CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities
Offered
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Maximum Aggregate Offering Price
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Amount of Registration Fee
(1)
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Global Medium-Term Notes, Series A
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$121,606,790
(2)
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$16,587.17
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(1)
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Calculated in accordance with Rule 457(r) of the Securities Act of 1933.
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(2)
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Calculated on the basis of 12,160,679 units each having a $10 principal amount per unit.
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Pricing Supplement
(To the Prospectus dated
August 31, 2010, the
Prospectus Supplement dated May 27, 2011, and the
Product Supplement STEPS-1 dated June 9, 2011)
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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-169119
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The notes are being issued by Barclays Bank PLC (Barclays). There are important differences between the notes and
a conventional debt security, including different investment risks. See Risk Factors on page TS-5 of this term sheet and beginning on page S-8 of product supplement STEPS-1.
None of the Securities and Exchange Commission (the SEC), any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note
Prospectus (as defined below) is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Unit
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Total
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Public offering price
(1)
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$10.000
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$121,606,790.00
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Underwriting discount
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$0.175
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$2,128,118.82
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Proceeds, before expenses, to Barclays
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$9.825
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$119,478,671.18
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(1)
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Plus accrued interest from the scheduled settlement date, if settlement occurs after that date.
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The notes:
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Are Not FDIC Insured
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Are Not Bank Guaranteed
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May Lose Value
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Merrill Lynch & Co.
April 11, 2013
STEP Income Securities® Linked to the Common Stock of Ford Motor Company
Maturity of approximately 13 months
Interest payable quarterly at the rate of 8% per year
A payment of $0.752 per unit if the Underlying Stock increases to or above 108.00% of the Starting Value
1-to-1 downside exposure to decreases in the Underlying Stock , with up to 100% of your principal at risk
All payments on the notes subject to the credit risk of Barclays Bank PLC
Limited secondary market liquidity, with no exchange listing
The notes are senior unsecured debt securities and are not deposit liabilities of Barclays Bank PLC. The notes are not insured
by the US Federal Deposit Insurance Corporation or any other governmental agency of the United States, the United Kingdom, or any other jurisdiction
12,160,679 Units
$10 principal amount per unit
CUSIP No. 06742C491
Pricing DateApril 11, 2013
Settlement Date April 18, 2013
Maturity DateMay 23, 2014
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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Summary
The
STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014 (the
notes) are our senior unsecured debt securities. The notes are not guaranteed or 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 or secured by collateral.
The notes will rank equally with all of our other unsecured and unsubordinated debt. Any payments due on the notes, including any repayment of principal, will be subject to the credit risk of Barclays.
The notes provide quarterly interest payments. Additionally, if the Ending Value is at or above the Step Level, the notes will also provide a payment of $0.752 per unit at maturity. If the Ending Value is less than the Step Level, the Redemption
Amount will not be greater than your principal amount. If the Ending Value is less than the Starting Value, the Redemption Amount will be less than the principal amount of your notes, and may be as low as zero.
The terms and risks of the notes are contained in this term sheet and the documents listed below (together, the Note Prospectus). The documents have
been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website as indicated below or obtained from MLPF&S by calling 1-866-500-5408:
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§
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Product supplement STEPS-1 dated June 9, 2011:
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http://www.sec.gov/Archives/edgar/data/312070/000119312511161969/d424b3.htm
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§
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Series A MTN 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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§
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Prospectus dated August 31, 2010:
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http://www.sec.gov/Archives/edgar/data/312070/000119312510201448/df3asr.htm
Before you invest, you should read the Note Prospectus, including this term sheet, for information about us and this offering. Any prior or contemporaneous oral
statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized terms used but not defined in this term sheet have the meanings set forth in product supplement STEPS-1. Unless otherwise indicated
or unless the context requires otherwise, all references in this document to we, us, our, or similar references are to Barclays.
Terms of the Notes
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Issuer:
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Barclays Bank PLC (Barclays)
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Original Offering Price:
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$10 per unit
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Term:
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Approximately 13 months
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Underlying Stock:
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Common stock of Ford Motor Company (the Underlying Company) (NYSE symbol: F)
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Starting Value:
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13.44 (the Volume Weighted Average Price on the pricing date).
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Volume Weighted Average Price:
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The volume weighted average price (rounded to two decimal places) shown on page AQR on
Bloomberg L.P. for trading in shares of the Underlying Stock taking place from approximately 9:30 a.m. to 4:02 p.m. on all U.S. exchanges.
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Ending Value:
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The Closing Market Price of the Underlying Stock on the valuation date, multiplied by the Price
Multiplier. The valuation date is subject to postponement in the event of Market Disruption Events, as described beginning on page S-19 of product supplement STEPS-1.
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Valuation Date:
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May 16, 2014
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Interest Rate:
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8.00% per year
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Interest Payment Dates:
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Quarterly, on August 23, 2013, November 23, 2013, February 23, 2014 and the maturity date
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Step Payment:
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$0.752 per unit, which represents a return of 7.52% of the Original Offering Price.
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Step Level:
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14.52 (108.00% of the Starting Value, rounded to two decimal places).
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Threshold Value:
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13.44 (100.00% of the Starting Value)
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Price Multiplier:
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1, subject to adjustment for certain corporate events relating to the Underlying Stock described beginning
on page S-22 of product supplement STEPS-1.
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Calculation Agent:
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Barclays and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S).
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Fees Charged:
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The public offering price of the notes includes the underwriting discount of $0.175 per unit as listed on
the cover page and an additional charge of $0.075 per unit more fully described on page TS-7.
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Redemption Amount Determination
In addition to interest payable, on the maturity date, you will receive a cash payment per unit determined as follows:
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STEP Income
Securities
®
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TS-2
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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Investor Considerations
You may wish to consider an investment in the notes if:
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You anticipate that the Ending Value will be greater than or equal to the Step Level.
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You seek interest payments on your investment.
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You accept that the maximum return on the notes is limited to the sum of the quarterly interest payments and the Step Payment, if any.
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You accept that your investment will result in a loss, which could be significant, if the Ending Value is below the Starting Value.
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You are willing to forgo dividends or other benefits of owning shares of the Underlying Stock.
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You are willing to accept a limited market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various
factors, including our actual and perceived creditworthiness, and the fees charged on the notes, as described on page TS-2.
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You are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Redemption Amount.
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The notes may not be an appropriate investment for you if:
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You anticipate that the Ending Value will be less than the Step Level.
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You anticipate that the price of the Underlying Stock will increase substantially and do not want a payment at maturity that is limited to the Step Payment.
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You seek 100% principal protection or preservation of capital.
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In addition to interest payments, you seek an additional guaranteed return above the principal amount.
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You seek to receive dividends or other distributions paid on the Underlying Stock.
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You seek an investment for which there will be a liquid secondary market.
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You are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes.
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We urge you to consult your investment, legal,
tax, accounting, and other advisors before you invest in the notes.
Hypothetical Payments at Maturity
The following examples are for purposes of illustration only. They are based on
hypothetical
values and show
hypothetical
payments on the notes.
The actual amount you receive and the resulting return will depend on the actual Starting Value, Threshold Value, Ending Value, Step Level, and term of your investment.
The following examples do not take into account any tax consequences from
investing in the notes. These examples are based on:
1)
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a Starting Value of 100.00;
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2)
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a Threshold Value of 100.00;
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3)
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a Step Level of 108.00;
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4)
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the Step Payment of $0.752 per unit;
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5)
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the term of the notes from April 18, 2013 to May 23, 2014; and
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6)
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the interest rate of 8.00% per year.
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The hypothetical
Starting Value of 100.00 used in these examples has been chosen for illustrative purposes only. The actual Starting Value is 13.44, which was the Volume Weighted Average Price of the Underlying Stock on the pricing date. For recent actual prices of
the Underlying Stock, see The Underlying Stock section below. In addition, all payments on the notes are subject to issuer credit risk.
Example 1
The Ending Value is 115.00 (115.00% of the
Starting Value)
The Ending Value is greater than the Step Level. Consequently, in addition to the quarterly interest payments, you will receive on
the maturity date the principal amount of your notes plus the Step Payment of $0.752 per unit. The Redemption Amount per unit on the maturity date will therefore be equal to $10.752 per unit ($10.000 plus the Step Payment of $0.752 per unit).
Example 2
The Ending Value is 105.00
(105.00% of the Starting Value)
The Ending Value is greater than the Starting Value but below the Step Level. Consequently, you will receive the
quarterly interest payments, but you will not receive the Step Payment on the maturity date. The Redemption Amount per unit on the maturity date will therefore be equal to $10.000.
Example 3
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STEP Income
Securities
®
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TS-3
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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The Ending Value is 70.00 (70.00% of the Starting Value)
The Ending Value is less than the Starting Value and the Threshold Value. Consequently, you will receive the quarterly interest payments, but you will not receive
the Step Payment on the maturity date, and you will participate on a 1-for-1 basis in the decrease in the price of the Underlying Stock. The Redemption Amount per unit will equal:
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$10
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[
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$10 ×
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(
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100.00 70.00
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)
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]
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= $7.00
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100.00
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On the maturity date, you will receive the Redemption Amount per unit of $7.000.
Summary of the Hypothetical Examples
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Example 1
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Example 2
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Example 3
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The Ending Value is
greater than or equal to
the Step Level
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The Ending Value is
less than the Step Level
but greater than or
equal to the Starting
Value
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The Ending Value is
less than the Starting
Value and
the
Threshold Value
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Starting Value
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100.00
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100.00
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100.00
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Ending Value
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115.00
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105.00
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70.00
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Step Level
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108.00
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108.00
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108.00
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Threshold Value
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100.00
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100.00
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100.00
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Interest Rate (per year)
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8.00%
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8.00%
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8.00%
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Step Payment
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$0.752
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$0.000
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$0.000
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Redemption Amount per Unit
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$10.752
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$10.000
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$7.000
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Total Return of the Underlying Stock
(1)
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18.26%
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8.26%
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-26.74%
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Total Return on the Notes
(2)
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16.30%
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8.78%
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-21.22%
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(1)
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The total return of the Underlying Stock assumes:
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(a)
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the percentage change in the price of the Underlying Stock from the Starting Value to the Ending Value;
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(b)
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a constant dividend yield of 2.97% per year; and
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(c)
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no transaction fees or expenses.
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(2)
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The total return on the notes includes interest paid on the notes from April 18, 2013 to May 23, 2014.
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STEP Income
Securities
®
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TS-4
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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Risk Factors
There are important differences between the notes and a conventional debt security. An investment in the notes involves significant risks, including those listed below. You should carefully review the more
detailed explanation of risks relating to the notes in the Risk Factors sections beginning on page S-8 of product supplement STEPS-1 and page S-6 of the Series A MTN prospectus supplement; identified above under Summary. We
also urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
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Depending on the performance of the Underlying Stock as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed
return of principal.
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§
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Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
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§
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Payments on the notes are subject to our credit risk, and actual or perceived changes in our creditworthiness are expected to affect the value of the notes. If
we become insolvent or are unable to pay our obligations, you may lose your entire investment.
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§
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You will not receive a Step Payment at maturity unless the Ending Value is greater than or equal to the Step Level.
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§
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Your investment return, if any, is limited to the return represented by the periodic interest payments over the term of the notes and the Step Payment, if any,
and may be less than a comparable investment directly in the Underlying Stock.
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§
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If you attempt to sell the notes prior to maturity, their market value may be lower than the price you paid for the notes due to, among other things, the
inclusion of fees charged for developing, hedging and distributing of the notes, as described on page TS-7 and various credit, market and economic factors that interrelate in complex and unpredictable ways.
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§
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A trading market is not expected to develop for the notes. We, MLPF&S and our respective affiliates are not obligated to make a market for, or to repurchase,
the notes.
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§
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Our business, hedging and trading activities, and those of MLPF&S and our respective affiliates (including trading in shares of the Underlying Stock), and
any hedging and trading activities we, MLPF&S or our respective affiliates engage in for our clients accounts, may affect the market value and return of the notes and may create conflicts of interest with you.
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§
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The Underlying Company will have no obligations relating to the notes, and neither we nor MLPF&S will perform any due diligence procedures with respect to
the Underlying Company in connection with this offering.
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§
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You will have no rights of a holder of the Underlying Stock, and you will not be entitled to receive shares of the Underlying Stock or dividends or other
distributions by the Underlying Company.
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§
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While we, MLPF&S or our respective affiliates may from time to time own shares of the Underlying Company, we, MLPF&S and our respective affiliates do not
control the Underlying Company, and are not responsible for any disclosure made by the Underlying Company.
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§
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The Redemption Amount will not be adjusted for all corporate events that could affect the Underlying Stock. See Description of the Notes
Anti-Dilution Adjustments beginning on page S-22 of product supplement STEPS-1.
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§
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There may be potential conflicts of interest involving the calculation agent. We have the right to appoint and remove the calculation agent.
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The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See Material U.S. Federal Income Tax
Consequences below and U.S. Federal Income Tax Summary beginning on page S-31 of product supplement STEPS-1.
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Other Terms of the Notes
Business Day
The following definition shall supersede and replace the definition of a Business Day set forth on page S-18 of the product supplement STEPS-1:
A Business Day means any day other than a day on which banking institutions in New York, New York, or London, England are authorized or required by law, regulation, or executive order to close.
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STEP Income
Securities
®
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TS-5
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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The Underlying Stock
We have derived the following information from publicly available documents published by the Underlying Company. We have not independently verified the accuracy or completeness of the following information. Ford
Motor Company designs, manufactures, and services cars and trucks. The company also provides vehicle-related financing, leasing, and insurance through its subsidiary.
Because the Underlying Stock is registered under the Securities Exchange Act of 1934, the Underlying Company is required to file periodically certain financial and other information specified by the SEC.
Information provided to or filed with the SEC by the Underlying Company can be located at the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549 or through the SECs web site at http://www.sec.gov by
reference to SEC CIK number 37996.
This term sheet relates only to the notes and does not relate to the Underlying Stock or to any other securities of
the Underlying Company. None of us, MLPF&S, or any of our respective affiliates has participated or will participate in the preparation of the Underlying Companys publicly available documents. None of us, MLPF&S, or any of our
respective affiliates has made any due diligence inquiry with respect to the Underlying Company in connection with the offering of the notes. Furthermore, there can be no assurance that all events occurring prior to the date of this term sheet,
including events that would affect the accuracy or completeness of publicly available documents regarding the Underlying Company that would affect the trading price of the Underlying Stock, have been or will be publicly disclosed. Subsequent
disclosure of any events or the disclosure of or failure to disclose material future events concerning the Underlying Company could affect the value of the Underlying Stock and therefore could affect your return on the notes. Information from
outside sources is not incorporated by reference in, and should not be considered part of, this term sheet or any accompanying prospectus, prospectus supplement or product supplement. The selection of the Underlying Stock is not a recommendation to
buy or sell the Underlying Stock.
The Underlying Stock trades on the New York Stock Exchange under the symbol F.
Historical Data
The following table shows the quarterly
high and low Closing Market Prices of the shares of the Underlying Stock on its primary exchange from the first quarter of 2008 through the pricing date. We obtained this historical data from Bloomberg L.P. We have not independently verified the
accuracy or completeness of the information obtained from Bloomberg L.P. These historical trading prices may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits.
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High ($)
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Low ($)
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2008
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First Quarter
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6.85
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5.11
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Second Quarter
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8.48
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4.81
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Third Quarter
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6.03
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4.17
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Fourth Quarter
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4.55
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1.26
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2009
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First Quarter
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2.94
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1.58
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Second Quarter
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6.41
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2.74
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Third Quarter
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8.44
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5.35
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Fourth Quarter
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10.20
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6.84
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2010
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First Quarter
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14.10
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10.28
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Second Quarter
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14.46
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9.88
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Third Quarter
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13.16
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10.16
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Fourth Quarter
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17.00
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12.26
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2011
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First Quarter
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18.79
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14.01
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Second Quarter
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15.79
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12.78
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Third Quarter
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14.12
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9.62
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Fourth Quarter
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12.51
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9.37
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2012
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First Quarter
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12.96
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11.13
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Second Quarter
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12.64
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9.59
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Third Quarter
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10.59
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8.92
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Fourth Quarter
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12.95
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9.79
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2013
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First Quarter
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14.30
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12.13
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Second Quarter (through the pricing date)
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13.55
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12.44
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This historical data on the Underlying Stock is not necessarily indicative of the future performance of the Underlying Stock or
what the value of the notes may be. Any historical upward or downward trend in the price per share of the Underlying Stock during any period set forth above is not an indication that the price per share of the Underlying Stock is more or less likely
to increase or decrease at any time over the term of the notes.
Before investing in the notes, you should consult publicly available sources for
the prices and trading pattern of the Underlying Stock.
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STEP Income
Securities
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TS-6
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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Supplement to the Plan of Distribution
We will deliver the notes against payment therefor in New York, New York on a date that is greater than three business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934,
trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes more than three business days prior to the
original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
The notes will not be listed on any
securities exchange. In the original offering of the notes, the notes will be sold in minimum investment amounts of 100 units.
If you place an order to
purchase the notes, you are consenting to MLPF&S acting as a principal in effecting the transaction for your account.
MLPF&S may repurchase and
resell the notes, with repurchases and resales being made at prices related to then-prevailing market prices or at negotiated prices. MLPF&S may act as principal or agent in these market-making transactions; however it is not obligated to engage
in any such transactions.
The distribution of the Note Prospectus in connection with these offers or sales will be solely for the purpose of providing
investors with the description of the terms of the notes that was made available to investors in connection with their initial offering. Secondary market investors should not, and will not be authorized to, rely on the Note Prospectus for
information regarding Barclays or for any purpose other than that described in the immediately preceding sentence.
Role of MLPF&S
Under our distribution agreement with MLPF&S, MLPF&S will purchase the notes from us as principal at the public offering price indicated on the
cover of this term sheet, less the indicated underwriting discount. The public offering price includes, in addition to the underwriting discount, a charge of approximately $0.075 per unit, reflecting an estimated profit earned by MLPF&S from
transactions through which the notes are structured and resulting obligations hedged. Actual profits or losses from these hedging transactions may be more or less than this amount. In entering into the hedging arrangements for the notes, we seek
competitive terms and may enter into hedging transactions with MLPF&S or one of its subsidiaries or affiliates.
All charges related to the notes,
including the underwriting discount and the hedging related costs and charges, reduce the economic terms of the notes. For further information regarding these charges, our trading and hedging activities and conflicts of interest, see Risk
Factors General Risks Relating to the Notes beginning on page S-8 and Use of Proceeds on page S-17 of product supplement STEPS-1.
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STEP Income
Securities
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TS-7
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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Material U.S. Federal Income Tax Consequences
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 product supplement STEPS-1) 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 product supplement STEPS-1 (for example, if you did
not purchase your notes in the initial issuance of the notes).
There is no judicial or administrative authority discussing how your notes should be
treated for U.S. federal income tax purposes. Pursuant to the terms of the notes, you agree with us, 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 income-bearing
cash-settled executory contract with respect to the Underlying Stock. If your notes are so treated, you will likely be taxed on the quarterly interest payments as ordinary income in accordance with your regular method of accounting for U.S. federal
income tax purposes and 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 (other than amounts attributable to a quarterly
interest payment, which will likely be treated as ordinary income) 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. Any character
mismatch arising from your inclusion of ordinary income and capital loss (if any) upon the sale or maturity of your notes may result in adverse tax consequences to you because an investors ability to deduct capital losses is subject to
significant limitations.
In the opinion of our special tax counsel, Sullivan & Cromwell LLP, your notes should be treated in the manner
described above. No assurance can be given that the IRS or any court will agree with this characterization and tax treatment. There are other possible treatments that are described in a detailed discussion of tax considerations under the section
entitled U.S. Federal Income Tax Summary beginning on page S-31 of product supplement STEPS-1 and one or more of these might ultimately govern the tax treatment of the notes.
As discussed further in product supplement STEPS-1, 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. Other alternative treatments for your notes may also be possible under current law. For example, it is possible that your notes could be treated as an investment unit consisting of (i) a debt instrument that is
issued to you by us and (ii) a put option in respect of the Underlying Stock that is issued by you to us.
It is also possible that the notes could
be treated as notional principal contracts that are comprised of a swap component and a loan component. If the notes were treated as notional principal contracts, you could be required to accrue income over the term of your notes in respect of the
loan component (which may exceed the quarterly interest payments that are made on the notes), and any gain or loss that you recognize upon the maturity of your notes would generally be treated as ordinary income or loss.
You should consult your tax advisor with respect to these possible alternative treatments.
You should consult your tax advisor concerning the U.S. federal income tax and other tax consequences of your investment in the notes in your particular circumstances, including the application of state, local or
other tax laws and the possible effects of changes in federal or other tax laws.
Medicare Tax.
As discussed under Certain U.S. Federal
Income Tax Considerations Medicare Tax in the accompanying prospectus supplement, certain U.S. holders will be subject to a 3.8% Medicare tax on their net investment income if their modified adjusted gross income for the
taxable year is over a certain threshold. Net investment income will include any gain that a U.S. holder recognizes upon the sale or maturity of the notes, unless such income is derived in the ordinary course of the conduct of a trade or business
(other than a trade or business that consists of certain passive or trading activities). It is not clear, however, whether the Medicare tax would apply to any quarterly interest payments that you receive on the notes, unless such quarterly interest
payments are derived in the ordinary course of the conduct of a trade or business (in which case the quarterly interest payments should be treated as net investment income if they are derived in a trade or business that consists of certain trading
or passive activities and should otherwise not be treated as net investment income). Accordingly, U.S. holders that do not hold the notes in the ordinary conduct of a trade or business should consult their tax advisors regarding the application of
the Medicare tax to the quarterly interest payments on the notes.
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 required 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
. Barclays currently does not withhold on payments to non-U.S. holders in respect of instruments such as the notes. However, if Barclays
determines that there is a material risk that it will be required to withhold on any such payments, Barclays may withhold on any quarterly interest payments at a 30% rate, unless you have provided to Barclays (i) a valid Internal Revenue
Service Form W-8ECI or (ii) a valid Internal Revenue Service Form W-8BEN claiming tax treaty benefits that reduce or eliminate withholding. If Barclays elects to withhold and you have provided Barclays with a valid Internal Revenue Service Form
W-8BEN claiming tax treaty benefits that reduce or eliminate withholding, Barclays may nevertheless withhold up to 30% on payments it makes to you if there is any possible characterization of the payments that would not be exempt from withholding
under the treaty. Non-U.S. holders will also be subject to the general rules regarding information reporting and backup withholding as described under the heading Certain U.S. Federal Income Tax Considerations Information Reporting and
Backup Withholding in the accompanying prospectus supplement.
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STEP Income
Securities
®
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TS-8
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STEP
Income
S
ecurities
®
Linked to the Common Stock of Ford Motor Company, due May 23, 2014
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In addition, the Treasury Department has issued proposed regulations under Section 871(m) 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). However, such withholding would potentially apply only to payments made after December 31, 2013. You could also be required to make certain certifications 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 Internal Revenue Service) 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.
Where You Can Find More Information
We have filed a registration statement (including a product supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to
which this term sheet relates. Before you invest, you should read the Note Prospectus, including this term sheet, and the other documents that we have filed with the SEC, for more complete information about us and this offering. You may get these
documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S toll-free at
1-866-500-5408.
Market-Linked Investments Classification
MLPF&S classifies certain market-linked investments (the Market-Linked Investments) into categories, each with
different investment characteristics. The following description is meant solely for informational purposes and is not intended to represent any particular Enhanced Income Market-Linked Investment or guarantee any performance.
Enhanced Income Market-Linked Investments are short- to medium-term market-linked notes that offer you a way to enhance your income stream, either through variable
or fixed-interest coupons, an added payout at maturity based on the performance of the linked asset, or both. In exchange for receiving current income, you will generally forfeit upside potential on the linked asset. Even so, the prospect of higher
interest payments and/or an additional payout may equate to a higher return potential than you may be able to find through other fixed-income securities. Enhanced Income Market-Linked Investments generally do not include market downside protection.
The degree to which your principal is repaid at maturity is generally determined by the performance of the linked asset. Although enhanced income streams may help offset potential declines in the asset, you can still lose part or all of your
original investment.
STEP
Income
S
ecurities
®
and STEPS
®
are registered service marks of Bank of
America Corporation, the parent company of MLPF&S.
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STEP Income
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