrange to send you the Prospectus and
Prospectus Supplement if you request it by calling toll free (888)
644-2048.
These
Securities may not be offered or sold (i) to any person/entity listed on
sanctions lists of the European Union, United States or any other applicable
local competent authority; (ii) within the territory of Cuba, Sudan, Iran
and
Myanmar; (iii) to residents in Cuba, Sudan, Iran or Myanmar; or (iv) to Cuban
Nationals, wherever located.
SUMMARY
This
prospectus
relates to one offering of Securities. The purchaser of any offering will
acquire a Security linked to a single Underlying Stock.
The
following
summary does not contain all the information that may be important to you.
You
should read this summary together with the more detailed information that
is
contained in the related Pricing Supplement and in its accompanying Prospectus
and Prospectus Supplement. You should carefully consider, among other things,
the matters set forth in “Risk Factors” in the related Pricing Supplement, which
are summarized on page 5 of this document. In addition, we urge you
to consult with your investment, legal, accounting, tax and other advisors
with
respect to any investment in the Securities.
What
are the
Securities?
The
Securities are interest paying, non-principal protected securities issued
by us,
ABN AMRO Bank N.V., and are fully and unconditionally guaranteed by our parent
company, ABN AMRO Holding N.V. The Securities are senior notes of ABN AMRO
Bank
N.V. These Securities combine certain features of debt and equity by offering
a
fixed interest rate on the principal amount while the payment at maturity
is
determined based on the performance of the Underlying Stock to which it is
linked.
What
will I
receive at maturity of the Securities?
If
the closing price of the Underlying Stock linked to a Security on the relevant
exchange 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
(such period, the “Knock-In Period”), at maturity we will pay you the principal
amount of such Security in cash.
If,
on the other hand, 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, at maturity we will either:
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•
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deliver
to you
a fixed number of shares of such Underlying Stock, which we call
the Stock
Redemption Amount, in exchange for such Security, in the event
that the
closing price of such Underlying Stock is below the applicable
Initial
Price on the Determination Date; or
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•
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pay
you the
principal amount of such Security in cash, in the event that the
closing
price of such Underlying Stock is at or above the applicable Initial
Price
on the Determination Date.
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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
You
should
carefully consider the risks of the Securities to which this communication
relates and whether these Securities are suited to your particular circumstances
before deciding to purchase them. It is important that prior to
investing in these Securities investors read the Pricing Supplement related
to
such Securities and the accompanying Prospectus and Prospectus Supplement
to
understand the actual terms of and the risks associated with the
Securities. In addition, we urge you to consult with you investment,
legal, accounting, tax and other advisors with respect to any investment
in the
Securities.
Credit
Risk
The
Securities are issued by ABN AMRO
Bank N.V. and guaranteed by ABN AMRO Holding N.V., ABN AMRO’s
parent. As a result,
investors in the Securities assume the credit risk of ABN AMRO Bank N.V.
and
that of ABN AMRO Holding N.V. in the event that ABN AMRO defaults
on its obligations under the
Securities. Any obligations or Securities sold, offered, or
recommended are not deposits on ABN AMRO Bank N.V. and are not endorsed or
guaranteed by any bank or thrift, nor are they insured by the FDIC or any
governmental
agency.
Principal
Risk
The
Securities are not ordinary debt
securities: they are not principal protected. In addition, if the
closing price of the applicable Underlying Stock falls below the applicable
Knock-In Level on any trading day during the Knock-In Period, investors
in the
Securities will be exposed to any decline in the price of the applicable
Underlying Stock below the closing price of such Underlying Stock on the
date
the Securities were priced. Accordingly,
you may lose some
or all of your
initial investment in the
Securities.
Limited
Return
The
amount payable under the Securities
will never exceed the original principal amount of the Securities plus the
applicable aggregate fixed coupon payment investors earn during the term
of the
Securities. This means that you will not benefit from any price
appreciation in the applicable Underlying Stock, nor will you receive dividends
paid on the applicable Underlying Stock, if any. Accordingly, you
will never receive at maturity an amount
greater than a predetermined amount
per Security, regardless of how much the price of the applicable Underlying
Stock increases during the term of the Securities or on the Determination
Date. The return of a Security may be significantly less than the
return
of a direct investment in the
Underlying Stock to which the Security is linked during the term of the
Security.
Liquidity
Risk
ABN
AMRO does not intend to list the
Securities on any securities exchange. Accordingly, there may be
little or no secondary
market for the Securities and information regarding independent market pricing
of the Securities may be limited. The value of the Securities in the secondary
market, if any, will be subject to many unpredictable factors, including
then
prevailing market
conditions.
It
is important to note that
many factors will contribute to the secondary market value of the Securities,
and you may not receive your full principal back if the Securities are sold
prior to maturity. Such factors
include, but are not
limited to, time to
maturity, the price of the applicable Underlying Stock, volatility and interest
rates.
In
addition, the price, if any, at which
we or another party are willing to purchase Securities in secondary market
transactions will likely be lower than the issue price,
since the issue
price included, and secondary market prices are likely to exclude, commissions,
discounts or mark-ups paid with respect to the Securities, as well as the
cost
of hedging our obligations under the Securities.
Tax
Risk
Pursuant
to the terms of the Knock-in
Reverse Exchangeable Securities, we and every investor in the Securities
agree
to characterize the Securities as consisting of a Put Option and a Deposit
of
cash with the issuer. Under this characterization, a portion of the stated
interest
payments on each Security is treated as interest on the Deposit, and the
remainder is treated as attributable to a sale by you of the Put Option to
ABN
AMRO (referred to as Put Premium). Receipt of the Put Premium will
not
be taxable upon
receipt.
If
the Put Option expires unexercised
(i.e., a cash payment of the principal amount of the Securities is made to
the
investor at maturity), you will recognize short-term capital gain
equal to the total Put Premium received. If the Put Option is
exercised (i.e.,
the final payment on the Securities is paid in the applicable Underlying
Stock),
you will not recognize any gain or loss in respect of the Put Option, but
your
tax basis in the applicable Underlying Stock received will
be reduced by the Put Premium
received.
Significant
aspects of the U.S.
federal income tax treatment of the
Securities are uncertain, and no assurance can be given that the Internal
Revenue Service will accept, or a court will uphold, the tax
treatment described
above.
This
summary is limited to the federal
tax issues addressed herein. Additional issues may exist that are not
addressed in this summary and that could affect the federal tax treatment
of the
transaction. This tax summary was written in connection with the
promotion or
marketing by ABN AMRO Bank N.V.
and the placement agent of the
Knock-in Reverse Exchangeable Securities, and it cannot be used by any investor
for the purpose of avoiding penalties that may be asserted against the
investor under the Internal
Revenue Code. You should
seek your own advice
based on 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.