FWP 1 dfwp.htm FREE WRITING PROSPECTUS - E-3350 Free Writing Prospectus - E-3350

Free Writing Prospectus

(To the Prospectus dated February 10, 2009,

the Prospectus Supplement dated February 10, 2009)

  

Filed Pursuant to Rule 433

Registration No. 333-145845

June 12, 2009

 

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100% Principal Protected Notes due June 30, 2014

Linked to the Performance of United States Natural Gas Fund, LP

 

Medium-Term Notes, Series A, No. E-3350

Terms used in this free writing prospectus, but not defined herein, shall have the meanings ascribed to them in the prospectus supplement.

 

Issuer:    Barclays Bank PLC (Rated AA-/Aa3)
Initial Valuation Date:    June 25, 2009
Issue Date:    June 30, 2009
Final Valuation Date:    June 25, 2014*
Maturity Date:    June 30, 2014* (resulting in a term to maturity of approximately 60 months)
Denominations:    Minimum denomination of $1,000, and integral multiples of $1,000 in excess thereof
Reference Asset:    Units of United States Natural Gas Fund, LP (Bloomberg ticker symbol “UNG<US>”) (the “linked share”)
Interest:    We will not pay you interest during the term of the Notes.
Participation Rate:    100.00%
Maximum Return:   

75.00%-90.00%**

 

**     Actual maximum return will be determined on initial valuation date and will not be less than 75.00%

Payment at Maturity:   

If you hold your Notes to maturity, you will receive a cash payment determined as follows:

 

•        if the Reference Asset Return is greater than 0%, you will receive, per $1000 principal amount of your Notes, (a) the principal amount plus (b) the principal amount multiplied by the product of (i) the Reference Asset Return and (ii) the participation rate, subject to a maximum return of 75.00%:

 

$1,000 + [$1,000 x Reference Asset Return x Participation Rate]

 

•        if the Reference Asset Return is less than or equal to 0%, you will receive the principal amount of your Notes.

 

Your principal is only protected if you hold the Notes to maturity.

Reference Asset Return:   

The performance of the Reference Asset from the initial price to the final price, calculated as follows:

 

Final Price – Initial Price

Initial Price

Initial Price:    [], the closing price of the linked share on the initial valuation date.
Final Price:    The closing price of the linked share on the final valuation date.
Calculation Agent:    Barclays Bank PLC
CUSIP/ISIN:    06739JGX5 and US06739JGX54

 

The Notes are expected to carry the same rating as the Medium-Term Notes Program, Series A, which is rated AA- by Standard & Poor's, a division of the McGraw-Hill Companies, Inc, and will be rated Aa3 by Moody’s Investor Services, Inc. The rating is subject to downward revision, suspension or withdrawal at any time by the assigning rating organization. The rating (1) does not take into account market risk or the performance-related risks of the investment (including, without limitation, the risks associated with the potential negative performance of any reference asset to which the Notes are linked), and (2) is not a recommendation to buy, sell or hold securities.
* Subject to postponement in the event of a market disruption event and as described under “Reference Assets—Equity Securities—Market Disruption Events Relating to Securities with an Equity Security as the Reference Asset” in the prospectus supplement.

Investing in the Notes involves a number of risks. See “Risk Factors” beginning on page S-5 of the prospectus supplement and “Selected Risk Considerations” beginning on page FWP-4 of this free writing prospectus.

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 free writing prospectus 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.

 

   

Price to Public

 

Agent’s Commission**

 

Proceeds to Barclays Bank PLC

Per Note

  100%   %   %

Total

  $   $   $

 

** 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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Barclays Bank PLC has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (“SEC”) for the offering to which this free writing prospectus relates. Before you invest, you should read the prospectus dated February 10, 2009, the prospectus supplement dated February 10, 2009, and other documents Barclays Bank PLC has filed with the SEC for more complete information about Barclays Bank PLC and this offering. Buyers should rely upon the prospectus, prospectus supplement and any relevant free writing prospectus or pricing supplement for complete details. You may get these documents and other documents Barclays Bank PLC has filed for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Barclays Bank PLC or any agent or dealer participating in this offering will arrange to send you the prospectus, prospectus supplement, preliminary pricing supplement, if any, and final pricing supplement (when completed) and this free writing prospectus if you request it by calling your Barclays Bank PLC sales representative, such dealer or 1-888-227-2275 (Extension 1101). A copy of the prospectus may be obtained from Barclays Capital, 200 Cedar Knolls Road, Building E, 4th Floor—Attn: US Syndicate Operations, Whippany, NJ 07981.

You may revoke your offer to purchase the Notes at any time prior to the time at which we accept such offer by notifying the applicable agent. 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 free writing prospectus together with the prospectus dated February 10, 2009, as supplemented by the prospectus supplement dated February 10, 2009 relating to our Medium-Term Notes, Series A, of which these Notes are a part. This free writing prospectus, 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 in “Risk Factors” in the prospectus 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):

 

 

Prospectus dated February 10, 2009:

http://www.sec.gov/Archives/edgar/data/312070/000119312509023285/dposasr.htm

 

 

Prospectus Supplement dated February 10, 2009:

http://www.sec.gov/Archives/edgar/data/312070/000119312509023309/d424b3.htm

Our SEC file number is 1-10257. As used in this free writing prospectus, 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 Linked Share?

The following table illustrates the hypothetical total return at maturity on the Notes. The “total return” as used in this free writing prospectus 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.

 

Final Price of

the Linked

Share

 

Reference Asset

Return

 

Payment at Maturity

 

Total Return on Notes

$28.08

  100.00%   $1,750.00   75.00%

$26.68

  90.00%   $1,750.00   75.00%

$25.27

  80.00%   $1,750.00   75.00%

$23.87

  70.00%   $1,700.00   70.00%

$22.46

  60.00%   $1,600.00   60.00%

$21.06

  50.00%   $1,500.00   50.00%

$19.66

  40.00%   $1,400.00   40.00%

$18.25

  30.00%   $1,300.00   30.00%

$16.85

  20.00%   $1,200.00   20.00%

$15.44

  10.00%   $1,100.00   10.00%

$14.74

  5.00%   $1,050.00   5.00%

$14.04

  0.00%   $1,000.00   0.00%

$13.34

  -5.00%   $1,000.00   0.00%

$12.64

  -10.00%   $1,000.00   0.00%

$11.93

  -15.00%   $1,000.00   0.00%

$11.23

  -20.00%   $1,000.00   0.00%

$10.53

  -25.00%   $1,000.00   0.00%

$7.02

  -50.00%   $1,000.00   0.00%

$3.51

  -75.00%   $1,000.00   0.00%

$0.00

  -100.00%   $1,000.00   0.00%

 

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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 closing price of the linked share increases from an initial price of $14.04 to a final price of $16.85.

Because the final price of $16.85 is greater than the initial price of $14.04, the Reference Asset Return of 20.00% is greater than 0% and the Reference Asset Return of 20.00% multiplied by the Participation Rate is less than the maximum return, the investor receives a total payment at maturity of $1,200.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 x 20.00% x 100%] = $1200.00

The total return on the investment of the Notes is 20.00%.

Example 2: The closing price of the linked share increases from an initial price of $14.04 to a final price of $27.38.

Because the final price of $27.38 is greater than the initial price of $14.04, the Reference Asset Return of 95.00% is greater than 0% and the Reference Asset Return of 95.00% multiplied by the Participation Rate exceeds the maximum return, the investor receives a payment at maturity of $1,750.00 per $1,000 principal amount Note, the maximum payment on the Notes, calculated as follows:

$1,000 + [$1,000 x 75.00% x 100%] = $1,750.00

Example 3: The closing price of the linked share decreases from the initial price of $14.04 to a final price of $13.34.

Because the final price of $13.34 is less than the initial price of $14.04, the investor will receive a payment at maturity of $1000 per $1000 principal amount Note.

Selected Purchase Considerations

 

 

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:

 

   

For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “Reference Assets—Equity Securities—Market Disruption Events Relating to Securities with an Equity Security as the Reference Asset” with respect to the reference asset; and

 

   

For a description of further adjustments that may affect the reference asset, see “Reference Assets—Equity Securities—Share Adjustments Relating to Securities with an Equity Security as the Reference Asset—Antidilution Adjustments”.

 

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Appreciation Potential The Notes provide the opportunity to enhance returns by entitling you to the positive Reference Asset Return, up to the maximum return on the Notes. Actual maximum return will be set on the initial valuation date and will not be less than 75.00%. Because the Notes are our senior unsecured obligations, payment of any amount at maturity is subject to our ability to pay our obligations as they become due.

 

   

Certain U.S. Federal Income Tax Considerations—Some of the 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. As described in the prospectus supplement, this section applies to you only if 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. In addition, this discussion applies to you only if you are an initial purchaser of the Notes; if you are a secondary purchaser of the Notes, the tax consequences to you may be different.

The following section is the opinion of our special tax counsel, Sullivan & Cromwell LLP, and it assumes that the description of the terms of the Notes in this free writing prospectus is materially correct. The Notes should be treated as debt instruments subject to special rules governing contingent payment debt obligations for United States federal income tax purposes. Except as otherwise noted, the discussion below assumes that the Notes will be treated as such. If you are a U.S. individual or taxable entity, you generally will be required to accrue interest on a current basis in respect of the Notes over their term based on the comparable yield for the Notes and pay tax accordingly, even though you will not receive any payments from us until maturity. This comparable yield is determined solely to calculate the amount on which you will be taxed prior to maturity and is neither a prediction nor a guarantee of what the actual yield will be. In addition, any gain you may recognize on the sale or maturity of the Notes will be taxed as ordinary interest income and any loss you may realize on the sale or maturity of the Notes would generally be ordinary loss to the extent of the interest you previously included as income in respect of the Notes and thereafter would be capital loss. If you are a secondary purchaser of the Notes, the tax consequences to you may be different.

It is possible that the Internal Revenue Service could seek to characterize your Notes in a manner that results in tax consequences that are different from those described above. For example, it is possible that the Internal Revenue Service could assert that Section 1256 of the Internal Revenue Code should apply to your Notes or a portion of your Notes. If Section 1256 were to apply to your Notes, gain or loss recognized with respect to your Notes (or the relevant portion of your Notes) would be treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss, without regard to your holding period in the Notes. You would also be required to mark your Notes (or a portion of your Notes) to market at the end of each year (i.e., recognize income as if the Notes or relevant portion of the Notes had been sold for fair market value). Under this alternative treatment, it is also possible that you could be required to recognize gain or loss each time a contract tracked by the linked share rolls.

For a further discussion of the tax treatment of your Notes, including information regarding obtaining the comparable yield for your Notes, please see the discussion under the heading “Certain U.S. Federal Income Tax Considerations—U.S. Federal Income Tax Treatment of the Notes as Indebtedness for U.S. Federal Income Tax Purposes—Contingent Payment Debt Instruments” in the accompanying prospectus supplement.

Selected Risk Considerations

An investment in the Notes involves significant risks. Investing in the Notes is not equivalent to investing directly in the linked share. 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:

 

   

“Risk Factors—Risks Relating to All Securities”;

 

   

“Risk Factors—Additional Risks Relating to Notes Which Pay No Interest”; and

 

   

“Risk Factors—Additional 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.

 

In addition to the risks described above, you should consider the following:

 

   

Barclays Wealth, the wealth management division of Barclays Capital Inc., may sell the Notes to certain of its customers and may receive compensation from Barclays Bank PLC in this capacity, which may create a potential conflict of interest. Barclays Wealth is not acting as your agent or investment adviser, and is not representing you in any capacity in connection with your purchase of the Notes—Barclays Wealth, the wealth management division of Barclays Capital Inc., may arrange for the sale of the Notes to certain of its clients. In doing so, Barclays Wealth will be acting as agent for Barclays Bank PLC and may receive compensation from Barclays Bank PLC in the form of discounts and commissions. The role of Barclays Wealth as a provider of certain services to such customers and as agent for Barclays Bank

 

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PLC in connection with the distribution of the Notes to investors may create a potential conflict of interest, which may be adverse to such clients. Barclays Wealth is not acting as your agent or investment adviser, and is not representing you in any capacity with respect to any purchase of Notes by you. Barclays Wealth is acting solely as agent for Barclays Bank PLC. If you are considering whether to invest in the Notes through Barclays Wealth, we strongly urge you to seek independent financial and investment advice to assess the merits of such investment.

 

   

The Notes Might Not Pay More Than the Principal Amount—You may receive a lower payment at maturity than you would have received if you had invested directly in the linked share. If the Reference Asset Return is negative, you will not receive a payment at maturity of more than the principal amount of your Notes. This will be true even if the Reference Asset Return was positive at some time during the term of the Notes but later fell below 0%.

 

   

Your Maximum Gain on the Notes Is Limited to the Maximum Return—If the final price is greater than the initial price, for each $1,000 principal amount Note, you will receive at maturity $1,000 plus an additional amount that will not exceed 75.00% (actual maximum return will be determined on the initial valuation date) of the principal amount, even though the Reference Asset Return multiplied by the Participation Rate may be greater than the maximum return.

 

   

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 the linked share would have.

 

   

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 free writing prospectus is based on the full principal amount of your Notes, the original issue price of the Notes includes the agent’s 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.

 

   

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.

 

   

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.

 

   

Many Economic and Market Factors Will Impact the Value of the Notes—In addition to the price of the linked share 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:

 

   

the expected volatility of the linked share;

 

   

the time to maturity of the Notes;

 

   

the dividend rate underlying the linked share;

 

   

interest and yield rates in the market generally;

 

   

a variety of economic, financial, political, regulatory or judicial events; and

 

   

our creditworthiness, including actual or anticipated downgrades in our credit ratings.

Description of the Linked Share

According to publicly available information, United States Natural Gas Fund, LP (the “Fund”) is a limited partnership organized on September 11, 2006. The Fund seeks to replicate the performance, net of expenses, of natural gas. The Fund is a commodity pool that issues limited partnership interests (“units”) traded on the NYSE Arca, Inc.

The investment objective of the Fund is for the changes in percentage terms of its units’ net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract for natural gas traded on the New York Mercantile Exchange. The Fund began trading on April 18, 2007. United States Commodity Funds LLC is the Fund’s general partner and is responsible for the management of Fund.

 

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Information provided to or filed with the Commission by the Fund pursuant to the Securities Act of 1933 and the Investment Company Act of 1940 can be located by reference to Commission file number 001-33096.

Historical Information

The following graph sets forth the historical performance of the linked share based on the daily closing prices from July 19, 2007 through June 10, 2009. The linked share closing price on June 10, 2009 was 14.04.

We obtained the historical trading price information 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 prices of the linked share should not be taken as an indication of future performance, and no assurance can be given as to the linked share closing price on the final valuation date. We cannot give you assurance that the performance of the linked share will result in the return of any of your initial investment.

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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

 

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