PRICING SUPPLEMENT PRICING SUPPLEMENT NO. 512 TO
(TO PROSPECTUS DATED REGISTRATION STATEMENT NOS. 333-137691,
SEPTEMBER 29, 2006 333-137691-02
AND PROSPECTUS SUPPLEMENT DATED FEBRUARY 13, 2008
DATED SEPTEMBER 29, 2006) RULE 424(b)(2)
CUSIP: 00083GDV3
[ABN AMRO LOGO]
$500,000
ABN AMRO BANK N.V.
ABN NOTES(SM)
SENIOR FIXED RATE NOTES
FULLY AND UNCONDITIONALLY GUARANTEED BY
ABN AMRO HOLDING N.V.
----------------
11.15% KNOCK-IN REVERSE EXCHANGEABLE(SM) SECURITIES DUE FEBRUARY 19, 2009
LINKED TO COMMON STOCK OF LOEWS CORPORATION
The Securities do not guarantee any return of principal at maturity. Instead,
the payout at maturity will be based on the performance of the shares of common
stock of Loews Corporation, which we refer to as the Underlying Shares, during
the life of the Securities, and in certain circumstances described below, we
will exchange each Security at maturity for a predetermined number of the
Underlying Shares rather than the principal amount of the Securities. THE
MARKET VALUE OF THOSE UNDERLYING SHARES WILL BE LESS THAN THE PRINCIPAL AMOUNT
OF EACH SECURITY AND COULD BE ZERO.
SECURITIES 11.15% Knock-in Reverse Exchangeable(SM)
Securities due February 19, 2009.
PRINCIPAL AMOUNT $500,000
UNDERLYING SHARES Common Stock, $0.01 par value per share, of Loews
Corporation
INTEREST RATE 11.15% per annum, payable monthly in arrears on
the 19th day of each month commencing on March 19,
2008 and ending on the maturity date.
ISSUE PRICE 100%
ORIGINAL ISSUE DATE February 19, 2008
PRICING DATE February 13, 2008
MATURITY DATE February 19, 2009
INITIAL PRICE $42.92 (the initial price is subject to adjustment
for certain corporate events affecting the
Underlying Shares, which we describe in
"Description of Securities -- Adjustment Events").
KNOCK-IN LEVEL $32.19 which is 75% of the initial price.
STOCK REDEMPTION AMOUNT 23.299 Underlying Shares for each $1,000 principal
amount of the Securities, which is equal to $1,000
divided by the initial price.
DETERMINATION DATE February 13, 2009, subject to adjustment in
certain circumstances which we describe in
"Description of the Securities -- Determination
Date."
PAYMENT AT MATURITY The payment at maturity is based on the
performance of the Underlying Shares:
o If the closing price of the Underlying Shares
on the primary U.S. exchange or market for
the Underlying Shares 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.
o If the closing price of the Underlying Shares
on the primary U.S. exchange or market for
the Underlying Shares falls below the
knock-in level on any trading day from but
not including the pricing date to and
including the determination date:
-- we will deliver to you a number of
Underlying Shares equal to the stock
redemption amount, in the event that the
closing price of the Underlying Shares
on the determination date is below the
initial price; or
-- we will pay you the principal amount of
each Security in cash, in the event that
the closing price of the Underlying
Shares on the determination date is at
or above the initial price.
o 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,
Underlying Shares 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 Shares on the Determination Date.
The payment at maturity is subject to adjustment
in certain circumstances.
GUARANTEE The Securities will be fully and unconditionally
guaranteed by ABN AMRO Holding N.V.
DENOMINATIONS The Securities may be purchased in denominations
of $1,000 and integral multiples thereof.
NO AFFILIATION WITH Loews Corporation, which we refer to as "Loews,"
LOEWS CORPORATION is not an affiliate of ours and is not involved
with this offering in any way. The obligations
represented by the Securities are our obligations,
not those of Loews. Investing in the Securities is
not equivalent to investing in Loews common stock.
LISTING We do not intend to list the Securities on any
securities exchange.
THE SECURITIES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER FEDERAL AGENCY.
THE SECURITIES INVOLVE RISKS NOT ASSOCIATED WITH AN INVESTMENT IN CONVENTIONAL
DEBT SECURITIES. SEE "RISK FACTORS" BEGINNING ON PS-8.
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these Securities, or determined if this Pricing
Supplement or the accompanying Prospectus Supplement or Prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The agents are not obligated to purchase the Securities but have agreed to use
reasonable efforts to solicit offers to purchase the Securities. TO THE EXTENT
THE FULL AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES BEING OFFERED BY THIS
PRICING SUPPLEMENT IS NOT PURCHASED BY INVESTORS IN THE OFFERING, ONE OR MORE
OF OUR AFFILIATES HAS AGREED TO PURCHASE THE UNSOLD PORTION, WHICH MAY
CONSTITUTE A SUBSTANTIAL PORTION OF THE TOTAL AGGREGATE PRINCIPAL AMOUNT OF THE
SECURITIES, AND TO HOLD SUCH SECURITIES FOR INVESTMENT PURPOSES. SEE "HOLDING
OF THE SECURITIES BY OUR AFFILIATES AND FUTURE SALES" UNDER THE HEADING "RISK
FACTORS" AND "PLAN OF DISTRIBUTION." This Pricing Supplement and the
accompanying Prospectus Supplement and Prospectus may be used by our affiliates
in connection with offers and sales of the Securities in market-making
transactions.
PRICE $1,000 PER SECURITY
PRICE TO PUBLIC AGENT'S COMMISSIONS(1) PROCEEDS TO ABN AMRO BANK N.V.
Loews Corporation 100% 2.50% 97.50%
Total $500,000 $12,500 $487,500
(1) For additional information see "Plan of Distribution" in this pricing
supplement.
ABN AMRO INCORPORATED
In this Pricing Supplement, the "Bank," "we," "us" and "our" refer to ABN
AMRO Bank N.V. and "Holding" refers to ABN AMRO Holding N.V., our parent
company. We refer to the Securities offered hereby and the related guarantees
as the "Securities" and to each individual security offered hereby as a
"Security."
Reverse Exchangeable(SM) and ABN Notes(SM) are service marks of ABN AMRO
Bank N.V.
ANY SECURITIES ISSUED, SOLD OR DISTRIBUTED PURSUANT TO THIS PRICING
SUPPLEMENT 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.
PS-2
SUMMARY
THE FOLLOWING SUMMARY ANSWERS SOME QUESTIONS THAT YOU MIGHT HAVE REGARDING
THE SECURITIES IN GENERAL TERMS ONLY. IT DOES NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE SUMMARY TOGETHER WITH THE
MORE DETAILED INFORMATION THAT IS CONTAINED IN THE REST OF THIS PRICING
SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS AND PROSPECTUS SUPPLEMENT. YOU
SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE MATTERS SET FORTH IN "RISK
FACTORS." 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. and have a maturity of one year. 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 Shares. Therefore your principal is at risk.
The Securities have certain features that make them what we refer to as
"Knock-in Reverse Exchangeable Securities." This means that if the closing
price of the Underlying Shares on the primary U.S. securities exchange or
organized market for the Underlying Shares, which we refer to as the relevant
exchange, never falls below a certain price level, which we call 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"), then we
will pay you in cash the principal amount of each Security at maturity. On the
other hand, if the closing price of the Underlying Shares on the relevant
exchange falls below the knock-in level on any trading day during the Knock-in
Period, then the payment at maturity will depend on the closing price of the
Underlying Shares on the determination date. In this latter case, if the
closing price of the Underlying Shares on the determination date is equal to or
greater than the initial price, we will pay you in cash the principal amount of
each Security you hold; if the closing price of the Underlying Shares on the
determination date is less than the initial price, we will deliver to you, in
exchange for each $1,000 principal amount of Securities, a number of Underlying
Shares equal to the stock redemption amount.
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 Underlying Shares.
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 Underlying Shares on the relevant
exchange falls below the knock-in level on any trading day during the Knock-in
Period, and on the determination date the closing price per Underlying Share is
less than the initial price, you will receive a fixed number of Underlying
Shares for each Security you hold, which we call the stock redemption amount.
On the other hand, if the closing price of the Underlying Shares on the
relevant exchange falls below the knock-in level, and on the determination date
the closing price per Underlying Share is equal to or greater than the initial
price, you will receive $1,000 for each Security you hold. Because of the
exchangeability of the Securities, and because we will determine whether you
will receive cash or Underlying Shares by reference to the closing price of the
Underlying Shares on the determination date, such securities are generally
referred to as "reverse exchangeable securities." However, because this feature
of exchangeability is created only if the closing price of the Underlying
Shares on the relevant exchange falls below the knock-in level on any trading
day during the Knock-in Period, we call the Securities "Knock-in Reverse
Exchangeable Securities."
WHAT WILL I RECEIVE AT MATURITY OF THE SECURITIES?
The payment at maturity of the Securities will depend on (i) whether or not
the closing price of the Underlying Shares fell below the knock-in level on any
trading day during the Knock-in Period, and if so, (ii) the closing price of
the Underlying Shares on
PS-3
the determination date. To determine closing prices, we look at the prices
quoted by the relevant exchange.
o If the closing price per Underlying Share on the relevant exchange has
not fallen below the knock-in level on any trading day during the
Knock-in Period, we will pay you the principal amount of each Security
in cash.
o If the closing price per Underlying Share on the relevant exchange has
fallen below the knock-in level on any trading day during the Knock-in
Period, we will either:
o deliver to you the stock redemption amount, in exchange for each
Security, in the event that the closing price of the Underlying
Shares is below the initial price on the determination date; or
o pay you the principal amount of each Security in cash, in the event
that the closing price of the Underlying Shares is at or above the
initial price on the determination date.
If due to events beyond our reasonable control, as determined by us in our
sole discretion, Underlying Shares 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 Shares on the Determination Date.
The payment at maturity is further subject to adjustment in certain
circumstances, which we describe in "Description of Securities -- Adjustment
Events.
HOW ARE THE STOCK REDEMPTION AMOUNT AND KNOCK-IN LEVEL DETERMINED?
The stock redemption amount for each $1,000 principal amount of the
Securities is equal to $1,000 divided by the initial price. The value of any
fractional shares you are entitled to receive, after aggregating your total
holdings of the Securities, will be paid in cash based on the closing price of
the Underlying Shares on the determination date.
The knock-in level is 75% of the initial price.
The initial price and consequently the stock redemption amount and knock-in
level are subject to adjustment for certain corporate events affecting the
Underlying Shares, which we describe in "Description of Securities --
Adjustment Events."
WHAT INTEREST PAYMENTS CAN I EXPECT ON THE SECURITIES?
The Securities pay interest at a rate of 11.15% per annum. The interest
rate is fixed at issue and is payable monthly in arrears. This means that
irrespective of whether the Securities are exchanged at maturity for cash or
the stock redemption amount, you will be entitled to monthly interest payments
on the full principal amount of the Securities you hold, payable in cash.
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
PS-4
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. FOR EACH OFFERING OF SECURITIES, WE WILL SET THE INITIAL
PRICE, KNOCK-IN LEVEL AND STOCK REDEMPTION AMOUNT (SUBJECT TO ADJUSTMENT FOR
CERTAIN CORPORATE EVENTS AFFECTING THE APPLICABLE UNDERLYING SHARES) ON THE
DATE WE PRICE THE SECURITIES, WHICH WE REFER TO AS THE PRICING DATE. IT IS NOT
POSSIBLE, HOWEVER, TO PREDICT THE CLOSING PRICE OF ANY OF THE UNDERLYING SHARES
ON THE DETERMINATION DATE OR AT ANY TIME DURING THE LIFE OF THE SECURITIES.
In this Pricing Supplement, we have provided under the heading
"Hypothetical Sensitivity Analysis of Total Return of the Securities at
Maturity" the total return of owning the Securities through maturity for
various hypothetical closing prices of the Underlying Shares on the
determination date in the case where the knock-in level has been breached and
in the case where the knock-in level has not been breached.
DO I GET ALL MY PRINCIPAL BACK AT MATURITY?
You are not guaranteed to receive any return of principal at maturity. If
the closing price of Underlying Shares falls below the knock-in level on any
trading day during the Knock-in Period, and the closing price of the Underlying
Shares is below the initial price on the determination date, we will deliver to
you Underlying Shares. The market value of the Underlying Shares at the time
you receive those shares will be less than the principal amount of the
Securities and could be zero.
IS THERE A LIMIT TO HOW MUCH I CAN EARN OVER THE LIFE OF THE SECURITIES?
Yes. The amount payable under the terms of the Securities will never exceed
the principal amount of the Securities payable at maturity plus interest
payments you earn over the life of the Securities.
DO I BENEFIT FROM ANY APPRECIATION IN THE UNDERLYING SHARES 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. As a result, if the Underlying Shares have
appreciated above their price level on the pricing date, the payment you
receive at maturity will not reflect that appreciation. UNDER NO CIRCUMSTANCES
WILL YOU RECEIVE A PAYMENT AT MATURITY GREATER THAN THE PRINCIPAL AMOUNT OF THE
SECURITIES THAT YOU HOLD AT THAT TIME.
WHAT IS THE MINIMUM REQUIRED PURCHASE?
You can purchase Securities in $1,000 denominations or in integral
multiples thereof.
IS THERE A SECONDARY MARKET FOR THE SECURITIES?
We do not intend to list the Securities on any securities exchange.
Accordingly, there may be little or no secondary market for the Securities and,
as such, information regarding independent market pricing for the Securities
may be limited. You should be willing to hold your Securities until the
maturity date.
Although it is not required to do so, we have been informed by our
affiliate that when this offering is complete, it intends to make purchases and
sales of the Securities from time to time in off-exchange transactions. If our
affiliate does make such a market in the Securities, it may stop doing so at
any time.
In connection with any secondary market activity in the Securities, our
affiliate may post indicative prices for the Securities on a designated website
or via Bloomberg. However, our affiliate is not required to post such
indicative prices and may stop doing so at any time. INVESTORS ARE ADVISED THAT
ANY PRICES SHOWN ON ANY WEBSITE OR BLOOMBERG PAGE ARE INDICATIVE PRICES ONLY
AND, AS SUCH, THERE CAN BE NO ASSURANCE THAT ANY TRADE COULD BE EXECUTED AT
SUCH PRICES. Investors should contact their brokerage firm for further
information.
In addition, the issue price of the Securities includes the selling agents'
commissions paid with respect to the Securities and the cost of hedging our
obligations under the Securities. The cost of hedging
PS-5
includes the profit component that our affiliate has charged in consideration
for assuming the risks inherent in managing the hedging the transactions. The
fact that the issue price of the Securities includes these commissions and
hedging costs is expected to adversely affect the secondary market prices of the
Securities. See "Risk Factors--The Inclusion of Commissions and Cost of Hedging
in the Issue Price is Likely to Adversely Affect Secondary Market Prices" and
"Use of Proceeds."
TELL ME MORE ABOUT ABN AMRO BANK N.V. AND ABN AMRO HOLDING N.V.
ABN AMRO Bank N.V. is an international banking group offering a wide range
of banking products and financial services on a global basis through our network
of offices and branches in 56 countries and territories as of year-end 2006. ABN
AMRO Holding N.V. is the parent company of ABN AMRO Bank N.V. Holding's main
purpose is to own the Bank and its subsidiaries. All of the Securities issued by
the Bank hereunder are fully and unconditionally guaranteed by Holding.
On November 2, 2007 a consortium (the "Consortium") of the Royal Bank of
Scotland Group plc, Fortis SA/NV and Fortis N.V., and Banco Santander Central
Hispano SA, which had made a tender offer for the shares of Holding, announced
that approximately 98.8% of the shares of Holding had been tendered to the
Consortium as of October 31, 2007.
Holdings is currently listed on Euronext and the New York Stock Exchange.
ABN AMRO Bank N.V. is rated AA- by Standard & Poor's and Aa2 by Moody's.
WHERE CAN I FIND OUT MORE ABOUT LOEWS?
Because the Underlying Shares are registered under the Securities Exchange
Act of 1934, as amended, Loews is required to file periodically certain
financial and other information specified by the Commission which is available
to the public. You should read "Public Information Regarding the Underlying
Shares" in this Pricing Supplement to learn how to obtain public information
regarding the Underlying Shares and other important information. The historical
highest intra-day price, lowest intra-day price and last day closing price of
the Underlying Shares for each quarter since 2003 are set forth under the
heading "Public Information Regarding the Underlying Shares" in this Pricing
Supplement.
WHO WILL DETERMINE WHETHER THE CLOSING PRICE OF THE UNDERLYING SHARES HAS
FALLEN BELOW THE KNOCK-IN LEVEL, THE CLOSING PRICE OF THE UNDERLYING SHARES ON
THE DETERMINATION DATE, THE STOCK REDEMPTION AMOUNT AND THE INITIAL PRICE?
We have appointed ABN AMRO Incorporated, which we refer to as AAI, to act
as calculation agent for Wilmington Trust Company, the trustee for the
Securities and Citibank, N.A., the securities administrator. As calculation
agent, AAI will determine whether the closing price of the Underlying Shares
has fallen below the knock-in level, the closing price of the Underlying Shares
on the determination date, the stock redemption amount and the initial price.
The calculation agent may adjust the initial price of the Underlying Shares and
consequently the stock redemption amount and knock-in level, which we describe
in the section called "Description of Securities -- Adjustment Events."
WHO INVESTS IN THE SECURITIES?
The Securities are not suitable for all investors. The Securities might be
considered by investors who:
o seek a higher interest rate than the current dividend yield on the
Underlying Shares or the yield on a conventional debt security with the same
maturity issued by us or an issuer with a comparable credit rating;
o are willing to accept the risk of owning equity in general and the
Underlying Shares in particular and the risk that they could lose their
entire investment;
o do not expect to participate in any appreciation in the price of the
Underlying Shares; and
o and are willing to hold the Securities until maturity.
You should carefully consider whether the Securities are suited to your
particular circumstances before you decide to purchase them. 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 SOME OF THE RISKS IN OWNING THE SECURITIES?
Investing in the Securities involves a number of risks. We have described
the most significant risks relating to the Securities under the heading "Risk
PS-6
Factors" in this Pricing Supplement which you should read before making an
investment in the Securities.
Some selected risk considerations include:
o CREDIT RISK. Because you are purchasing a security from us, you are assuming
our credit risk. In addition, because the Securities are fully and
unconditionally guaranteed by Holding, you are assuming the credit risk of
Holding in the event that we fail to make any payment or delivery required
by the terms of the Securities.
o PRINCIPAL RISK. The Securities are not principal protected, which means
there is no guaranteed return of principal. If the closing price of the
Underlying Shares falls below the knock-in level on any trading day during
the life of the Securities and the closing price on the determination date
is less than the initial price, we will deliver to you a fixed number of
Underlying Shares with a market value less than the principal amount of the
Securities, which value may be zero.
o LIQUIDITY AND MARKET RISK. We do 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 for
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.
WHAT IF I HAVE MORE QUESTIONS?
You should read "Description of Securities" in this Pricing Supplement for
a detailed description of the terms of the Securities. The Securities are senior
notes issued as part of our ABN Notes(SM) program and guaranteed by Holding. The
Securities offered by the Bank will constitute the Bank's unsecured and
unsubordinated obligations and rank pari passu without any preference among them
and with all our other present and future unsecured and unsubordinated
obligations. The guarantee of Holding will constitute Holding's unsecured and
unsubordinated obligations and rank pari passu without any preference among them
and with all Holding's other present and future unsecured and unsubordinated
obligations. You can find a general description of our ABN Notes(SM) program in
the accompanying Prospectus Supplement. We also describe the basic features of
this type of note in the sections called "Description of Notes" and "Notes
Linked to Commodity Prices, Single Securities, Baskets of Securities or
Indices".
You may contact our principal executive offices at Gustav Mahleraan 10,
1082 PP Amsterdam, The Netherlands. Our telephone number is (54-20) 628-9393.
PS-7
RISK FACTORS
This section describes the most significant risks relating to the
Securities. For a discussion of certain general risks associated with your
investment in the Securities, please refer to the section entitled "Risk
Factors" beginning on page S-3 of the accompanying prospectus supplement. YOU
SHOULD CAREFULLY CONSIDER WHETHER THE SECURITIES ARE SUITED TO YOUR PARTICULAR
CIRCUMSTANCES BEFORE YOU DECIDE TO PURCHASE THEM. IN ADDITION, WE URGE YOU TO
CONSULT WITH YOUR INVESTMENT, LEGAL, ACCOUNTING, TAX AND OTHER ADVISORS WITH
RESPECT TO ANY INVESTMENT IN THE SECURITIES.
THE SECURITIES ARE NOT ORDINARY SENIOR NOTES; THERE IS NO GUARANTEED RETURN OF
PRINCIPAL
The Securities combine limited features of debt and equity. The terms of
the Securities differ from those of ordinary debt securities in that we will
not pay you a fixed principal amount in cash at maturity if the closing price
of the Underlying Shares has fallen below the knock-in level on any trading day
during the Knock-in Period and, in addition, the closing price of the
Underlying Shares is below the initial price on the determination date. In such
event, we will exchange each Security you hold for a number of Underlying
Shares equal to the stock redemption amount. Such shares will have a market
value of less than the principal amount of the Securities, and such value may
be zero. You cannot predict the future performance of the Underlying Shares
based on their historical performance. ACCORDINGLY, YOU COULD LOSE SOME OR ALL
OF THE AMOUNT YOU INVEST IN THE SECURITIES.
THE SECURITIES WILL NOT PAY MORE THAN THE STATED PRINCIPAL AMOUNT AT MATURITY
The amount paid at maturity of the Securities in cash or Underlying Shares
will not exceed the principal amount of the Securities. If the closing price of
the Underlying Shares on the determination date is equal to or exceeds the
initial price (regardless of whether the knock-in level has been previously
breached), you will receive the principal amount of the Securities irrespective
of any appreciation in the share price. You will not receive Underlying Shares
or any other asset equal to the value of the Underlying Shares. As a result, if
the Underlying Shares have appreciated above their closing price level on the
pricing date, the payment you receive at maturity will not reflect that
appreciation. UNDER NO CIRCUMSTANCES WILL YOU RECEIVE A PAYMENT AT MATURITY
GREATER THAN THE PRINCIPAL AMOUNT OF THE SECURITIES THAT YOU HOLD AT THAT TIME.
WE DO NOT INTEND TO LIST THE SECURITIES ON ANY SECURITIES EXCHANGE; SECONDARY
TRADING MAY BE LIMITED
You should be willing to hold your Securities until the maturity date. We
do 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 for the Securities may be limited. Even if
there is a secondary market, it may not provide enough liquidity to allow you
to trade or sell the Securities easily. Upon completion of the offering, our
affiliate has informed us that it intends to purchase and sell the Securities
from time to time in off-exchange transactions, but it is not required to do
so. If our affiliate does make such a market in the Securities, it may stop
doing so at any time. In addition, the total principal amount of the Securities
being offered is not being purchased by investors in the offering, and one or
more of our affiliates has agreed to purchase the unsold portion. Such
affiliate or affiliates intend to hold the Securities for investment purposes,
which may affect the supply of Securities available for secondary trading and
therefore adversely affect the price of the Securities in any secondary
trading. If a substantial portion of any Securities held by our affiliates were
to be offered for sale following this offering, the market price of such
Securities could fall, especially if secondary trading in such Securities is
limited or illiquid.
MARKET PRICE OF THE SECURITIES INFLUENCED BY MANY UNPREDICTABLE FACTORS
The value of the Securities may move up and down between the date you
purchase them and the determination date when the calculation agent determines
the amount to be paid to the holders of the Securities on the maturity date.
Several factors, many of which are beyond our control, will influence the
value of the Securities, including:
o the market price of the Underlying Shares, in particular, whether the
market price of the Underlying Shares has fallen below the knock-in
level;
PS-8
o the volatility (frequency and magnitude of changes) in the price of the
Underlying Shares;
o the dividend rate on the Underlying Shares. While dividend payments on
the Underlying Shares, if any, are not paid to holders of the
Securities, such payments may have an influence on the market price of
the Underlying Shares and therefore on the Securities;
o interest and yield rates in the market;
o economic, financial, political and regulatory or judicial events that
affect the stock markets generally and which may affect the closing
price of the Underlying Shares and/or the Securities;
o the time remaining to the maturity of the Securities; and
o the creditworthiness of the Bank as issuer of the Securities and
Holding as the guarantor of the Bank's obligations under the
Securities. Any person who purchases the Securities is relying upon the
creditworthiness of the Bank and Holding and has no rights against any
other person. The Securities constitute the general, unsecured and
unsubordinated contractual obligations of the Bank and Holding.
Some or all of these factors will influence the price that you will receive
if you sell your Securities in the secondary market, if any, prior to maturity.
For example, you may have to sell your Securities at a substantial discount
from the principal amount if at the time of sale the market price of the
Underlying Shares is at, below, or not sufficiently above the knock-in level.
See "Risk Factors--The Inclusion of Commissions and Cost of Hedging in the
Issue Price is Likely to Adversely Affect Secondary Market Prices."
THE INCLUSION OF COMMISSIONS AND COST OF HEDGING IN THE ISSUE PRICE IS LIKELY TO
ADVERSELY AFFECT SECONDARY MARKET PRICES
Assuming no change in market conditions or any other relevant factors, the
price, if any, at which the selling agents 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 paid with respect to the Securities, as well as the profit
component included in the cost of hedging our obligations under the Securities.
In addition, any such prices may differ from values determined by pricing
models used by the selling agents, as a result of dealer discounts, mark-ups or
other transaction costs.
AN INCREASE IN THE VALUE OF THE UNDERLYING SHARES WILL NOT INCREASE THE RETURN
ON YOUR INVESTMENT
Owning the Securities is not the same as owning the Underlying Shares.
Accordingly, the market value of your Securities may not have a direct
relationship with the market price of the Underlying Shares, and changes in the
market price of the Underlying Shares may not result in a comparable change in
the market value of your Securities. If the price per Underlying Share
increases above the initial price, the market value of the Securities may not
increase. It is also possible for the price of the Underlying Shares to
increase while the market price of the Securities declines.
WE MAY NOT BE ABLE TO DELIVER UNDERLYING SHARES AT MATURITY
If due to events beyond our reasonable control, as determined by us in
our sole discretion, Underlying Shares are not available for delivery at
maturity we may pay you cash in lieu of delivering Underlying Shares. In such a
case, the amount of cash we will deliver will be an amount calculated by
multiplying the Stock Redemption Amount by the Closing Price of the Underlying
Shares on the Determination Date. Accordingly, if you have sold Underlying
Shares and your sale is to settle on the maturity date or you have otherwise
agreed to deliver Underlying Shares on the maturity date, your trade may fail
in the event we do not deliver Underlying Shares to you.
PS-9
POTENTIAL CONFLICTS OF INTEREST; NO SECURITY INTEREST IN THE UNDERLYING SHARES
HELD BY US
We and our affiliates may carry out hedging activities that minimize our
risks related to the Securities, including trading in the Underlying Shares. In
particular, on or prior to the date of this Pricing Supplement, we, through our
affiliates, hedged our anticipated exposure in connection with the Securities
by taking positions in the Underlying Shares, options contracts on Underlying
Shares listed on major securities markets, and/or other instruments that we
deemed appropriate in connection with such hedging. Such hedging is carried out
in a manner designed to minimize any impact on the price of the Underlying
Shares. Our purchase activity, however, could potentially have increased the
initial price of the Underlying Shares, and therefore inadvertently increased
the level below which we would be required to deliver to you at maturity
Underlying Shares, which, in turn, would have a value less than the principal
amount of your Securities.
Through our affiliates, we are likely to modify our hedge position
throughout the life of the Securities by purchasing and selling Underlying
Shares, options contracts on Underlying Shares listed on major securities
markets or positions in other securities or instruments that we may wish to use
in connection with such hedging. Although we have no reason to believe that our
hedging activity or other trading activities that we, or any of our affiliates,
engage in or may engage in has had or will have a material impact on the price
of the Underlying Shares, we cannot give you any assurance that we have not or
will not affect such price as a result of our hedging or trading activities. It
is possible that we or one of more of our affiliates could receive substantial
returns from these hedging activities while the value of the Securities may
decline. We or one or more of our affiliates may also engage in trading the
Underlying Shares and other investments relating to Loews on a regular basis as
part of our or its general broker-dealer and other businesses, for proprietary
accounts, for other accounts under management or to facilitate transactions for
customers, including block transactions. Any of these activities could
adversely affect the price of the Underlying Shares and, therefore, the value
of the Securities. We or one or more of our affiliates may also issue or
underwrite other securities or financial or derivative instruments with returns
linked or related to changes in the value of the Underlying Shares. By
introducing competing products into the marketplace in this manner, we or one
or more of our affiliates could adversely effect the value of the Securities.
It is also possible that any advisory services that we or our affiliates
provide in the course of any business with Loews or its affiliates could lead
to actions on the part of the issuer of the stock which might adversely affect
the value of the Underlying Shares.
The indenture governing the Securities does not contain any restrictions on
our ability or the ability of any of our affiliates to sell, pledge or
otherwise convey all or any portion of the Underlying Shares acquired by us or
our affiliates. Neither we nor Holding nor any of our affiliates will pledge or
otherwise hold Underlying Shares for the benefit of holders of the Securities
in order to enable the holders to exchange their Securities for Underlying
Shares under any circumstances. Consequently, in the event of a bankruptcy,
insolvency or liquidation involving us or Holding, as the case may be, any
Underlying Shares that we or Holding own will be subject to the claims of our
creditors or Holding's creditors generally and will not be available
specifically for the benefit of the holders of the Securities.
NO SHAREHOLDER RIGHTS IN THE UNDERLYING SHARES
As a holder of the Securities, you will not have voting rights or rights to
receive dividends or other distributions or other rights that holders of
Underlying Shares would have.
Because neither we nor Holding nor any of our affiliates are affiliated
with Loews, we have no ability to control or predict the actions of Loews,
including any corporate actions of the type that would require the calculation
agent to adjust the initial price and consequently the knock-in level and stock
redemption amount, and have no ability to control the public disclosure of
these corporate actions or any other events or circumstances affecting Loews.
LOEWS IS NOT INVOLVED IN THE OFFER OF THE SECURITIES IN ANY WAY AND HAS NO
OBLIGATION TO CONSIDER YOUR INTEREST AS AN OWNER OF THE SECURITIES IN TAKING
ANY CORPORATE ACTIONS THAT MIGHT AFFECT THE VALUE OF YOUR SECURITIES. NONE OF
THE MONEY YOU PAY FOR THE SECURITIES WILL GO TO LOEWS.
INFORMATION REGARDING LOEWS
Neither we nor Holding nor any of our affiliates assume any responsibility
for the adequacy of the information about Loews contained in this Pricing
Supplement or in any of Loews' publicly available filings. AS AN INVESTOR IN
PS-10
THE SECURITIES, YOU SHOULD MAKE YOUR OWN INVESTIGATION INTO LOEWS. NEITHER WE
NOR HOLDING NOR ANY OF OUR AFFILIATES HAVE ANY AFFILIATION WITH LOEWS, AND ARE
NOT RESPONSIBLE FOR LOEWS' PUBLIC DISCLOSURE OF INFORMATION, WHETHER CONTAINED
IN SEC FILINGS OR OTHERWISE.
LIMITED ANTIDILUTION PROTECTION
AAI, as calculation agent, will adjust the initial price and consequently
the stock redemption amount and knock-in level for certain events affecting the
Underlying Shares, such as stock splits and corporate actions. The calculation
agent is not required to make an adjustment for every corporate action which
affects the Underlying Shares. For example, the calculation agent is not
required to make any adjustments if Loews or anyone else makes a partial tender
or partial exchange offer for the Underlying Shares. IF AN EVENT OCCURS THAT
DOES NOT REQUIRE THE CALCULATION AGENT TO ADJUST THE AMOUNT OF THE UNDERLYING
SHARES PAYABLE AT MATURITY, THE MARKET PRICE OF THE SECURITIES MAY BE
MATERIALLY AND ADVERSELY AFFECTED.
HOLDINGS OF THE SECURITIES BY OUR AFFILIATES AND FUTURE SALES
Certain of our affiliates have agreed to purchase for investment the
portion of the Securities that has not been purchased by investors in this
offering, which initially they intend to hold for investment purposes. As a
result, upon completion of this offering, our affiliates may own a substantial
portion of the aggregate principal amount of the Securities. Circumstances may
occur in which our interests or those of our affiliates could be in conflict
with your interests.
POTENTIAL CONFLICTS OF INTEREST BETWEEN HOLDERS OF SECURITIES AND THE
CALCULATION AGENT
As calculation agent, AAI will calculate the payout to you at maturity of
the Securities. AAI and other affiliates may carry out hedging activities
related to the Securities, including trading in the Underlying Shares, as well
as in other instruments related to the Underlying Shares. AAI and some of our
other affiliates also trade the Underlying Shares on a regular basis as part of
their general broker dealer businesses. Any of these activities could influence
AAI's determinations as calculation agent and any such trading activity could
potentially affect the price of the Underlying Shares and, accordingly could
effect the payout on the Securities. AAI IS AN AFFILIATE OF ABN AMRO BANK N.V.
In addition, if certain reorganization events occur as defined under
"Description of Securities--Adjustment Events" the calculation agent may adjust
the initial price and consequently the knock-in level and stock redemption
amount to reflect the new securities issued in such reorganization event. The
calculation agent may make such adjustment based on its assessment of the
market value and volatility of those new securities, which may adversely affect
the value of the Securities. The calculation agent's adjustment to the
Securities may be influenced by, among other things, our or our affiliates'
hedging transactions with respect to the Securities and our or their ability to
hedge our obligations under the Securities following those reorganization
events. While we do not currently anticipate the occurrence of a reorganization
event, there can be no assurance that a reorganization event will not occur or
that the calculation agent's adjustments upon a reorganization event will not
adversely affect the value of the Securities.
Moreover, the issue price of the Securities includes the agents'
commissions and certain costs of hedging our obligations under the Securities.
Our affiliates through which we hedge our obligations under the Securities
expect to make a profit. Since hedging our obligations entails risk and may be
influenced by market forces beyond our affiliates' control, such hedging may
result in a profit that is more or less than initially projected.
TAX TREATMENT
You should also consider the tax consequences of investing in the
Securities. Significant aspects of the tax treatment of the Securities are
uncertain. We do not plan to request a ruling from the U.S. Internal Revenue
Service (the "IRS") or from the Dutch authorities regarding the tax treatment
of the Securities, and the IRS, the Dutch authorities or a court may not agree
with the tax treatment described in the accompanying Prospectus Supplement.
Please read carefully the sections entitled "United States Federal Taxation"
(and in particular the subsection entitled "--Mandatorily Exchangeable
Notes--Reverse Exchangeable and Knock-in Reverse Exchangeable Securities") and
PS-11
"Taxation in the Netherlands" in the accompanying Prospectus Supplement. You
should consult your tax advisor about your own situation.
PS-12
HYPOTHETICAL SENSITIVITY ANALYSIS OF TOTAL RETURN
OF THE SECURITIES AT MATURITY
The following tables set out the total return to maturity of a Security,
based on the assumptions outlined below and several variables, which include
(a) whether the closing price of the Underlying Shares has fallen below the
knock-in level on any trading day during the Knock-in Period and (b) several
hypothetical closing prices for the Underlying Shares on the determination
date. The information in the tables is based on hypothetical market values for
the Underlying Shares. We cannot predict the market price or the closing price
of the Underlying Shares on the determination date or at any time during the
life of the Securities. THE ASSUMPTIONS EXPRESSED BELOW ARE FOR ILLUSTRATIVE
PURPOSES ONLY AND THE RETURNS SET FORTH IN THE TABLE MAY OR MAY NOT BE THE
ACTUAL RATES APPLICABLE TO A PURCHASER OF THE SECURITIES.
ASSUMPTIONS
Initial Price: $42.92 (the closing price on the day we
priced the Securities)
Knock-in level: $32.19 (75% of the Initial Price)
Annual Interest on the Securities: 11.15%
Term of the Securities: 1 year
Exchange Factor: 1.0 (we have assumed that no market
disruption event occurs and the
calculation agent does not need to
adjust the exchange factor for any
adjustment events during the term of
the Securities).
PAYMENT AT MATURITY IF THE CLOSING PRICE OF THE UNDERLYING SHARES FALLS BELOW
THE KNOCK-IN LEVEL ON ANY TRADING DAY DURING THE KNOCK-IN PERIOD:
--------------------------------------------------------------------------------
ASSUMED
LOEWS VALUE OF TWELVE MONTHLY TOTAL RETURN(b)
CLOSING PRICE ON PAYMENT AT INTEREST -------------------------
DETERMINATION DATE MATURITY(a) PAYMENTS(c) $ %
--------------------------------------------------------------------------------
+$42.92 $1,000.00 $111.50 $1,111.50 11.15%
$42.92 $1,000.00 $111.50 $1,111.50 11.15%
$41.85 $ 975.06 $111.50 $1,086.56 8.66%
$39.92 $ 930.10 $111.50 $1,041.60 4.16%
$39.06 $ 910.06 $111.50 $1,021.56 2.16%
$35.15 $ 818.96 $111.50 $ 930.46 -6.95%
$30.93 $ 720.64 $111.50 $ 832.14 -16.79%
$24.74 $ 576.42 $111.50 $ 687.92 -31.21%
$17.32 $ 403.54 $111.50 $ 515.04 -48.50%
$ 8.66 $ 201.77 $111.50 $ 313.27 -68.67%
$ 4.33 $ 100.88 $111.50 $ 212.38 -78.76%
$ 0.00 $ 0.00 $111.50 $ 111.50 -88.85%
--------------------------------------------------------------------------------
PS-13
PAYMENT AT MATURITY IF THE CLOSING PRICE OF THE UNDERLYING SHARES NEVER FALLS
BELOW THE KNOCK-IN LEVEL ON ANY TRADING DAY DURING THE KNOCK-IN PERIOD:
--------------------------------------------------------------------------------
ASSUMED
LOEWS VALUE OF TWELVE MONTHLY TOTAL RETURN(b)
CLOSING PRICE ON PAYMENT AT INTEREST -------------------------
DETERMINATION DATE MATURITY(d) PAYMENTS(c) $ %
--------------------------------------------------------------------------------
+$42.92 $1,000.00 $111.50 $1,111.50 11.15%
$42.92 $1,000.00 $111.50 $1,111.50 11.15%
$38.63 $1,000.00 $111.50 $1,111.50 11.15%
$36.70 $1,000.00 $111.50 $1,111.50 11.15%
$32.19 $1,000.00 $111.50 $1,111.50 11.15%
--------------------------------------------------------------------------------
----------------
(a) Based on the assumptions set forth above, if the closing price of the
Underlying Shares falls below $32.19 on any trading day during the Knock-in
Period and, in addition, the closing price of the Underlying Shares is less
than $42.92 on the determination date, the payment at maturity will be made
in Underlying Shares. For determining the value of the payment at maturity,
we have assumed that the closing price of the Underlying Shares will be the
same on the maturity date as on the determination date.
(b) The total return presented is exclusive of any tax consequences of owning
the Securities. You should consult your tax adviser regarding whether
owning the Securities is appropriate for your tax situation. See the
sections titled "Risk Factors" in this Pricing Supplement and "United
States Federal Taxation" and "Taxation in the Netherlands" in the
accompanying Prospectus Supplement.
(c) Interest on the Securities will be computed on the basis of a 360-day year
of twelve 30-day months or, in the case of an incomplete month, the number
of actual days elapsed. Accordingly, depending on the number of days in any
monthly interest payment period, the coupon payable in such period and,
consequently, the total interest payable over the life of the Securities,
may be less than the amount reflected in this column.
(d) Based on the assumptions set forth above, if the closing price of the
Underlying Shares never falls below $32.19 on any trading day during the
Knock-in Period, the payment at maturity will be made in cash.
PS-14
INCORPORATION OF DOCUMENTS BY REFERENCE
Holding is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, Holding files reports and other information with the Securities and
Exchange Commission (the "Commission"). You may read and copy these documents
at the SEC Headquarters Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549 (tel: 202-551-8090), and at the SEC's regional offices
at Northeast Regional Office, 3 World Financial Center, Suite 400, New York, NY
10281 (tel: 212-336-1100) and Midwest Regional Office, 175 W. Jackson
Boulevard, Suite 900, Chicago, Illinois 60604. Copies of this material can also
be obtained from the Public Reference Room of the Commission at 100 F Street,
N.E., Washington, D.C. 20549 at prescribed rates. Please call the Commission at
1-800-SEC-0330 for further information about the Public Reference Room. The
Commission also maintains an Internet website that contains reports and other
information regarding Holding that are filed through the Commission's
Electronic Data Gathering, Analysis and Retrieval (EDGAR) System. This website
can be accessed at www.sec.gov. You can find information Holding has filed with
the Commission by reference to file number 1-14624.
This Pricing Supplement is part of a registration statement that we and
Holding filed with the Commission. This Pricing Supplement omits some
information contained in the registration statement in accordance with
Commission rules and regulations. You should review the information and
exhibits in the registration statement for further information on us and
Holding and the securities we and Holding are offering. Statements in this
prospectus concerning any document we and Holding filed as an exhibit to the
registration statement or that Holding otherwise filed with the Commission are
not intended to be comprehensive and are qualified by reference to these
filings. You should review the complete document to evaluate these statements.
The Commission allows us to incorporate by reference much of the
information that we and Holding file with them, which means that we can
disclose important information to you by referring you to those publicly
available documents. The information that we and Holding incorporate by
reference in this Pricing Supplement is considered to be part of this Pricing
Supplement. Because we and Holding are incorporating by reference future
filings with the Commission, this Pricing Supplement is continually updated and
those future filings may modify or supersede some of the information included
or incorporated in this Pricing Supplement. This means that you must look at
all of the Commission filings that we and Holding incorporate by reference to
determine if any of the statements in this Pricing Supplement or in any
document previously incorporated by reference have been modified or superseded.
This Pricing Supplement incorporates by reference all Annual Reports on Form
20-F filed by Holding since September 29, 2006, and any future filings that we
or Holding make with the Commission (including any Form 6-K's that we or
Holding subsequently file with the Commission) under Section 13(a), 13(c), 14
or 15(d) of the Exchange Act, that are identified in such filing as being
specifically incorporated by reference into Registration Statement Nos.
333-137691 or 333-137691-02, of which this Pricing Supplement is a part, until
we and Holding complete our offering of the Securities to be issued hereunder
or, if later, the date on which any of our affiliates cease offering and
selling these Securities.
You may request, at no cost to you, a copy of these documents (other than
exhibits not specifically incorporated by reference) by writing or telephoning
us at: ABN AMRO Bank N.V., ABN AMRO Investor Relations Department,
Hoogoorddreef 66-68, P.O. Box 283, 1101 BE Amsterdam, The Netherlands
(Telephone: (31-20) 628 3842).
PS-15
PUBLIC INFORMATION REGARDING THE UNDERLYING SHARES
According to publicly available documents, Loews is a holding company
whose majority and wholly owned subsidiaries are engaged in commercial property
and casualty insurance, production and sale of cigarettes, operation of
interstate natural gas transimission pipeline systems, operation of offshore
oil and gas drilling rigs, operation of hotels, and distribution and sale of
watches and clocks.
The Underlying Shares are registered under the Exchange Act. Companies with
securities registered under the Exchange Act are required periodically to file
certain financial and other information specified by the Commission.
Information provided to or filed with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at the
SEC Headquarters Public Reference Room at 100 F Street, N.E., Washington, D.C.
20549 (tel: 202-551-8090), and at the Commission's regional offices at
Northeast Regional Office, 3 World Financial Center, Suite 400, New York, New
York 10281 (tel: 212-336-1100) and Midwest Regional Office, 175 W. Jackson
Boulevard, Suite 900, Chicago, Illinois 60604. Copies of this material can also
be obtained from the Public Reference Room of the Commission at 100 F Street,
N.E., Washington, D.C. 20549 at prescribed rates. Please call the Commission at
1-800-SEC-0330 for further information about the Public Reference Room. In
addition, information provided to or filed with the Commission electronically
can be accessed through a website maintained by the Commission. The address of
the Commission's website is http://www.sec.gov. Information provided to or
filed with the Commission by Loews pursuant to the Exchange Act can be located
by reference to Commission file number 1-6541.
In addition, information regarding Loews may be obtained from other sources
including, but not limited to, press releases, newspaper articles and other
publicly disseminated documents. We make no representation or warranty as to
the accuracy or completeness of such reports.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE SECURITIES OFFERED HEREBY AND
DOES NOT RELATE TO THE UNDERLYING SHARES OR OTHER SECURITIES OF LOEWS WE HAVE
DERIVED ALL DISCLOSURES CONTAINED IN THIS PRICING SUPPLEMENT REGARDING LOEWS
FROM THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH.
NEITHER WE NOR HOLDING NOR THE AGENTS HAVE PARTICIPATED IN THE PREPARATION OF
SUCH DOCUMENTS OR MADE ANY DUE DILIGENCE INQUIRY WITH RESPECT TO LOEWS IN
CONNECTION WITH THE OFFERING OF THE SECURITIES. NEITHER WE NOR HOLDING NOR THE
AGENTS MAKE ANY REPRESENTATION THAT SUCH PUBLICLY AVAILABLE DOCUMENTS OR ANY
OTHER PUBLICLY AVAILABLE INFORMATION REGARDING LOEWS ARE ACCURATE OR COMPLETE.
FURTHERMORE, NEITHER WE NOR HOLDING CAN GIVE ANY ASSURANCE THAT ALL EVENTS
OCCURRING PRIOR TO THE DATE HEREOF (INCLUDING EVENTS THAT WOULD AFFECT THE
ACCURACY OR COMPLETENESS OF THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE
PRECEDING PARAGRAPH) THAT WOULD AFFECT THE TRADING PRICE OF THE UNDERLYING
SHARES (AND THEREFORE THE INITIAL PRICE AND THE KNOCK-IN LEVEL AND STOCK
REDEMPTION AMOUNT) HAVE BEEN PUBLICLY DISCLOSED. SUBSEQUENT DISCLOSURE OF ANY
SUCH EVENTS OR THE DISCLOSURE OF OR FAILURE TO DISCLOSE MATERIAL FUTURE EVENTS
CONCERNING LOEWS COULD AFFECT THE VALUE YOU WILL RECEIVE ON THE MATURITY DATE
WITH RESPECT TO THE SECURITIES AND THEREFORE THE TRADING PRICES OF THE
SECURITIES. NEITHER WE NOR HOLDING NOR ANY OF OUR AFFILIATES HAVE ANY
OBLIGATION TO DISCLOSE ANY INFORMATION ABOUT LOEWS AFTER THE DATE OF THIS
PRICING SUPPLEMENT.
NEITHER WE NOR HOLDING NOR ANY OF OUR AFFILIATES MAKES ANY REPRESENTATION
TO YOU AS TO THE PERFORMANCE OF THE UNDERLYING SHARES.
We and/or our affiliates may presently or from time to time engage in
business with Loews, including extending loans to, or making equity investments
in, or providing advisory services to Loews, including merger and acquisition
advisory services. In the course of such business, we and/or our affiliates may
acquire non-public information with respect to Loews and, in addition, one or
more of our affiliates may publish research reports with respect to Loews. The
statement in the preceding sentence is not intended to affect the rights of
holders of the Securities under the securities laws. AS A PROSPECTIVE PURCHASER
OF A SECURITY, YOU SHOULD UNDERTAKE SUCH INDEPENDENT INVESTIGATION OF LOEWS AS
IN YOUR JUDGMENT IS APPROPRIATE TO MAKE AN INFORMED DECISION WITH RESPECT TO AN
INVESTMENT IN THE UNDERLYING SHARES.
PS-16
HISTORICAL INFORMATION
The Underlying Shares are traded on the NYSE under the symbol "LTR". The
following table sets forth the published highest intra-day price for the
quarter, lowest intra-day price for the quarter and last day closing price for
the quarter of the Underlying Shares since 2003. We obtained the prices listed
below from Bloomberg Financial Markets without independent verification. You
should not take the historical prices of the Underlying Shares as an indication
of future performance. NEITHER WE NOR HOLDING CAN GIVE ANY ASSURANCE THAT THE
PRICE OF THE UNDERLYING SHARES WILL NOT DECREASE, SUCH THAT WE WILL DELIVER
UNDERLYING SHARES AT MATURITY.
PERIOD HIGH LOW LAST DAY
INTRA-DAY INTRA-DAY CLOSING
PRICE PRICE PRICE
----- ----- -----
2003
First Quarter....................... $15.97 $13.22 $13.28
Second Quarter...................... $16.34 $12.75 $15.76
Third Quarter....................... $16.39 $13.37 $13.46
Fourth Quarter...................... $16.49 $12.97 $16.48
2004
First Quarter....................... $21.07 $16.36 $19.69
Second Quarter...................... $20.45 $18.48 $19.99
Third Quarter....................... $20.05 $17.78 $19.50
Fourth Quarter...................... $23.67 $18.51 $23.43
2005
First Quarter....................... $24.87 $22.35 $24.51
Second Quarter...................... $26.76 $22.98 $25.83
Third Quarter....................... $31.32 $25.57 $30.80
Fourth Quarter ..................... $32.90 $29.17 $31.62
2006
First Quarter....................... $34.38 $30.42 $33.73
Second Quarter...................... $36.89 $32.86 $35.45
Third Quarter ...................... $39.02 $34.37 $37.90
Fourth Quarter...................... $42.18 $37.40 $41.47
2007
First Quarter ...................... $46.32 $40.21 $45.43
Second Quarter...................... $53.46 $45.47 $50.98
Third Quarter....................... $52.88 $42.45 $48.35
Fourth Quarter ..................... $51.10 $44.20 $50.34
2008
First Quarter
(up to February 13, 2008)........ $51.33 $40.76 $42.92
Neither we nor Holding make any representation as to the amount of
dividends, if any, that Loews will pay in the future. In any event, as a holder
of a Security, you will not be entitled to receive dividends, if any, that may
be payable on the Underlying Shares.
PS-17
DESCRIPTION OF SECURITIES
Capitalized terms not defined herein have the meanings given to such terms
in the accompanying Prospectus Supplement. The term "Security" refers to each
$1,000 principal amount of our 11.15% Knock-in Reverse Exchangeable Securities
due February 19, 2009 linked to common stock of the Underlying Company and
fully and unconditionally guaranteed by Holding.
Principal Amount:........... $500,000
Underlying Shares........... Common Stock, $0.01 par value per share, of Loews
Corporation
Underlying Company.......... Loews Corporation
Original Issue Date......... February 19, 2008
Pricing Date................ February 13, 2008
Issue Price................. 100%
Initial Price............... $42.92 (the Closing Price per Underlying Share
when we priced the Securities on the Pricing Date,
divided by the Exchange Factor).
Knock-in Level.............. 75% of the Initial Price, which will be determined
by the Calculation Agent. The Initial Price and
consequently the Knock-in Level may be adjusted
for certain corporate events affecting the
Underlying Company.
Maturity Date............... February 19, 2009
Specified Currency.......... U.S. Dollars
CUSIP....................... 00083GDV3
Denominations............... The Securities may be purchased in denominations
of $1,000 and integral multiples thereof.
Form of Securities.......... The Securities will be represented by a single
registered global security, deposited with the
Depository Trust Company.
Guarantee................... The payment and delivery obligations of ABN AMRO
Bank N.V. under the Securities, when and as they
shall become due and payable, whether at maturity
or upon acceleration, are fully and
unconditionally guaranteed by ABN AMRO Holding
N.V.
Interest Rate............... 11.15% per annum, payable monthly in arrears on
the 19th day of each month commencing on March 19,
2008 and ending on the Maturity Date, which shall
represent (a) an interest coupon of 2.63% and (b)
an option premium of 8.52% per annum.
Payment at Maturity......... If the Closing Price per Underlying Share has not
fallen below the 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 per Underlying Share has fallen
below the Knock-in Level on any Trading Day during
the Knock-in Period, then (i) if the Closing Price
per Underlying Share on the Determination Date is
below the Initial Price, we will deliver to you,
in exchange for each Security, a number of
Underlying Shares equal to the Stock Redemption
Amount or (ii) if the Closing Price per Underlying
Share on the Determination Date is at or above the
Initial Price, we will pay you the principal
amount of each Security in cash. We will pay cash
in lieu of delivering fractional Underlying Shares
in an amount equal to the corresponding fractional
Closing Price of the Underlying Shares, as
determined by the Calculation Agent on the
Determination Date. If due to events beyond our
reasonable control, as determined by us in our
sole discretion, Underlying Shares are not
PS-18
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 Shares on the
Determination Date. Following a Reorganization
Event, the amount payable at maturity is subject
to adjustments as described below under
"--Adjustment Events."
Stock Redemption Amount..... The Calculation Agent will determine the Stock
Redemption Amount on the Determination Date by
dividing $1,000 by the Initial Price of the
Underlying Shares. The Initial Price and
consequently the Stock Redemption Amount may be
adjusted for certain corporate events affecting
the Underlying Company. The interest payment on
the Securities at maturity will be paid in cash.
Determination Date.......... February 13, 2009; provided that if such day is
not a Trading Day, or if a Market Disruption Event
has occurred on such a Trading Day, the
Determination Date shall be the immediately
succeeding Trading Day; provided, further, that
the Determination Date shall be no later than the
second scheduled Trading Day preceding the
Maturity Date, notwithstanding the occurrence of a
Market Disruption Event on such second scheduled
Trading Day.
Closing Price............... If the Underlying Shares (or any other security
for which a closing price must be determined) are
listed on a U.S. securities exchange registered
under the Exchange Act, or are included in the OTC
Bulletin Board Service, which we refer to as the
OTC Bulletin Board (operated by the Financial
Industry Regulatory Authority), the Closing Price
for one Underlying Share (or one unit of any such
other security) on any Trading Day means (i) the
last reported sale price, regular way, in the
principal trading session on such day on the
principal securities exchange on which the
Underlying Shares (or any such other security) are
listed or admitted to trading or (ii) if not
listed or admitted to trading on any such
securities exchange or if such last reported sale
price is not obtainable (even if the Underlying
Shares, or other such security, are listed or
admitted to trading on such securities exchange),
the last reported sale price in the principal
trading session on the over-the-counter market as
reported on the Relevant Exchange or OTC Bulletin
Board on such day. If the last reported sale price
is not available pursuant to clause (i) or (ii) of
the preceding sentence, the Closing Price for any
Trading Day shall be the mean, as determined by
the Calculation Agent, of the bid prices for the
Underlying Shares (or any such other security)
obtained from as many dealers in such security
(which may include AAI or any of our other
affiliates), but not exceeding three, as will make
such bid prices available to the Calculation
Agent. The term "OTC Bulletin Board Service" shall
include any successor service thereto.
Relevant Exchange........... The primary U.S. securities organized exchange or
market of trading for the Underlying Shares. If a
Reorganization Event has occurred, the Relevant
Exchange will be the stock exchange or securities
market on which the Exchange Property (as defined
below under "--Adjustment Events") that is a
listed equity security is principally traded as
determined by the Calculation Agent.
Trading Day................. A day, as determined by the Calculation Agent, on
which trading is generally conducted on the
Relevant Exchange.
Book Entry Note or
Certificated Note......... Book Entry
Trustee..................... Wilmington Trust Company
PS-19
Securities Administrator.... Citibank, N.A.
Market Disruption Event..... Means, with respect to any securities for which a
Closing Price must be determined:
(i) either:
(x) any suspension of or limitation imposed
on trading in such securities by the
primary exchange therefore or otherwise
and whether by reason of movements in
price exceeding limits permitted by such
exchange or otherwise or by any exchange
or quotation system on which trading in
futures or options contracts relating to
such securities is executed, or
(y) any event (other than an event described
in clause (z) below) that disrupts or
impairs (as determined by the
Calculation Agent) the ability of market
participants in general (1) to effect
transactions in or obtain market values
for such securities on the primary
exchange therefore or (2) to effect
transactions in or obtain market values
for futures or options contracts
relating to such securities on any other
exchange, or
(z) the closure on any Trading Day of the
primary exchange for such securities, or
any exchange or quotation system on
which trading in future or options
relating such securities is executed,
prior to its scheduled closing time
unless such earlier closing time is
announced by such exchange at least one
hour prior to the earlier of (1) the
actual closing time for the regular
trading session on such exchange on such
Trading Day and (2) the submission
deadline for orders to be entered into
such exchange for execution on such
Trading Day; and
(ii) a determination by the Calculation Agent in
its sole discretion that the event described
in clause (i) above materially interfered
with our ability or the ability of any of our
affiliates to unwind or adjust all or a
material portion of the hedge with respect to
the Securities.
For purposes of determining whether a market
disruption event has occurred: (1) a limitation on
the hours or number of days of trading will not
constitute a market disruption event if it results
from an announced change in the regular business
hours of the relevant exchange; (2) a decision to
permanently discontinue trading in the relevant
futures or options contract will not constitute a
market disruption event; (3) limitations pursuant
to New York Stock Exchange Inc. Rule 70A (or any
applicable rule or regulation enacted or
promulgated by the New York Stock Exchange Inc.,
any other self-regulatory organization or the
Commission of similar scope as determined by the
calculation agent) on trading during significant
market fluctuations shall constitute a suspension,
absence or material limitation of trading; (4) a
suspension of trading in a futures or options
contract on such securities by the primary
securities market trading in such futures or
options, if available, by reason of (x) a price
change exceeding limits set by such securities
exchange or market, (y) an imbalance of orders
relating to such contracts or (z) a disparity in
bid and ask quotes relating to such contracts will
constitute a suspension, absence or material
limitation of trading in futures or options
contracts related to such securities; and (5) a
suspension, absence or material limitation of
trading on the primary securities market on which
futures or options contracts related to such
securities are traded will not include any time
when such securities market is itself closed for
trading under ordinary
PS-20
circumstances.
The Calculation Agent shall as soon as reasonably
practicable under the circumstances notify us, the
trustee, the Depository Trust Company and the
agents of the existence or occurrence of a Market
Disruption Event on any day that but for the
occurrence or existence of a Market Disruption
Event would have been the Determination Date.
Exchange Factor............. The Exchange Factor will be set initially at 1.0,
but will be subject to adjustment upon the
occurrence of certain corporate events affecting
the Underlying Shares. See "Adjustment Events"
below.
Adjustment Events........... The Exchange Factor or the amounts paid at
maturity will be adjusted as follows:
1. If the Underlying Shares are subject to a
stock split or reverse stock split, then once
such split has become effective, the Exchange
Factor will be proportionately adjusted.
2. If the Underlying Shares are subject (i) to a
stock dividend (i.e., the issuance of
additional Underlying Shares) that is given
ratably to all holders of Underlying Shares
or (ii) to a distribution of the Underlying
Shares as a result of the triggering of any
provision of the corporate charter of the
Underlying Company, in each case other than a
stock split described in paragraph 1, then
once the dividend has become effective and
the Underlying Shares are trading
ex-dividend, the Exchange Factor will be
proportionally adjusted.
3. There shall be no adjustments to the Exchange
Factor to reflect cash dividends or other
distributions paid with respect to the
Underlying Shares unless such cash dividends
or other distributions constitute
Extraordinary Dividends as described below
(except that distributions described in
paragraph 2 above shall not be subject to
this paragraph). A cash dividend or other
distribution with respect to the Underlying
Shares shall be deemed to be an
"Extraordinary Dividend" if such dividend or
other distribution exceeds the immediately
preceding non-Extraordinary Dividend for the
Underlying Shares by an amount equal to at
least 10% of the Closing Price of the
Underlying Shares (as adjusted for any
subsequent corporate event requiring an
adjustment hereunder, such as a stock split
or reverse stock split) on the Trading Day
preceding the ex-dividend date for the
payment of such Extraordinary Dividend (the
"ex-dividend date"). If an Extraordinary
Dividend occurs with respect to the
Underlying Shares, the Exchange Factor with
respect to the Underlying Shares will be
adjusted on the ex-dividend date with respect
to such Extraordinary Dividend so that the
new Exchange Factor will equal the product of
(i) the then-current Exchange Factor and (ii)
a fraction, the numerator of which is the
Closing Price on the Trading Day preceding
the ex-dividend date, and the denominator of
which is the amount by which the Closing
Price on the Trading Day preceding the
ex-dividend date exceeds the Extraordinary
Dividend Amount. The "Extraordinary Dividend
Amount" with respect to an Extraordinary
Dividend for the Underlying Shares shall
equal (i) in the case of cash dividends or
other distributions that constitute regular
dividends, the amount per share of such
Extraordinary Dividend minus the amount per
share of the immediately preceding
non-Extraordinary Dividend for the Underlying
Shares or (ii) in the case of cash dividends
or other distributions that do not constitute
regular dividends, the amount per share of
such Extraordinary Dividend. To the extent an
Extraordinary
PS-21
Dividend is not paid in cash, the value of
the non-cash component will be determined by
the calculation agent, whose determination
shall be conclusive. A distribution on the
Underlying Shares described in clause (A),
clause (D) or clause (E) in the definitions
of "Reorganization Event" of paragraph 5
below that also constitutes an Extraordinary
Dividend shall not cause an adjustment to the
Exchange Factor pursuant to this paragraph 3.
4. If the Underlying Company issues rights or
warrants to all holders of the Underlying
Shares to subscribe for or purchase
Underlying Shares at an exercise price per
share less than the closing price of the
Underlying Shares on both (i) the date the
exercise price of such rights or warrants is
determined and (ii) the expiration date of
such rights or warrants, and if the
expiration date of such rights or warrants
precedes the maturity of this Note, then the
Exchange Factor shall be adjusted to equal
the product of the prior Exchange Factor and
a fraction, the numerator of which shall be
the number of Underlying Shares outstanding
immediately prior to the issuance of such
rights or warrants plus the number of
additional Underlying Shares offered for
subscription or purchase pursuant to such
rights or warrants and the denominator of
which shall be the number of Underlying
Shares outstanding immediately prior to the
issuance of such rights or warrants plus the
number of additional Underlying Shares which
the aggregate offering price of the total
number of shares of the Underlying Shares so
offered for subscription or purchase pursuant
to such rights or warrants would purchase at
the closing price on the expiration date of
such rights or warrants, which shall be
determined by multiplying such total number
of shares offered by the exercise price of
such rights or warrants and dividing the
product so obtained by such Closing Price.
5. If a Reorganization Event (as defined below)
occurs, the payment at maturity will depend
on (i) whether the Closing Price of the
Underlying Shares fell below the Knock-in
Level on any Trading Day from but not
including the Pricing Date to and including
one Trading Day prior to the date of the
Reorganization Event (for purposes of this
paragraph 5, we refer to such period as the
"Relevant Period"), and (ii) the kind and
amount of Exchange Property (as defined
below) received by holders of Underlying
Shares in the Reorganization Event.
In the case where the Closing Price of the
Underlying Shares has fallen below the
Knock-in Level on any Trading Day during the
Relevant Period, each holder of a Security
will receive at maturity, in respect of each
$1,000 principal amount of each Security, the
lesser of: (i) $1,000 in cash or (ii)
Exchange Property in an amount with a value
equal to the product of the Stock Redemption
Amount times the Transaction Value (as
defined below).
In the case where the Closing Price of the
Underlying Shares has not fallen below the
Knock-in Level on any Trading Day during the
Relevant Period, then the payment at maturity
will depend upon the type of Exchange
Property received by holders of Underlying
Shares in accordance with the following:
(i) If the Exchange Property consists
solely of equity securities listed
on a securities exchange that, in
the opinion of the Calculation
Agent, maintains sufficient
liquidity for trading
PS-22
in such Exchange Property, then the
payment at maturity for each $1,000
principal amount of Securities will
depend on whether the Closing Price
of such Exchange Property has
fallen below the Knock-in Level on
any Trading Day commencing on the
date of such Reorganization Event
to and including the Determination
Date:
(a) If the Closing Price of such
Exchange Property has not
fallen below the Knock-in
Level on any Trading Day
commencing on the date of such
Reorganization Event to and
including the Determination
Date, then each holder of a
Security will receive the
principal amount of $1,000 in
cash; or
(b) If the Closing Price of such
Exchange Property has fallen
below the Knock-in Level on
any Trading Day commencing on
the date of such
Reorganization Event to and
including the Determination
Date, then (x) if the Closing
Price of such Exchange
Property on the Determination
Date is below the Initial
Price, we will deliver to you,
in exchange for each Security,
Exchange Property with a value
equal to the product of the
Stock Redemption Amount times
the Transaction Value and (y)
if the Closing Price of such
Exchange Property on the
Determination Date is at or
above the Initial Price, we
will pay you $1,000 in cash.
The Calculation Agent will adjust
the Initial Price and consequently
the Knock-in Level to reflect the
new securities delivered in such
Reorganization Event and the market
value and volatility levels of such
securities and any Exchange Factor
adjustments to the Initial Price as
of the effective date of the
Reorganization Event. Following any
such adjustment, the Initial Price
will be such adjusted Initial
Price, divided by the Exchange
Factor (which shall have been reset
to 1.0 immediately following the
Reorganization Event). The Bank
will provide notice to the Trustee
and the Securities Administrator of
the adjusted Knock-in Level and
Initial Price as soon as
practicable after the date of such
Reorganization Event.
(ii) If the Exchange Property consists
solely of property other than such
listed equity securities, each
holder of a Security will receive,
on the Maturity Date, in exchange
for each $1,000 principal amount of
Securities, the lesser of: (i)
$1,000 in cash or (ii) Exchange
Property in an amount with a value
equal to the product of the Stock
Redemption Amount times the
Transaction Value as of the
Determination Date. We may, in lieu
of delivering such Exchange
Property, pay you the cash value of
such Exchange Property as of the
Determination Date, as determined
by the Calculation Agent. We will
notify the Trustee and the
Securities Administrator of the
amount and type of Exchange
Property to be delivered or cash to
be paid.
(iii) If the Exchange Property consists
of any combination of such listed
equity securities and other
property, then we will (a) deliver,
on the Maturity Date, the portion
of Exchange
PS-23
Property consisting of such other
property with a value equal to the
product of the Stock Redemption
Amount (prior to any adjustment
under this clause) times the
Transaction Value of such portion
of Exchange Property on the
Determination Date or, at our
election, pay the cash value
thereof, as determined by the
Calculation Agent, (b)
proportionally adjust the Stock
Redemption Amount to reflect the
portion of the Exchange Property
constituting such listed equity
securities, (c) adjust the Initial
Price and consequently the Knock-in
Level to reflect such listed equity
securities, the market value and
volatility levels of such listed
equity securities and any Exchange
Factor adjustments to the Initial
Price as of the effective date of
the Reorganization Event and (d)
reduce the principal amount of each
$1,000 of Securities to an amount
equal to such adjusted Stock
Redemption Amount multiplied by
such adjusted Initial Price.
Following such adjustments, the
amount paid at maturity for each
Security will be determined as set
forth under clause (i) above,
except references to each $1,000
principal amount of Security and
$1,000 in cash and the reference to
$1,000 in the definition of Stock
Redemption Amount shall be
references to the adjusted
principal amount of Securities as
described in clause (d) of the
preceding sentence. In addition,
following any such adjustment, the
Initial Price will be such adjusted
Initial Price, divided by the
Exchange Factor (which shall have
been reset to 1.0 immediately
following the Reorganization
Event). The Bank will provide
notice to the Trustee and the
Securities Administrator of any
adjustments to the Securities as a
result of this clause (iii) as soon
as practicable after the date of
such Reorganization Event.
"Reorganization Event" means (A) there has
occurred any reclassification or change with
respect to the Underlying Shares, including,
without limitation, as a result of the
issuance of any tracking stock by the
Underlying Company; (B) the Underlying
Company or any surviving entity or subsequent
surviving entity of the Underlying Company
(an "Underlying Company Successor") has been
subject to a merger, combination or
consolidation and is not the surviving
entity; (C) any statutory exchange of
securities of the Underlying Company or any
Underlying Company Successor with another
corporation occurs (other than pursuant to
clause (B) above); (D) the Underlying Company
is liquidated; (E) the Underlying Company
issues to all of its shareholders equity
securities of an issuer other than the
Underlying Company (other than in a
transaction described in clauses (B), (C) or
(D) above) (a "Spin-off Event"); or (F) a
tender or exchange offer or going-private
transaction is consummated for all the
outstanding Underlying Shares.
"Exchange Property" means securities, cash or
any other assets distributed to holders of
the Underlying Shares in any Reorganization
Event, including, (A) in the case of the
issuance of tracking stock or in the case of
a Spin-off Event, the Underlying Shares with
respect to which the tracking stock or
spun-off security was issued and (B) in the
case of any other Reorganization Event where
the Underlying Shares continue to be held by
the holders receiving such distribution, the
Underlying Shares.
PS-24
"Transaction Value", at any date, means (A)
for any cash received as Exchange Property in
any such Reorganization Event, the amount of
cash received per Underlying Share; (B) for
any property other than cash or securities
received in any such Reorganization Event,
the market value, as determined by the
Calculation Agent, as of the date of receipt,
of such Exchange Property received per
Underlying Share; and (C) for any security
received in any such Reorganization Event
(including in the case of the issuance of
tracking stock, the reclassified Underlying
Shares and, in the case of a Spin-off Event,
the Underlying Shares with respect to which
the spun-off security was issued), an amount
equal to the Closing Price, as of the
determination date, per share of such
security multiplied by the quantity of such
security received for each Underlying Share.
For purposes of clause (iii) above, if
Exchange Property consists of more than one
type of property that is not listed equity
securities described in clause (iii) above,
holders of Securities will receive at
maturity a pro rata share of each such type
of Exchange Property in proportion to the
quantity of such Exchange Property received
in respect of each Underlying Share. If
Exchange Property includes a cash component,
holders will not receive any interest accrued
on such cash component. In the event Exchange
Property consists of securities, those
securities will, in turn, be subject to the
antidilution adjustments set forth in
paragraphs 1 through 5.
For purposes of this paragraph 5:
(i) in the case of a consummated tender
or exchange offer or going-private
transaction involving Exchange
Property of a particular type,
Exchange Property shall be deemed
to include the amount of cash or
other property paid by the offeror
in the tender or exchange offer
with respect to such Exchange
Property (in an amount determined
on the basis of the rate of
exchange in such tender or exchange
offer or going-private
transaction); and
(ii) in the event of a tender or
exchange offer or a going-private
transaction with respect to
Exchange Property in which an
offeree may elect to receive cash
or other property, Exchange
Property shall be deemed to include
the kind and amount of cash and
other property received by offerees
who elect to receive cash.
With respect to paragraphs 1 to 5 above, no
adjustments to the Exchange Factor shall be
required unless such adjustment would require a
change of at least 0.1% in the Exchange Factor
then in effect. The Exchange Factor resulting from
any of the adjustments specified above shall be
rounded to the nearest one hundred-thousandth with
five one-millionths being rounded upward.
No adjustments to the Exchange Factor or method of
calculating the Exchange Factor shall be required
other than those specified above. However, the
Bank may, at its sole discretion, cause the
Calculation Agent to make additional changes to
the Exchange Factor upon the occurrence of
corporate or other similar events that affect or
could potentially affect market prices of, or
shareholders' rights in, the Underlying Shares (or
other Exchange Property) but only to reflect such
changes, and not with the aim of changing relative
investment risk. The adjustments specified above
do not cover all events that could affect the
Market Price or the
PS-25
Closing Price of the Underlying Shares, including,
without limitation, a partial tender or partial
exchange offer for the Underlying Shares.
The Calculation Agent shall be solely responsible
for the determination and calculation of any
adjustments to the Exchange Factor or method of
calculating the Exchange Factor and of any related
determinations and calculations with respect to
any distributions of stock, other securities or
other property or assets (including cash) in
connection with any Reorganization Event described
in paragraph 5 above, and its determinations and
calculations with respect thereto shall be
conclusive.
The Calculation Agent will provide information as
to any adjustments to the Exchange Factor or
method of calculating the Exchange Factor upon
written request by any holder of the Securities.
Alternate Exchange
Calculation in case
of an Event of Default.... In case an Event of Default with respect to the
Securities shall have occurred and be continuing,
the amount declared due and payable upon any
acceleration of any Security shall be determined
by AAI, as Calculation Agent, and shall be equal
to the principal amount of the Security plus any
accrued interest to, but not including, the date
of acceleration.
Calculation Agent........... AAI. All determinations made by the Calculation
Agent will be at the sole discretion of the
Calculation Agent and will, in the absence of
manifest error, be conclusive for all purposes and
binding on you and on us.
Additional Amounts.......... Subject to certain exceptions and limitations
described in "Description of Debt Securities --
Payment of Additional Amounts" in the accompanying
Prospectus, we will pay such additional amounts to
holders of the Securities as may be necessary in
order that the net payment of the principal of the
Securities and any other amounts payable on the
Securities, after withholding for or on account of
any present or future tax, assessment or
governmental charge imposed upon or as a result of
such payment by The Netherlands (or any political
subdivision or taxing authority thereof or
therein) or the jurisdiction of residence or
incorporation of any successor corporation (other
than the United States), will not be less than the
amount provided for in the Securities to be then
due and payable.
Book Entry.................. The indenture for the Securities permits us at
anytime and in our sole discretion to decide not
to have any of the Securities represented by one
or more registered global securities. DTC has
advised us that, under its current practices, it
would notify its participants of our request, but
will only withdraw beneficial interests from the
global security at the request of each DTC
participant.
Record Date................. The "record date" for any interest payment date is
the calendar day prior to that interest payment
date, whether or not that date is a business day.
PS-26
USE OF PROCEEDS
The net proceeds we receive from the sale of the Securities will be used
for general corporate purposes and, in part, by us or one or more of our
affiliates in connection with hedging our obligations under the Securities. The
issue price of the Securities includes the selling agents' commissions (as
shown on the cover page of the accompanying Prospectus Supplement) paid with
respect to the Securities and the cost of hedging our obligations under the
Securities. The cost of hedging includes the projected profit that our
affiliates expect to realize in consideration for assuming the risks inherent
in managing the hedging transactions. Since hedging our obligations entails
risk and may be influenced by market forces beyond our or our affiliates'
control, such hedging may result in a profit that is more or less than
initially projected, or could result in a loss. See also "Risk Factors--The
Inclusion of Commissions and Cost of Hedging in the Issue Price is Likely to
Adversely Affect Secondary Market Prices" and "Potential Conflicts of Interest;
No Security Interest in the Underlying Shares Held by Us" and "Plan of
Distribution" in this Pricing Supplement and "Use of Proceeds" in the
accompanying Prospectus.
TAXATION
Please review carefully the sections entitled "United States Federal
Taxation" (and in particular the subsection entitled "--Mandatorily
Exchangeable Notes--Reverse Exchangeable and Knock-in Reverse Exchangeable
Securities") and "Taxation in the Netherlands" in the accompanying Prospectus
Supplement. Prospective purchasers of the Securities should consult their own
tax advisers as to the tax consequences of acquiring, holding and disposing of
the Securities under the tax law of any state, local and foreign jurisdiction.
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.
PS-27
PLAN OF DISTRIBUTION
We have appointed ABN AMRO Incorporated ("AAI") as agent for this offering.
AAI has agreed to use reasonable efforts to solicit offers to purchase the
Securities. We will pay AAI, in connection with sales of the Securities
resulting from a solicitation such agent made or an offer to purchase such
agent received, a commission of 2.50% of the initial offering price of the
Securities. AAI has informed us that, as part of its distribution of the
Securities, it intends to reoffer the Securities to other dealers who will sell
the Securities. Each such dealer engaged by AAI, or further engaged by a dealer
to whom AAI reoffers the Securities, will purchase the Securities at an agreed
discount to the initial offering price of the Securities. AAI has informed us
that such discounts may vary from dealer to dealer and that not all dealers
will purchase or repurchase the Securities at the same discount. You can find a
general description of the commission rates payable to the agents under "Plan
of Distribution" in the accompanying Prospectus Supplement.
AAI is a wholly owned subsidiary of the Bank. AAI will conduct this
offering in compliance with the requirements of Rule 2720 of the National
Association of Securities Dealers, Inc., which is commonly referred to as the
NASD, regarding an NASD member firm's distributing the securities of an
affiliate. When the distribution of the Securities is complete, AAI may offer
and sell those Securities in the course of its business as a broker-dealer. AAI
may act as principal or agent in those transactions and will make any sales at
prevailing secondary market prices at the time of sale. AAI may use this
Pricing Supplement and the accompanying Prospectus and Prospectus Supplement in
connection with any of those transactions. AAI is not obligated to make a
market in the Securities and may discontinue any purchase and sale activities
with respect to the Securities at any time without notice.
To the extent that the total aggregate principal amount of the Securities
being offered by this Pricing Supplement is not purchased by investors in the
offering, one or more of our affiliates has agreed to purchase the unsold
portion, and to hold such Securities for investment purposes. See "Holding of
the Securities by our Affiliates and Future Sales" under the heading "Risk
Factors."
PS-28
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PRICING SUPPLEMENT, THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT OR ADDITIONAL
INFORMATION. WE ARE OFFERING TO SELL THESE SECURITIES AND SEEKING OFFERS TO BUY
THESE SECURITIES ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED.
NEITHER THE DELIVERY OF THIS PRICING SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT AND PROSPECTUS, NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF ABN AMRO BANK N.V. OR ABN AMRO HOLDING N.V. SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PRICING SUPPLEMENT
PAGE
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Summary of Pricing Supplement............... PS-3
Risk Factors................................ PS-8
Hypothetical Sensitivity Analysis
of Total Return of the Securities
at Maturity............................... PS-13
Incorporation of Documents by Reference..... PS-15
Public Information Regarding the
Underlying Shares......................... PS-16
Description of Securities................... PS-18
Use of Proceeds............................. PS-27
Taxation.................................... PS-27
Plan of Distribution........................ PS-28
PROSPECTUS SUPPLEMENT
PAGE
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About This Prospectus Supplement............ S-1
Risk Factors................................ S-2
Description of Notes........................ S-4
Taxation in the Netherlands................. S-24
United States Federal Taxation.............. S-25
Plan of Distribution........................ S-34
Legal Matters............................... S-36
PROSPECTUS
PAGE
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About This Prospectus........................ 1
Where You Can Find Additional Information... 2
Cautionary Statement on Forward-Looking
Statements................................ 3
Consolidated Ratios of Earnings to
Fixed Charges............................. 4
ABN AMRO Bank N.V... ....................... 5
ABN AMRO Holding N.V. ...................... 6
Use of Proceeds............................. 7
Description of Debt Securities.............. 8
Forms of Securities......................... 19
The Depositary.............................. 20
Plan of Distribution........................ 22
Legal Matters............................... 25
Experts..................................... 26
Benefit Plan Investor Considerations........ 27
Enforcement of Civil Liabilities............ 28
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ABN AMRO BANK N.V.
$500,000
FULLY AND UNCONDITIONALLY GUARANTEED BY
ABN AMRO HOLDING N.V.
11.15% KNOCK-IN REVERSE EXCHANGEABLE SECURITIES
DUE FEBRUARY 19, 2009
LINKED TO COMMON STOCK OF
LOEWS CORPORATION
PRICING SUPPLEMENT
(TO PROSPECTUS DATED
SEPTEMBER 29, 2006 AND
PROSPECTUS SUPPLEMENT
DATED SEPTEMBER 29, 2006)
ABN AMRO INCORPORATED
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