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Preliminary Pricing Supplement
(To the Prospectus dated August 31, 2010,
the Prospectus Supplement dated May 27, 2011
and Index Supplement dated May 31, 2011)
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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-169119
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The information in this preliminary pricing supplement is not complete and may be changed. This
preliminary pricing supplement and the accompanying prospectus, prospectus supplement and index supplement do not constitute an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
Subject to Completion
Preliminary Pricing Supplement dated March 14, 2012
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$[
]
Buffered Super Track
SM
Notes due March 26, 2013
Linked to the Performance of the S&P 500
®
Index
Global Medium-Term Notes, Series A, No. E-7202
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Terms used in this preliminary pricing supplement, but not defined herein, shall have the meanings ascribed to them in
the prospectus supplement.
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Issuer:
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Barclays Bank PLC
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Initial Valuation Date:
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March 14, 2012
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Issue Date:
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March 19, 2012
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Final Valuation Date:
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March 21, 2013*
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Maturity Date:
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March 26, 2013**
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Denominations:
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Minimum denomination of $1,000, and integral multiples of $1,000 in excess thereof
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Reference Asset:
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S&P 500
®
Index (the
Index) (Bloomberg ticker symbol SPX <Index>)
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Maximum Return:
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18.20%
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Downside Leverage Factor:
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1.11111
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Buffer Percentage:
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10.00%
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Payment at Maturity:
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If the Index Return is greater than 0%, you will receive (subject to our credit risk) a cash payment per $1,000 principal amount Note
equal to (a) $1,000 plus (b) $1,000 times the Index Return, subject to the Maximum Return on the Notes. If the Index Return is 18.20% or more, you will receive the Maximum Return on the Notes of 18.20%, which entitles you to the maximum total
payment of $1,182.00 for every $1,000 principal amount Note that you hold. Accordingly, if the Index Return is positive, your payment per $1,000 principal amount Note will be calculated as follows, subject to the Maximum Return:
$1,000 + [$1,000 × Index Return]
If the Index Return is less than or equal to 0.00% and equal to or
greater than -10.00%, you will receive (subject to our credit risk) a cash payment of $1,000 per $1,000 principal amount Note that you hold; and
If the Index Return is less than -10.00%, you will receive (subject to our credit risk) a cash payment per $1,000 principal amount Note equal to (a)
$1,000 plus (b) (i) $1,000
times
(ii) the Index Return
plus
the Buffer Percentage
times
(iii) the Downside Leverage Factor, calculated per $1,000 principal amount Note as follows:
$1,000 + [$1,000 × (Index Return + 10.00%) ×
1.11111]
If the Index declines by more
than 10% from its Initial Level to the Final Level, you will lose 1.11111% of the principal amount of your Notes for every 1% that the Index Return falls below -10%. You will lose some or all of your principal at maturity if the Final Level declines
from the Initial Level by more than 10%. Any payment on the Notes, including any principal protection feature, 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 Credit of Issuer in this preliminary pricing supplement.
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Index Return:
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The performance of the Index from the Initial Level to the Final Level, calculated as follows:
Final Level Initial Level
Initial Level
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Initial Level:
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[
]
,
the Index Closing Level on the Initial Valuation Date.
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Final Level:
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The Index Closing Level on the Final Valuation Date.
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Index Closing Level:
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With respect to a valuation date, the closing level of the Index published at the regular weekday close of trading on that valuation date as displayed on Bloomberg Professional
®
service page SPX<Index> or any successor page on Bloomberg Professional
®
service or any successor service, as applicable. In certain circumstances, the closing level of the Index will be
based on the alternate calculation of the Index as described in Reference AssetsAdjustments Relating to Securities with the Reference Asset Comprised of an Index or Indices of the accompanying Prospectus
Supplement.
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Calculation Agent:
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Barclays Bank PLC
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CUSIP/ISIN:
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06738KX71 and US06738KX711
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*
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Subject to postponement in the event of a market disruption event and as described under Reference AssetsIndicesMarket Disruption Events for
Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities in the prospectus supplement
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**
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Subject to postponement in the event of a market disruption event and as described under Terms of the NotesMaturity Date and Reference
AssetsIndicesMarket Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities in the prospectus supplement.
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Investing in the Notes involves a number of risks. See Risk Factors beginning on page S-6 of the prospectus supplement and
Selected
Risk Considerations
beginning on page PPS-4 of this preliminary pricing supplement.
The Notes will not be listed on any
U.S. securities exchange or quotation system. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this preliminary pricing supplement is truthful or
complete. Any representation to the contrary is a criminal offense.
The Notes constitute our direct, unconditional, unsecured and
unsubordinated obligations and are not deposit liabilities of Barclays Bank PLC 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.
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Price to Public
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Agents Commission
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Proceeds to Barclays Bank PLC
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Per Note
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100%
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[TBD]%
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[TBD]%
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Total
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$[TBD]
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$[TBD]
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$[TBD]
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Barclays Capital Inc. will receive commissions from the Issuer equal to [TBD]% of the principal amount of the Notes, or $[TBD] per $1,000 principal
amount, and may retain all or a portion of these commissions or use all or a portion of these commissions to pay selling concessions or fees to other dealers. Accordingly, the percentage and total proceeds to Issuer listed herein is the minimum
amount of proceeds that Issuer receives.
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You may revoke your offer to purchase the Notes at any time prior to the pricing as described on the
cover of this preliminary pricing supplement. We reserve the right to change the terms of, or reject any offer to purchase the Notes prior to their issuance. In the event of any changes to the terms of the Notes, we will notify you and you will be
asked to accept such changes in connection with your purchase. You may also choose to reject such changes in which case we may reject your offer to purchase.
ADDITIONAL TERMS SPECIFIC TO THE NOTES
You should read this preliminary pricing supplement
together with the prospectus dated August 31, 2010, as supplemented by the prospectus supplement dated May 27, 2011 and the Index Supplement dated May 31, 2011 relating to our Global Medium-Term Notes, Series A, of which these Notes
are a part. This preliminary pricing supplement, together with the documents listed below, contains the terms of the Notes and supersedes 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 under Risk
Factors in the prospectus supplement and the Index Supplement, as the Notes 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 Notes.
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):
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Prospectus dated August 31, 2010:
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http://www.sec.gov/Archives/edgar/data/312070/000119312510201448/df3asr.htm
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Prospectus Supplement dated May 27, 2011:
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http://www.sec.gov/Archives/edgar/data/312070/000119312511152766/d424b3.htm
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Index Supplement dated May 31, 2011:
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http://www.sec.gov/Archives/edgar/data/312070/000119312511154632/d424b3.htm
Our SEC file number is 1-10257. As used in this preliminary pricing supplement, the Company, we, us, or
our refers to Barclays Bank PLC.
What is the Total Return on the Notes at Maturity Assuming a Range of Performance for the
Index?
The following table illustrates the hypothetical total return at maturity on the Notes. The total return as used in
this preliminary pricing supplement is the number, expressed as a percentage, that results from comparing the payment at maturity per $1,000 principal amount Note to $1,000. The hypothetical total returns set forth below are for illustrative
purposes only and may not be the actual total returns applicable to a purchaser of the Notes. The numbers appearing in the following table and examples have been rounded for ease of analysis. Note that, for purposes of the hypothetical total returns
set forth below, we are assuming a hypothetical Initial Level of 1,371.09. These examples do not take into account any tax consequences from investing in the Notes.
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Final Level
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Index Return
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Payment at
Maturity*
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Total Return on Notes
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2,742.18
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100.00%
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$1,182.00
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18.20%
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2,673.63
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95.00%
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$1,182.00
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18.20%
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2,536.52
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85.00%
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$1,182.00
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18.20%
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2,399.41
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75.00%
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$1,182.00
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18.20%
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2,262.30
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65.00%
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$1,182.00
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18.20%
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2,125.19
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55.00%
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$1,182.00
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18.20%
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1,988.08
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45.00%
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$1,182.00
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18.20%
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1,850.97
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35.00%
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$1,182.00
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18.20%
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1,713.86
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25.00%
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$1,182.00
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18.20%
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1,620.63
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18.20%
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$1,182.00
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18.20%
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1,576.75
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15.00%
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$1,150.00
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15.00%
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1,508.20
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10.00%
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$1,100.00
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10.00%
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1,439.64
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5.00%
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$1,050.00
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5.00%
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1,405.37
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2.50%
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$1,025.00
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2.50%
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1,371.09
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0.00%
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$1,000.00
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0.00%
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1,302.54
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-5.00%
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$1,000.00
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0.00%
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1,233.98
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-10.00%
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$1,000.00
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0.00%
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1,165.43
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-15.00%
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$944.44
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-5.56%
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1,096.87
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-20.00%
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$888.89
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-11.11%
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959.76
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-30.00%
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$777.78
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-22.22%
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822.65
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-40.00%
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$666.67
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-33.33%
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685.55
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-50.00%
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$555.56
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-44.44%
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548.44
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-60.00%
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$444.45
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-55.56%
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411.33
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-70.00%
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$333.33
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-66.67%
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274.22
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-80.00%
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$222.22
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-77.78%
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137.11
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-90.00%
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$111.11
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-88.89%
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0.00
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-100.00%
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$0.00
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-100.00%
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*
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per $1,000 principal amount Note
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PPS-2
Hypothetical Examples of Amounts Payable at Maturity
The following examples illustrate how the total returns set forth in the table above are calculated.
Example 1: The level of the Index increases from an Initial Level of 1,371.09 to a Final Level of 1,439.64.
Because the Index Return of 5.00% does not exceed the Maximum Return of 18.20%, the investor receives a payment at maturity of $1,050.00 per $1,000.00
principal amount Note calculated as follows:
$1,000 + [$1,000 × Index Return]
$1,000 + [$1,000 × 5.00%] = $1,050.00
The total return on the investment of the Notes is 5.00%.
Example 2: The level of the Index
decreases from an Initial Level of 1,371.09 to a Final Level of 1,302.54.
Because the Final Level of 1,302.54 is less than the Initial
Level of 1,371.09 by a percentage equal to or less than the Buffer Percentage of 10.00%, the investor will receive a payment at maturity of $1,000.00 per $1,000.00 principal amount Note.
The total return on the investment of the Notes is 0.00%.
Example 3: The level of the Index
increases from an Initial Level of 1,371.09 to a Final Level of 1,713.86.
Because the Index Return of 25.00% exceeds the Maximum Return of
18.20%, the investor will receive a payment at maturity of $1,182.00 per $1,000.00 principal amount Note, the maximum total payment on the Notes.
The total return on the investment of the Notes is 18.20%.
Example 4: The level of the Index
decreases from an Initial Level of 1,371.09 to a Final Level of 959.76.
Because the Final Level of 959.76 is less than the Initial Level
of 1,371.09 by more than the Buffer Percentage of 10.00%, the investor will receive a payment at maturity of $777.78 per $1,000.00 principal amount Note calculated as follows:
$1,000 + [$1,000 × (Index Return + Buffer Percentage) × Downside Leverage Factor]
$1,000 + [$1,000 × (-30.00% + 10.00%) × 1.11111] = $777.78
The total return on the
investment of the Notes is -22.22%.
Selected Purchase Considerations
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Market Disruption Events and Adjustments
The Final Valuation Date, the Maturity Date and the payment at maturity are subject to adjustment
as described in the following sections of the prospectus supplement:
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For a description of what constitutes a market disruption event with respect to the Index as well as the consequences of that market disruption event,
see Reference AssetsIndicesMarket Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities; and
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For a description of further adjustments that may affect the Index, see Reference AssetsIndicesAdjustments Relating to Securities
with the Reference Asset Comprised of an Index.
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PPS-3
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Exposure to U.S. Equities of the Index
The return on the Notes is linked to the performance of the Index from the Initial Level to the
Final Level. Such exposure will be on a leveraged basis if and to the extent the Final Level decreases from the Initial Level by more than the Buffer Percentage of 10.00%. The Index consists of 500 component stocks selected to provide a performance
benchmark for the U.S. equity markets. For additional information about the Index, see the information set forth under Non Proprietary IndicesEquity IndicesS&P 500
®
Index in the accompanying Index Supplement.
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Material U.S. Federal Income Tax Considerations
The material tax consequences of your investment in the Notes are summarized below. The
discussion below supplements the discussion under Certain U.S. Federal Income Tax Considerations in the accompanying prospectus supplement. Except as noted under Non-U.S. Holders below, this section applies to you only if you
are a U.S. holder (as defined in the accompanying prospectus supplement) and you hold your Notes as capital assets for tax purposes and does not apply to you if you are a member of a class of holders subject to special rules or are otherwise
excluded from the discussion in the prospectus supplement (for example, if you did not purchase your Notes in the initial issuance of the Notes).
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The United States federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different
than described below. Pursuant to the terms of the Notes, Barclays Bank PLC and you agree, in the absence of a change in law or an administrative or judicial ruling to the contrary, to characterize your Notes as a pre-paid cash-settled executory
contract with respect to the Index. If your Notes are so treated, you should generally recognize capital gain or loss upon the sale or maturity of your Notes in an amount equal to the difference between the amount you receive at such time and the
amount you paid for your Notes. Such gain or loss should generally be long-term capital gain or loss if you have held your Notes for more than one year.
In the opinion of our special tax counsel, Sullivan & Cromwell LLP, it would be reasonable to treat your Notes in the manner described above. This opinion assumes that the description of the
terms of the Notes in this preliminary pricing supplement is materially correct.
As discussed further in the accompanying
prospectus supplement, the Treasury Department and the Internal Revenue Service are actively considering various alternative treatments that may apply to instruments such as the Notes, possibly with retroactive effect.
For a further discussion of the tax treatment of your Notes as well as possible alternative characterizations, please see the discussion
under the heading Certain U.S. Federal Income Tax ConsiderationsCertain Notes Treated as Forward Contracts or Executory Contracts in the accompanying prospectus supplement. You should consult your tax advisor as to the possible
alternative treatments in respect of the Notes. For additional, important considerations related to tax risks associated with investing in the Notes, you should also examine the discussion in Selected Risk ConsiderationsTaxes, in
this preliminary pricing supplement.
Specified Foreign Financial Asset Reporting.
Under legislation enacted
in 2010, owners of specified foreign financial assets with an aggregate value in excess of $50,000 (and in some circumstances, a higher threshold) may be equired to file an information report with respect to such assets with their tax
returns. Specified foreign financial assets generally include any financial accounts maintained by foreign financial institutions, as well as any of the following (which may include your Notes), but only if they are not held in accounts
maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign
entities. Holders are urged to consult their tax advisors regarding the application of this legislation to their ownership of the Notes.
Non-U.S. Holders
. The Treasury Department has issued proposed regulations under Section 871 of the Internal Revenue Code which could ultimately require us to treat all or a portion of any
payment in respect of your Notes as a dividend equivalent payment that is subject to withholding tax at a rate of 30% (or a lower rate under an applicable treaty). You could also be required to make certifications prior to, or upon the
sale or maturity of the Notes in order to avoid or minimize withholding obligations, and you could be subject to withholding (subject to your potential right to claim a refund from the IRS) if such certifications were not received or were not
satisfactory. You should consult your tax advisor concerning the potential application of these regulations to payments you receive with respect to the Notes when these regulations are finalized.
Selected Risk Considerations
An investment in the Notes involves significant risks. Investing in the Notes is not equivalent to investing directly in the Index. These risks are explained in more detail in the Risk Factors
section of the prospectus supplement, including the risk factors discussed under the following headings:
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Risk FactorsRisks Relating to All Securities;
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Risk FactorsAdditional Risks Relating to Notes Which Are Not Characterized as Being Fully Principal Protected or Are Characterized as Being
Partially Protected or Contingently Protected;
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PPS-4
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Risk FactorsAdditional Risks Relating to Notes Which Pay No Interest;
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Risk FactorsAdditional Risks Relating to Securities with a Maximum Return, Maximum Rate, Ceiling or Cap;
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Risk FactorsAdditional Risks Relating to Securities with a Barrier Percentage or a Barrier Level; and
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Risk FactorsAdditional Risks Relating to Securities with Reference Assets That Are Equity Securities or Shares or Other Interests in
Exchange-Traded Funds, That Contain Equity Securities or Shares or Other Interests in Exchange-Traded Funds or That Are Based in Part on Equity Securities or Shares or Other Interests in Exchange-Traded Funds.
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In addition to the risks described above, you should consider the following:
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Your Investment in the Notes May Result in Significant Loss; You May be Exposed to Any Declines From the Initial Level to the Final Level of the
Index on a Leveraged Basis
The Notes do not guarantee any return of principal. The return on the Notes at maturity is linked to the performance of the Index and will depend on whether, and the extent to which, the Index Return is positive
or negative. If the Index declines by more than 10% from the Initial Level to the Final Level, you will lose 1.11111% of the principal amount of your Notes for every 1% that the Index Return falls below -10%. Accordingly, your investment will be
exposed on a leveraged basis to any decline from the Initial Level to the Final Level beyond the Buffer Percentage of 10.00%. You may lose up to 100% of the principal amount of your Notes if the Index declines from the Initial Level to the Final
Level.
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Limited Protection Only at Maturity and Only to the Extent Afforded by the Buffer Percentage
If the Index Return is negative, the payment
at maturity of the Notes will depend on the extent to which the Final Level of the Index declines from the Initial Level of the Index. If the Final Level declines from the Initial Level by more than 10%, you will lose an amount equal to 1.11111% of
the principal amount of your Notes for every 1% that the Index Return falls below -10%. Any payment on the Notes, including any principal protection feature, 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 Credit of Issuer in this preliminary pricing supplement.
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Any Positive Return on the Notes Will Not Exceed the Maximum Return
If the Index Return is greater than 0%, for each $1,000 principal
amount Note, you will receive at maturity $1,000 plus an additional amount that will not exceed the Maximum Return multiplied by $1,000. Accordingly, the maximum payment that you may receive at maturity will be $1,182.00 per $1,000 principal amount
Note.
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Credit of Issuer
The Notes are senior unsecured debt obligations of the issuer, Barclays Bank PLC and are not, either directly or
indirectly, an obligation of any third party. Any payment to be made on the Notes, including any principal protection provided at maturity, depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due and is not guaranteed
by any third party. In the event Barclays Bank PLC were to default on its obligations, you may not receive any amounts owed to you under the terms of the Notes.
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No Interest or Dividend Payments or Voting Rights
As a holder of the Notes, you will not receive interest payments, and you will not have
voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities comprising the Index would have.
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The Payment at Maturity of Your Notes is Not Based on the Level of the Index at Any Time Other than the Index Closing Level on the Final Valuation
Date
The Final Level of the Index will be based solely on the Index Closing Level on the Final Valuation Date. Therefore, if the level of the Index drops precipitously on the Final Valuation Date, the payment at maturity, if any, that you
will receive for your Notes may be significantly less than it would otherwise have been had such payment been linked to the level of the Index prior to such drop.
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Certain Built-In Costs Are Likely to Adversely Affect the Value of the Notes Prior to Maturity
While the payment at maturity described in
this preliminary pricing supplement is based on the full principal amount of your Notes, the original issue price of the Notes includes the agents commission and the cost of hedging our obligations under the Notes through one or more of our
affiliates. As a result, the price, if any, at which Barclays Capital Inc. and other affiliates of Barclays Bank PLC will be willing to purchase Notes from you in secondary market transactions will likely be lower than the original issue price, and
any sale prior to the Maturity Date could result in a substantial loss to you. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
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Lack of Liquidity
The Notes will not be listed on any securities exchange. Barclays Capital Inc. and other affiliates of Barclays Bank PLC
intend to offer to purchase the Notes in the secondary market but are not required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the Notes easily. Because other dealers are not
likely to make a secondary market for the Notes, the price at which you may be able to trade your Notes is likely to depend on the price, if any, at which Barclays Capital Inc. and other affiliates of Barclays Bank PLC are willing to buy the Notes.
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Potential Conflicts
We and our affiliates play a variety of roles in connection with the issuance of the Notes, including acting as
calculation agent and hedging our obligations under the Notes. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the Notes.
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PPS-5
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Taxes
The U.S. federal income tax treatment of the Notes is uncertain and the Internal Revenue Service could assert that the Notes should
be taxed in a manner that is different than described above. As discussed further in the accompanying prospectus supplement, the Internal Revenue Service issued a notice in 2007 indicating that it and the Treasury Department are actively considering
whether, among other issues, you should be required to accrue interest over the term of an instrument such as the Notes and whether all or part of the gain you may recognize upon the sale or maturity of an instrument such as the Notes could be
treated as ordinary income. Similarly, the Internal Revenue Service and the Treasury Department have current projects open with regard to the tax treatment of pre-paid forward contracts, contingent notional principal contracts and other derivative
contracts. While it is impossible to anticipate how any ultimate guidance would affect the tax treatment of instruments such as the Notes (and while any such guidance may be issued on a prospective basis only), such guidance could be applied
retroactively and could in any case increase the likelihood that you will be required to accrue income over the term of an instrument such as the Notes even though you will not receive any payments with respect to the Notes until maturity. The
outcome of this process is uncertain. You should consult your tax advisor as to the possible alternative treatments in respect of the Notes.
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Many Economic and Market Factors Will Impact the Value of the Notes
In addition to the level of the Index on any day, the value of the
Notes will be affected by a number of economic and market factors that may either offset or magnify each other, including:
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the expected volatility of the Index;
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the time to maturity of the Notes;
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the dividend rate on the common stocks underlying the Index;
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interest and yield rates in the market generally;
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the supply and demand for the Notes;
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a variety of economic, financial, political, regulatory or judicial events; and
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our creditworthiness, including actual or anticipated downgrades in our credit ratings.
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Historical Information
The following
graph sets forth the historical performance of the Index based on the daily Index Closing Level from August 27, 2003 through March 12, 2012. The Index Closing Level on March 12, 2012 was 1,371.09.
We obtained the Index Closing Levels below from Bloomberg, L.P. We make no representation or warranty as to the accuracy or completeness of the
information obtained from Bloomberg, L.P. The historical levels of the Index should not be taken as an indication of future performance, and no assurance can be given as to the Index Closing Level on the Final Valuation Date. We cannot give you
assurance that the performance of the Index will result in the return of any of your initial investment.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
PPS-6
SUPPLEMENTAL PLAN OF DISTRIBUTION
We will agree to sell to Barclays Capital Inc. (the
Agent
), and the Agent will agree to purchase from us, the principal amount of the Notes, and at the price, specified on the cover of
the related pricing supplement, the document that will be filed pursuant to Rule 424(b) containing the final pricing terms of the Notes. The Agent will commit to take and pay for all of the Notes, if any are taken.
PPS-7