424B2 1 d424b2.htm PRICING SUPPLEMENT - 10Y CMT CAPPED FLOATER - UPSIZE Pricing Supplement - 10Y CMT Capped Floater - Upsize

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities Offered

 

Maximum Aggregate Offering Price

 

Amount of Registration Fee(1)

Global Medium-Term Notes, Series A

  $1,750,000*   $124.78*

 

(1) Calculated in accordance with Rule 457(r) of the Securities Act of 1933.
 * This additional filing fee relates solely to the additional issuance of $1,750,000 Securities (CUSIP: 06740LN27). A filing fee of $17.83 for the issuance of $250,000 Securities (CUSIP: 06740LN27) was previously paid in connection with the filing dated May 14, 2010. The new aggregate issuance amount of the Securities is $2,000,000.


Pricing Supplement dated May 26, 2010

(To Prospectus dated February 10, 2009 and

the Prospectus Supplement dated March 1, 2010)

 

Filed Pursuant to Rule 424(b)(2)

Registration No. 333-145845

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US$2,000,000

CAPPED FLOATING RATE NOTES DUE MAY 28, 2020

Principal Amount:

US$2,000,000

Issuer:

Barclays Bank PLC (Rated AA–/Aa3)1

Issue Price:

Variable Price Re-Offer

Series:

Global Medium-Term Notes, Series A

Principal Protection Percentage:

100%

Original Issue Date:

May 28, 2010

Original Trade Date:

May 14, 2010

Maturity Date:

May 28, 2020

CUSIP:

06740LN27

Denominations:

Minimum denominations of US$1,000 and integral multiples of US$1,000 thereafter.

ISIN:

US06740LN278

Interest Rate Type:

Day Count Convention:

x Regular Floating Rate

¨ Inverse Floating Rate (see page S-41 of the prospectus supplement for a description of inverse floating rate Notes)

¨ Actual/360

x 30/360

¨ Actual/Actual

¨ Actual/365

¨ NL/365

¨ 30/365

¨ Actual/366

¨ Actual/252 or Business Days/252

Reference Asset/Reference Rate:

¨ CD Rate

¨ CMS Rate

x CMT Rate (Reuters Screen FRBCMT Page)

¨ Commercial Paper Rate

¨ Eleventh District Cost of Funds Rate

¨ Federal Funds (Effective) Rate

¨ Federal Funds (Open) Rate

¨ EURIBOR

¨ LIBOR

Designated LIBOR Page: Reuters:

¨ Prime Rate

¨ Treasury Rate

¨ Other (see description in this free writing prospectus)

Index Maturity:

10 Years

Interest Rate:

For each Interest Period commencing on or after the Original Issue Date, the interest rate per annum will be equal to the Reference Rate plus the applicable Spread, subject to the applicable Maximum Interest Rate.

Spread

0.30%

Maximum Interest Rate:

10.00%

Business Day:

x New York

x London

¨ Euro

¨ Other ()

Business Day Convention:

x Following

¨ Modified Following

¨ Preceding

¨ Adjusted or x Unadjusted

Interest Payment Dates:

¨ Monthly, x Quarterly, ¨ Semi-Annually, ¨ Annually,

payable in arrears on 28th of February, May, August and November, commencing on August 28, 2010 and ending on the Maturity Date.

Interest Period:

The initial Interest Period will begin on, and include, the Original Issue Date and end on, but exclude, the first Interest Payment Date. Each subsequent Interest Period will begin on, and include, the Interest Reset Date for that Interest Period and end on, but exclude, the next following Interest Payment Date. The final Interest Period will end on, but exclude, the Maturity Date.

Interest Reset Dates:

For each Interest Period, the Interest Payment Date for the immediately preceding Interest Period (or for the initial Interest Period, the Original Issue Date).

Interest Determination Dates:

Two New York Business Days prior to the relevant Interest Reset Date

Settlement:

DTC; Book-entry; Transferable.

Listing:

The Notes will not be listed on any U.S. securities exchange or quotation system.

Agent:

Barclays Capital Inc.

Barclays Capital Inc. has agreed to purchase the Notes from us at 100% of the principal amount minus a commission equal to $35 per $1,000 principal amount, or 3.50%, resulting in aggregate proceeds to Barclays Bank PLC of $1,930,000. Barclays Capital Inc. proposes to offer the Notes from time to time for sale in negotiated transactions, or otherwise, at varying prices to be determined at the time of each sale. Barclays Capital Inc. may also use all or a portion of its commissions on the Notes to pay selling concessions or fees to other dealers.

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 pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense.

1 For further information regarding the ratings assigned to the Global Medium-Term Notes Program, Series A, see “Program Credit Rating” below.


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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.

Investing in the Notes involves a number of risks. See “Risk Factors” beginning on page S-5 of the prospectus supplement and “Selected Risk Factors” below. We urge you to consult your investment, legal, tax, accounting and other advisers and to invest in the Notes only after you and your advisors have carefully considered the suitability of an investment in the Notes in light of your particular circumstances.

Barclays Bank PLC has filed a registration statement (including a prospectus) with the SEC for the offering to which this pricing supplement relates. Before you invest, you should read the prospectus dated February 10, 2009, the prospectus supplement dated March 1, 2010, 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 this pricing supplement, the prospectus, the prospectus supplement, and any relevant free writing prospectus 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, and you may also access the prospectus and prospectus supplement through the links below:

 

   

Prospectus dated February 10, 2009:

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

 

   

Prospectus Supplement dated March 1, 2010:

http://www.sec.gov/Archives/edgar/data/312070/000119312510043357/d424b3.htm

Our Central Index Key, or CIK, on the SEC website is 1-10257.

Alternatively, Barclays Capital Inc. or any agent or dealer participating in this offering will arrange to send you this pricing supplement, the prospectus, the prospectus supplement and any related free writing prospectus if you request it by calling your Barclays Capital Inc. sales representative, such dealer or 1-888-227-2275 (Extension 2-3430). A copy of the prospectus may be obtained from Barclays Capital Inc., 745 Seventh Avenue—Attn: US InvSol Support, New York, NY 10019.

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.

As used in this term sheet, the “Company,” “we,” “us,” or “our” refers to Barclays Bank PLC.

PROGRAM CREDIT RATING

The Notes are issued under the Global Medium-Term Notes Program, Series A (the “Program”). The Program is rated AA– by Standard & Poor’s Rating Services (“S&P”), and the Notes are expected to carry the same S&P rating as the Program rating. An AA– rating from S&P generally indicates that the issuer’s capacity to meet its financial commitment on the obligations arising from the Program is very strong. This rating 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). The Program is also rated Aa3 by Moody’s Investor Services, Inc. (“Moody’s”); however, because we have not sought a rating from Moody’s for this specific issuance, the Notes will not be rated by Moody’s. The ratings mentioned in this paragraph are subject to downward revision, suspension or withdrawal at any time by the assigning rating organization and are not a recommendation to buy, sell or hold securities.


SELECTED RISK FACTORS

An investment in the Notes involves significant risks. You should read the risks summarized below in connection with, and the risks summarized below are qualified by reference to, the risks described in more detail in the “Risk Factors” section beginning on page S-5 of the prospectus supplement. We urge you to consult your investment, legal, tax, accounting and other advisers and to invest in the Notes only after you and your advisors have carefully considered the suitability of an investment in the Notes in light of your particular circumstances.

 

   

Issuer Credit Risk—You will receive at least 100% of the principal amount of your Notes if you hold your Notes to the Maturity Date. Because the Notes are our senior unsecured obligations, payment of any interest or any amount at maturity is subject to our ability to pay our obligations as they become due.

 

   

Reference Rate / Interest Payment Risk—Because the Interest Rate on the Notes is a floating rate, you will be exposed to risks not associated with a conventional fixed-rate debt instrument. These risks include fluctuation of the applicable Interest Rate and the possibility that, for any given Interest Period, you may receive a lesser amount of interest than for one or more prior Interest Periods. We have no control over a number of matters that may affect interest rates, including economic, financial and political events that are important in determining the existence, magnitude and longevity of these risks and their results. In recent years, interest rates have been volatile, and volatility also could be characteristic of the future. In addition, the floating Interest Rate for the Notes may be less than the floating rate payable on a similar Note or other instrument of the same maturity issued by us or an issuer with the same or a comparable credit rating.

 

   

Maximum Interest Rate—The Interest Rate on the Notes for any Interest Period will be limited to the specified Maximum Interest Rate. As a result, in the event that the Interest Rate otherwise calculated for any applicable Interest Period exceeds the Maximum Interest Rate, your interest payment for the relevant Interest Period will reflect the Maximum Interest Rate, and you will lose the benefit of any interest payment that would have been payable had such Maximum Interest Rate not been applicable.

 

   

Certain Built-In Costs Are Likely to Adversely Affect the Value of the Notes Prior to Maturity—Although you will not receive less than the principal amount of the Notes if you hold the Notes to maturity, 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, assuming no change in market conditions or any other relevant factor, 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 may be lower than the Original Issue Price, and any sale prior to the Maturity Date could result in a substantial loss to you.

 

   

Potential Conflicts—We and our affiliates play a variety of roles in connection with the issuance of the Notes, including hedging our obligations under the Notes. In performing these duties, the economic interests of our affiliates of ours are potentially adverse to your interests as an investor in the Notes.

In addition, 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 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.

 

   

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 make a secondary market for the Notes but are not required to do so, and may discontinue any such secondary market making at any time, without notice. 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. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.


   

Many Economic and Market Factors Will Impact the Value of the Notes—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 time to maturity of the Notes;

 

   

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.

HYPOTHETICAL INTEREST RATE AND INTEREST PAYMENT CALCULATIONS

As described above, the effective per annum Interest Notes payable on the Notes on each Interest Payment Date will be a floating rate calculated as described under Interest Rate above. The following illustrates the process by which the Interest Rate and interest payment amount are determined for a particular Interest Period.

Step 1: Determine the value of the Reference Rate for the Interest Period.

For each Interest Period, a per annum value for the Reference Rate is determined on the relevant Interest Reset Date by observing the applicable Reference Rate on the interest determination date relating to that Interest Reset Date. For further information concerning the Interest Determination Dates for the Reference Rate, see “Interest Mechanics—How Floating Interest Rates Are Reset” in the prospectus supplement.

Step 2: Calculate the per annum Interest Rate for the Interest Period by calculating the sum of the Reference Rate and the Spread, while taking into account the Maximum Interest Rate for that Interest Period.

For each Interest Period, once the Calculation Agent has determined the value of the Reference Rate, the Calculation Agent will then determine the per annum Interest Rate for that Interest Period by first calculating the sum of the Reference Rate and the Spread and then assessing such sum relative to the Maximum Interest Rate. If such sum is not greater than the Maximum Interest Rate, the Interest Rate for that Interest period will be equal to such sum. If the Interest Rate otherwise determined for that Interest Period would be greater than the Maximum Interest Rate, the Interest Rate for that Interest Period will be the Maximum Interest Rate.

The following examples illustrate how the Interest Rate for the particular Interest Period would be calculated:

Example 1:

Assuming that the Reference Rate is equal to 3.00%, the sum of the Reference Rate and the Spread (0.30%) would be 3.30%. Since the sum of the Reference Rate and the Spread is not greater than the Maximum Interest Rate of 10.00%, the Interest Rate for that Interest period will be 3.30%.

Example 2:

Assuming that the Reference Rate is equal to 10.00%, the sum of the Reference Rate and the Spread (0.30%) would be 10.30%. The Interest Rate otherwise calculated as 10.30% would not be payable since it is greater than the Maximum Interest Rate of 10.00%. Instead, the Interest Rate for the relevant Interest Period would be equal to the Maximum Interest Rate of 10.00%.

Step 3: Calculate the interest payment amount payable for each Interest Payment Date.

For each Interest Period, once the Calculation Agent has determined the applicable per annum Interest Rate, the Calculation Agent will calculate the effective interest rate for that Interest Period by multiplying the per annum Interest Rate determined for that Interest Period by the applicable day count fraction. The resulting effective interest rate is then multiplied by the relevant principal amount of the Notes to determine the actual interest amount payable on the related Interest Payment Date.


HISTORICAL INFORMATION

The following table shows for illustrative purposes the 10 Year CMT Rate in effect on May 12, 2010, and the hypothetical historical Interest Determination Dates listed below; the Interest Rate payable on any Interest Payment Date for the Notes, however, will be determined based on the 10 Year CMT Rate in effect on the Interest Determination Date for the related Interest Period. The historical experience of the 10 Year CMT Rate should not be taken as an indication of the future performance of such rates during the term of the Notes. Fluctuations in the level of the 10 Year CMT Rate make the Notes’ effective Interest Rate difficult to predict and can result in effective Interest Rates to investors that are lower than anticipated. In addition, historical interest rates are not necessarily indicative of future interest rates. Fluctuations in interest rates and interest rate trends that have occurred in the past are not necessarily indicative of fluctuations that may occur in the future, which may be wider or narrower than those that have occurred historically.

 

Interest Reset Date

  

Interest Determination Date

  

10YCMT

5/28/2005

   5/26/2005    4.08

8/28/2005

   8/25/2005    4.18

11/28/2005

   11/23/2005    4.47

2/28/2006

   2/24/2006    4.58

5/28/2006

   5/25/2006    5.07

8/28/2006

   8/24/2006    4.81

11/28/2006

   11/24/2006    4.55

2/28/2007

   2/26/2007    4.63

5/28/2007

   5/24/2007    4.86

8/28/2007

   8/24/2007    4.63

11/28/2007

   11/26/2007    3.83

2/28/2008

   2/26/2008    3.88

5/28/2008

   5/23/2008    3.85

8/28/2008

   8/26/2008    3.79

11/28/2008

   11/25/2008    3.11

2/28/2009

   2/26/2009    2.98

5/28/2009

   5/26/2009    3.50

8/28/2009

   8/26/2009    3.44

11/28/2009

   11/25/2009    3.28

2/28/2010

   2/25/2010    3.64

5/14/2010

   5/12/2010    3.56


UNITED STATES FEDERAL INCOME TAX TREATMENT

The following discussion (in conjunction with the discussion in the prospectus supplement) summarizes certain of the material U.S. federal income tax consequences of the purchase, beneficial ownership, and disposition of Notes.

We intend to treat the Notes as variable rate debt instruments subject to taxation as described 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—Variable Rate Debt Instruments” in the prospectus supplement. Pursuant to the terms of the Notes, you agree to treat the Notes consistent with our treatment for all U.S. federal income tax purposes.

3.8% Medicare Tax On “Net Investment Income”

Beginning in 2013, U.S. holders that are individuals, estates, and certain trusts will be subject to an additional 3.8% tax on all or a portion of their “net investment income,” which may include the interest payments and any gain realized with respect to the Notes, to the extent of their net investment income that when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate return. U.S. holders should consult their advisors with respect to their consequences with respect to the 3.8% Medicare tax.

Information Reporting

U.S. holders that are individuals (and, to the extent provided in future regulations, entities) may be subject to reporting obligations applicable to certain foreign financial assets with respect to their Notes if the aggregate value of their Notes and their other “specified foreign financial assets” exceeds $50,000. Significant penalties can apply if a U.S. holder fails to disclose its specified foreign financial assets. This information reporting requirement is generally applicable for taxable years beginning after March 18, 2010. We urge you to consult your tax advisor with respect to this and other reporting obligations with respect to your Notes.

PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES.


CERTAIN EMPLOYEE RETIREMENT INCOME SECURITY ACT CONSIDERATIONS

Your purchase of a Note in an Individual Retirement Account (an “IRA”), will be deemed to be a representation and warranty by you, as a fiduciary of the IRA and also on behalf of the IRA, that (i) neither the issuer, the placement agent nor any of their respective affiliates has or exercises any discretionary authority or control or acts in a fiduciary capacity with respect to the IRA assets used to purchase the Note or renders investment advice (within the meaning of Section 3(21)(A)(ii) of the Employee Retirement Income Security Act (“ERISA”)) with respect to any such IRA assets and (ii) in connection with the purchase of the Note, the IRA will pay no more than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA) and in connection with any redemption of the Note pursuant to its terms will receive at least adequate consideration, and, in making the foregoing representations and warranties, you have (x) applied sound business principles in determining whether fair market value will be paid, and (y) made such determination acting in good faith.

For additional ERISA considerations, see “Employee Retirement Income Security Act” in the prospectus supplement.

SUPPLEMENTAL PLAN OF DISTRIBUTION

We have agreed to sell to Barclays Capital Inc. (the “Agent”), and the Agent has agreed to purchase from us, the principal amount of the Notes, and at the price, specified on the cover of this pricing supplement. The Agent is committed to take and pay for all of the Notes, if any are taken.


LOGO

US$2,000,000

BARCLAYS BANK PLC

CAPPED FLOATING RATE NOTES DUE MAY 28, 2020

GLOBAL MEDIUM-TERM NOTES, SERIES A

(TO PROSPECTUS DATED FEBRUARY 10, 2009, AND THE

PROSPECTUS SUPPLEMENT DATED MARCH 1, 2010)

 

 

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