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Contingent Income Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common Stock of Ford Motor Company
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Listing:
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The securities will
not be listed on any securities exchange.
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Selected
Dealer:
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Morgan Stanley Smith
Barney LLC (
Morgan Stanley Wealth
Management (MSWM
))
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Commissions
and Issue Price:
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Price to Public
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Agents Commissions
(1)
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Proceeds to Issuer
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Per
security
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$10.00
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$0.225
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$9.775
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Total
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$7,999,990
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$179,999.78
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$7,819,990.22
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Expected. In the event that we make any
change to the pricing date and the issue date, the determination dates and the
maturity date will be changed so that the stated term of the securities remains
the same.
* The
physical delivery amount, the initial share price of the underlying stock and
other amounts may change due to stock splits or other corporate actions. See Reference
AssetsEquity SecuritiesShare Adjustments Relating to Securities with an
Equity Security as the Reference Asset in the accompanying prospectus
supplement.
(1) MSSB and its financial
advisors will collectively receive from the Agent, Barclays Capital Inc., a
fixed sales commission of $0.225
for each security they sell. See Supplemental Plan
of Distribution.
Investing in the Securities involves risks not associated
with an investment in conventional debt securities. See Risk Factors
beginning on page 10. You should read this document together with the related
prospectus and prospectus supplement, each of which can be accessed via the
hyperlinks below before you make an investment decision.
Any payment on the Notes, including any repayment of
principal, is subject to the creditworthiness of the Issuer and is not
guaranteed by any third party. For a description of risks with respect to the
ability of Barclays Bank PLC to satisfy its obligations as they come due, see Risk
Factors - The Securities are Subject to the Credit Risk of the Issuer, Barclays
Bank PLC in this pricing supplement.
Prospectus dated August 31,
2010
Prospectus Supplement dated May 27, 2011
See Additional Terms of the Securities on page 3 of this
pricing supplement. The securities will have the terms specified in the
prospectus dated August 31, 2010, the prospectus supplement dated May 27, 2011
and this pricing supplement. See Risk Factors on page 8 of this pricing
supplement and Risk Factors beginning on page S-6 of the prospectus
supplement for risks related to investing in the securities.
We may use this pricing supplement in the initial sale of the
securities. In addition, Barclays Capital Inc. or another of our affiliates may
use this pricing supplement in market resale transactions in any of the
securities after their initial sale. Unless we or our agent informs you
otherwise in the confirmation of sale, this pricing supplement is being used in
a market resale transaction.
Neither the Securities and Exchange Commission nor
any state securities commission has approved or disapproved of the securities
or determined that this pricing supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
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Morgan
Stanley Smith Barney LLC
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Barclays Capital Inc
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Page 2
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Contingent Income Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common Stock of Ford Motor Company
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Additional
Terms of the Securities
You
should read this pricing supplement together with the prospectus dated August
31, 2010, as supplemented by the prospectus supplement dated May 27, 2011
relating to our Global Medium-Term Notes, Series A, of which the securities are
a part. This pricing supplement, together with the documents listed below,
contain the terms of the securities and supersede all prior or contemporaneous
oral statements as well as any other written materials including preliminary or
indicative pricing terms, correspondence, trade ideas, structures for
implementation, sample structures, brochures or other educational materials of
ours. You should carefully consider, among other things, the matters set forth
in Risk Factors in the prospectus supplement as the securities involve risks
not associated with conventional debt securities. We urge you to consult your
investment, legal, tax, accounting and other advisors before you invest in the
securities.
You
may access these documents on the SEC website at www.sec.gov as follows (or if
such address has changed, by reviewing our filings for the relevant date on the
SEC website):
Our
SEC file number is 1-10257 and our Central Index Key, or CIK, on the SEC
website is 0000312070. As used in this pricing supplement, the Company, we,
us, or our refers to Barclays Bank PLC.
The securities constitute Barclays Bank PLCs direct,
unconditional, unsecured and unsubordinated obligations and are not deposit
liabilities and are not insured by the U.S. Federal Deposit Insurance
Corporation or any other governmental agency of the United States, the United
Kingdom or any other jurisdiction. In addition, the securities will not be
guaranteed by the Federal Deposit Insurance Corporation under the FDICs
temporary liquidity guarantee program.
In
connection with this offering, Morgan Stanley Smith Barney LLC is acting in its
capacity as a selected dealer.
Page 3
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Contingent Income Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common Stock of Ford Motor Company
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How
the Securities Work
The
following diagrams illustrate the potential outcomes for the securities
depending on (1) the determination closing price and (2) the final share price.
Diagram #1: First Eleven Determination Dates
Diagram #2: Payment at Maturity if No Automatic Early
Redemption Occurs
For more information about the payout upon an early
redemption or at maturity in different hypothetical scenarios, see Hypothetical
Examples beginning on page 7.
Page 4
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Contingent Income
Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common
Stock of Ford Motor Company
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Hypothetical
Examples
The below
examples are based on the following terms:
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Initial Share Price:
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$15.08
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Downside Threshold Level:
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$11.31, which is 75% of the
initial share price
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Exchange Ratio:
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0.66313, which is the stated
principal amount per security divided by the initial share price
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Contingent Quarterly Payment:
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$0.2375 (2.375% of the stated
principal amount).
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Stated Principal Amount:
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$10 per security
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In Examples
1 and 2, the closing price of the underlying stock fluctuates over the term of
the securities and the determination closing price of the underlying stock is
greater than or equal to the hypothetical initial share price of $15.08 on one
of the first eleven determination dates. Because the determination closing
price is greater than or equal to the initial share price on one of the first
eleven determination dates, the securities are automatically redeemed following
the relevant determination date. In Examples 3 and 4, the determination closing
price on the first eleven determination dates is less than the initial share
price, and, consequently, the securities are not automatically redeemed prior
to, and remain outstanding until, maturity. The examples below assume that the
securities will be held until maturity and do not take into account the tax
consequences of an investment in the securities.
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Example
1
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Example
2
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Determination
Dates
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Hypothetical
Determination
Closing Price
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Contingent
Quarterly
Payment (per
$10.00 security)
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Early
Redemption
Payment (per
$10.00
security)*
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Hypothetical
Determination
Closing Price
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Contingent
Quarterly
Payment(per
$10.00 security)
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Early
Redemption
Payment(per
$10.00
security)
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#1
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$8.03
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$0.00
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N/A
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$11.84
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$0.2375
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N/A
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#2
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$15.08
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*
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$10.2375
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$7.02
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$0.00
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N/A
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#3
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N/A
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N/A
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N/A
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$5.76
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$0.00
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N/A
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#4
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N/A
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N/A
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N/A
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$7.49
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$0.00
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N/A
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#5
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N/A
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N/A
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N/A
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$12.71
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$0.2375
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N/A
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#6
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N/A
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N/A
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N/A
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$11.37
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$0.2375
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N/A
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#7
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N/A
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N/A
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N/A
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$6.14
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$0.00
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N/A
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#8
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N/A
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N/A
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N/A
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$12.49
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$0.2375
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N/A
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#9
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N/A
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N/A
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N/A
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$13.56
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$0.2375
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N/A
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#10
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N/A
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N/A
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N/A
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$18.85
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*
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$10.2375
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#11
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N/A
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N/A
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N/A
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N/A
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N/A
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N/A
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Final
Determination
Date
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N/A
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N/A
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N/A
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N/A
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N/A
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N/A
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Payment
at
Maturity
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N/A
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N/A
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* The Early
Redemption Payment includes the unpaid contingent quarterly payment with
respect to the determination date on which the determination closing price is
greater than or equal to the initial share price and the securities are
redeemed as a result.
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■
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In
Example 1
, the securities are automatically redeemed
following the second determination date as the determination closing price on
the second determination date is equal to the initial share price. You
receive the early redemption payment, calculated as follows:
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stated
principal amount + contingent quarterly payment = $10 + $0.2375 = $10.2375
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Page 5
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Contingent Income
Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common
Stock of Ford Motor Company
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In this example, the early redemption feature limits the term of your
investment to approximately 6 months and you may not be able to reinvest at
comparable terms or returns. If the securities are redeemed early, you will
stop receiving contingent payments.
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■
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In
Example 2
, the securities are automatically redeemed
following the tenth determination date as the determination closing price on
the tenth determination date is greater than the initial share price. As the
determination closing prices on the first, fifth, sixth, eighth and ninth
determination dates are greater than the downside threshold level, you
receive the contingent payment of $0.2375 with respect to such determination
dates. Following the tenth determination date, you receive an early redemption
payment of $10.2375, which includes the contingent quarterly payment with
respect to the tenth determination date.
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In this example, the early redemption feature limits the term of your
investment to approximately 30 months and you may not be able to reinvest at
comparable terms or returns. If the securities are redeemed early, you will
stop receiving contingent payments. Further, although the underlying stock has
appreciated by 25% from its initial share price on the tenth determination
date, you only receive $10.2375 per security and do not benefit from such
appreciation.
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Example 3
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Example
4
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Determination
Dates
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Hypothetical
Determination
Closing Price
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Contingent
Quarterly
Payment(per
$10.00 security)
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Early
Redemption
Payment(per
$10.00 security)
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Hypothetical
Determination
Closing Price
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Contingent
Quarterly
Payment(per
$10.00 security)
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Early
Redemption
Payment(per
$10.00
security)
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#1
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$8.028
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$0
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N/A
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$8.028
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$0
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N/A
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#2
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$6.690
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$0
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N/A
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$6.690
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$0
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N/A
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#3
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$5.352
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$0
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N/A
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$5.352
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$0
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N/A
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#4
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$9.366
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$0
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N/A
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$9.366
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$0
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N/A
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#5
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$7.359
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$0
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N/A
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$7.359
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$0
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N/A
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#6
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$4.014
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$0
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N/A
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$4.014
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$0
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N/A
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#7
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$8.697
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$0
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N/A
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$8.697
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$0
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N/A
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#8
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$2.676
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$0
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N/A
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$2.676
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$0
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N/A
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#9
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$3.345
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$0
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N/A
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$3.345
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$0
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N/A
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#10
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$6.021
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$0
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N/A
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$6.021
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$0
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N/A
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#11
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$4.683
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$0
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N/A
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$4.683
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$0
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N/A
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Final
Determination
Date
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$7.540
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$0
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N/A
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$13.572
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$0.2375*
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N/A
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Payment at
Maturity
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$5.00
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$10.2375
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* The final
contingent quarterly payment, if any, will be paid at maturity.
Examples 3
and 4 illustrate the payment at maturity per security based on the final share price.
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■
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In
Example 3
, the closing price of the
underlying stock remains below the downside threshold level throughout the
term of the securities. As a result, you do not receive any contingent
payments during the term of the securities and, at maturity, you are fully
exposed to the decline in the closing price of the underlying stock. As the
final share price is less than the downside threshold level, investors will
receive a number of shares of the underlying stock multiplied by the exchange
ratio or the cash value thereof, calculated as follows:
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the cash value of 0.66313 shares of the underlying stock =
the exchange ratio
times
the
final share price = 0.66313 x $7.540 = $5.00
Page 6
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Contingent Income
Auto-Callable Securities due May 20, 2016
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Based on the Performance of the Common
Stock of Ford Motor Company
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In this example, the value of shares you receive at maturity is
significantly less than the stated principal amount.
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■
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In
Example 4
, the closing price of the underlying stock
decreases to a final share price of $13.572. Although the final share price
is less than the initial share price, because the final share price is still
not less than the downside threshold level, you receive the stated principal
amount plus a contingent quarterly payment with respect to the final
determination date. Your payment at maturity is calculated as follows:
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$10 + $0.2375 = $10.2375
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In this example, although the final share price represents
approximately a 10% decline from the initial share price, you receive the
stated principal amount per security plus the contingent quarterly payment,
equal to a total payment of $10.2375 per security at maturity.
Page 7
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|
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Contingent Income
Auto-Callable Securities due May 20, 2016
|
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Based on the Performance of the Common
Stock of Ford Motor Company
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