424B2 1 d424b2.htm PRICING SUPPLEMENT E-6850 Pricing Supplement E-6850

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

   $4,100,000    $476.01*

 

(1) Calculated in accordance with Rule 457(r) of the Securities Act of 1933
 * The additional filing fee relates solely to the additional issuance of $4,100,000 principal amount of Securities (CUSIP: 06738KSC6). A filing fee of $330.89 for the issuance of $2,850,000 principal amount of such Securities was previously paid in connection with the filing dated August 11, 2011. The aggregate amount of the Securities is $6,950,000.


Pricing Supplement dated August 11, 2011, amended as of August 23, 2011

(To the Prospectus dated August 31, 2010,

the Prospectus Supplement dated May 27, 2011

and Index Supplement dated May 31, 2011)

  

Filed Pursuant to Rule 424(b)(2)

Registration No. 333-169119

 

LOGO

  

$6,950,000

 

Digital SuperTrackSM Notes due February 28, 2013

Linked to the Performance of the Russell 2000® Index

 

Global Medium-Term Notes, Series A, No. E-6850

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

 

Issuer:    Barclays Bank PLC
Initial Valuation Date:    August 11, 2011
Issue Date:    August 26, 2011
Final Valuation Date:    February 25, 2013*
Maturity Date:    February 28, 2013**
Denominations:    Minimum denomination of $1,000, and integral multiples of $1,000 in excess thereof
Reference Asset:    Russell 2000® Index (the “Index”) (Bloomberg ticker symbol “RTY <Index>”)
Public Offering Price:    Variable Price Re-Offer
Maximum Return:    20.00%
Digital Percentage:    20.00%
Payment at Maturity:   

If no Barrier Event occurs, you will receive at maturity (subject to our credit risk) a cash payment equal to (a) the principal amount of your Notes plus (b) the principal amount of your Notes multiplied by the Digital Percentage, calculated per $1,000 principal amount Note as follows:

 

$1,000 + [$1,000 × Digital Percentage]

 

If a Barrier Event occurs, you will receive at maturity (subject to our credit risk) a cash payment equal to (a) the principal amount of your Notes plus (b) the principal amount of your Notes multiplied by the Index Return, subject to the Maximum Return. For example, if a Barrier Event occurs and the Index Return is greater than 20.00%, you will receive the maximum payment on the Notes of $1,200.00 for every $1,000 principal amount Note that you hold, regardless of the Index Return greater than 20.00%. Accordingly, if a Barrier Event occurs, your payment per $1,000 principal amount Note would be calculated as follows, subject to the Maximum Return:

 

$1,000 + [$1,000 × Index Return]

 

You may lose some or all of your principal if you invest in the Notes. If a Barrier Event occurs and the Index Return is less than 0.00%, your Notes will be fully exposed to any declines of the Index from the Initial Level to the Final Level and you may lose some or all of your principal at maturity. Any payment on the Notes is subject to the creditworthiness of the Issuer and is not guaranteed by any third party. For a description of risks with respect to the ability of Barclays Bank PLC to satisfy its obligations as they come due, see “Credit of Issuer” in this pricing supplement.

Barrier Event:   

A Barrier Event occurs if, as determined by the Calculation Agent, the Index Closing Level is less than the Barrier on any Scheduled Trading Day during the Observation Period; provided, however, that, if a Market Disruption Event occurs with respect to the Index on a Scheduled Trading Day during the Observation Period, the Index Closing Level on such Scheduled Trading Day will be disregarded for purposes of determining whether a Barrier Event occurs.

 

For a description of Market Disruption Events that are applicable to the Index, please see “Reference Assets—Indices—Market Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities” in the accompanying prospectus supplement.

Barrier:    487.12 (equal to 70% of the Initial Level, rounded to the nearest hundredth)
Observation Period:    The period from but excluding the Initial Valuation Date to and including the Final Valuation Date. If the scheduled Final Valuation Date is postponed, the Observation Period will be extended to, and include, the Final Valuation Date as postponed.
Index Return:   

The performance of the Index from the Initial Level to the Final Level, calculated as follows:

 

Final Level – Initial Level
Initial Level

Initial Level:    695.89, the Index Closing Level on the Initial Valuation Date.
Final Level:    The Index Closing Level on the Final Valuation Date.
Index Closing Level:    For any Scheduled Trading Day, the closing level of the Index published at the regular weekday close of trading on that Scheduled Trading Day as displayed on Bloomberg Professional® service page “RTY<Index>” or any successor page on Bloomberg Professional® service or any successor service, as applicable. In certain circumstances, the closing level of the Index will be based on the alternate calculation of the Index as described in “Reference Assets—Adjustments Relating to Securities with the Reference Asset Comprised of an Index or Indices” starting on page S-102 of the accompanying prospectus supplement.
Scheduled Trading Day:    A day on which (a) the value of the Index is published, and (b) trading is generally conducted on the markets on which the securities comprising the Index are traded, in each case as determined by the Calculation Agent in its sole discretion.
Calculation Agent:    Barclays Bank PLC
CUSIP/ISIN:    06738KSC6 and US06738KSC61

 

* Subject to postponement in the event of a market disruption event and as described under “Reference Assets—Indices—Market Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities” in the prospectus supplement.
** Subject to postponement in the event of a market disruption event and as described under “Terms of the Notes—Maturity Date” and “Reference Assets—Indices—Market Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities” 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 PS-6 of this pricing supplement.

The Notes will not be listed on any U.S. securities exchange or quotation system. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense.

We may use this pricing supplement in the initial sale of the Notes. In addition, Barclays Capital Inc. or another of our affiliates may use this pricing supplement in market resale transactions in any Notes after the initial sale. Unless we or our agent informs you otherwise in the confirmation of sale, this pricing supplement is being used in a market resale transaction.

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.

Variable Price Re-Offer: Barclays Capital Inc. has agreed to purchase the Notes from us at 100% of the principal amount minus a commission equal to $15 per $1,000 principal amount, or 1.50%, resulting in aggregate proceeds to Barclays Bank PLC of $6,845,750. 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.

LOGO


ADDITIONAL TERMS SPECIFIC TO THE NOTES

You should read this pricing supplement together with the prospectus dated August 31, 2010, as supplemented by the prospectus supplement dated May 27, 2011 and the index supplement dated May 31, 2011 relating to our Global Medium-Term Notes, Series A, of which these Notes are a part. This pricing supplement, together with the documents listed below, contains the terms of the Notes and supersedes all prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth under “Risk Factors” in the prospectus supplement and the index supplement, as the Notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Notes.

You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):

 

 

Prospectus dated August 31, 2010:

http://www.sec.gov/Archives/edgar/data/312070/000119312510201448/df3asr.htm

 

 

Prospectus Supplement dated May 27, 2011:

http://www.sec.gov/Archives/edgar/data/312070/000119312511152766/d424b3.htm

 

 

Index Supplement dated May 31, 2011:

http://www.sec.gov/Archives/edgar/data/312070/000119312511154632/d424b3.htm

Our SEC file number is 1-10257. As used in this pricing supplement, the “Company,” “we,” “us,” or “our” refers to Barclays Bank PLC.

What is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Index?

The following table illustrates the hypothetical total return at maturity on the Notes. The “total return” as used in this pricing supplement is the number, expressed as a percentage, that results from comparing the payment at maturity per $1,000 principal amount Note to $1,000. The hypothetical total returns set forth below are for illustrative purposes only and may not be the actual total returns applicable to a purchaser of the Notes. The numbers appearing in the following table and examples have been rounded for ease of analysis. The hypothetical total returns set forth below are based on (i) the Initial Level of 695.89, (ii) the Barrier of 487.12 (equal to 70% of the Initial Level, rounded to the nearest hundredth), (iii) the Digital Percentage of 20.00% and (iv) the Maximum Return of 20.00%. These examples do not take into account any tax consequences from investing in the Notes.

 

Final Level

  

Index Return

  

No Barrier Event Occurs

  

A Barrier Event Occurs

     

Payment at

Maturity*

  

Total Return on

Notes

  

Payment at

Maturity*

  

Total Return on

Notes

1,391.78

   100.00%    $1,200.00    20.00%    $1,200.00    20.00%

1,322.19

   90.00%    $1,200.00    20.00%    $1,200.00    20.00%

1,252.60

   80.00%    $1,200.00    20.00%    $1,200.00    20.00%

1,183.01

   70.00%    $1,200.00    20.00%    $1,200.00    20.00%

1,113.42

   60.00%    $1,200.00    20.00%    $1,200.00    20.00%

1,043.84

   50.00%    $1,200.00    20.00%    $1,200.00    20.00%

974.25

   40.00%    $1,200.00    20.00%    $1,200.00    20.00%

904.66

   30.00%    $1,200.00    20.00%    $1,200.00    20.00%

835.07

   20.00%    $1,200.00    20.00%    $1,200.00    20.00%

800.27

   15.00%    $1,200.00    20.00%    $1,150.00    15.00%

765.48

   10.00%    $1,200.00    20.00%    $1,100.00    10.00%

730.68

   5.00%    $1,200.00    20.00%    $1,050.00    5.00%

695.89

   0.00%    $1,200.00    20.00%    $1,000.00    0.00%

626.30

   -10.00%    $1,200.00    20.00%    $900.00    -10.00%

591.51

   -15.00%    $1,200.00    20.00%    $850.00    -15.00%

556.71

   -20.00%    $1,200.00    20.00%    $800.00    -20.00%

487.12

   -30.00%    $1,200.00    20.00%    $700.00    -30.00%

417.53

   -40.00%    N/A    N/A    $600.00    -40.00%

347.95

   -50.00%    N/A    N/A    $500.00    -50.00%

278.36

   -60.00%    N/A    N/A    $400.00    -60.00%

208.77

   -70.00%    N/A    N/A    $300.00    -70.00%

139.18

   -80.00%    N/A    N/A    $200.00    -80.00%

69.59

   -90.00%    N/A    N/A    $100.00    -90.00%

0.00

   -100.00%    N/A    N/A    $0.00    -100.00%

 

* Per $1,000 principal amount Note

 

PS-2


Hypothetical Examples of Amounts Payable at Maturity

The following examples illustrate how the total returns set forth in the table above are calculated.

Example 1: No Barrier Event occurs and the level of the Index increases from the Initial Level of 695.89 to a Final Level of 904.66.

Because no Barrier Event occurs, regardless of the Index Return being greater than 20.00%, the investor receives a payment at maturity of $1,200.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 × Digital Percentage]

$1,000 + [$1,000 × 20.00%] = $1,200.00

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

Example 2: No Barrier Event occurs and the level of the Index decreases from the Initial Level of 695.89 to a Final Level of 591.51.

Because no Barrier Event occurs, regardless of the Index Return being less than 20.00%, the investor receives a payment at maturity of $1,200.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 × Digital Percentage]

$1,000 + [$1,000 × 20.00%] = $1,200.00

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

Example 3: A Barrier Event occurs and the level of the Index increases from the Initial Level of 695.89 to a Final Level of 800.27.

Because a Barrier Event occurs and the Index Return of 15.00% does not exceed the Maximum Return of 20.00%, the investor will receive a payment at maturity of $1,150.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 × Index Return]

$1,000 + [$1,000 × 15%] = 1,150.00

The total return on the investment of the Notes is 15%.

Example 4: A Barrier Event occurs and the level of the Index increases from the Initial Level of 695.89 to a Final Level of 974.25.

Because a Barrier Event occurs and the Index Return of 40.00% exceeds the Maximum Return of 20.00%, the investor will receive a payment at maturity of $1,200.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 × Maximum Return]

$1,000 + [$1,000 × 20.00%] = $1,200.00

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

 

PS-3


Example 5: A Barrier Event occurs and the level of the Index decreases from the Initial Level of 695.89 to a Final Level of 556.71.

Because a Barrier Event occurs and the Index return of -20% is less than 0%, the investor will receive a payment at maturity of $800.00 per $1,000 principal amount Note calculated as follows:

$1,000 + [$1,000 × Index Return]

$1,000 + [$1,000 × -20%] = $800.00

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

Selected Purchase Considerations

 

   

Market Disruption Events and Adjustments—The Final Valuation Date, the Observation Period, 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—Indices—Market Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities” with respect to the Index; and

 

   

For a description of further adjustments that may affect the Index, see “Reference Assets—Indices—Adjustments Relating to Securities with the Reference Asset Comprised of an Index”.

 

   

Appreciation Potential—If no Barrier Event occurs, the Notes provide the opportunity to receive a return equal to the Digital Percentage. If a Barrier Event occurs, the Notes provide the opportunity to access any positive Index Return up to the Maximum Return. 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 and is not guaranteed by any third party.

 

   

Exposure to the U.S. Equities of the Russell 2000® Index—The return on the Notes is linked to the Russell 2000® Index. The Russell 2000® Index is designed to track the performance of the small capitalization segment of the U.S. equity market. For additional information about the Index, see the information set forth under “Non-Proprietary Indices—Equity Indices— Russell 2000® Index” in the index supplement.

 

   

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 are a U.S. holder (as defined in the accompanying prospectus supplement) and you hold your Notes as capital assets for tax purposes and does not apply to you if you are a member of a class of holders subject to special rules or are otherwise excluded from the discussion in the prospectus supplement (for example, if you did not purchase your Notes in the initial issuance of the Notes).

The United States federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different than described below. Pursuant to the terms of the Notes, Barclays Bank PLC and you agree, in the absence of a change in law or an administrative or judicial ruling to the contrary, to characterize your Notes as a pre-paid cash-settled executory contract with respect to the Index. If your Notes are so treated, you should generally recognize capital gain or loss upon the sale or maturity of your Notes in an amount equal to the difference between the amount you receive at such time and the amount you paid for your Notes. Such gain or loss should generally be long-term capital gain or loss if you have held your Notes for more than one year.

In the opinion of our special tax counsel, Sullivan & Cromwell LLP, it would be reasonable to treat your Notes in the manner described above. This opinion assumes that the description of the terms of the Notes in this pricing supplement is materially correct.

As discussed further in the accompanying prospectus supplement, the Treasury Department and the Internal Revenue Service are actively considering various alternative treatments that may apply to instruments such as the Notes, possibly with retroactive effect. Other alternative treatments for your Notes may also be possible under current law. For example, it is possible that the Notes could be treated as a debt instrument that is subject to the special tax rules governing contingent payment debt instruments. If your Notes are so treated, you would be required to accrue interest income over the term of your Notes and you would recognize gain or loss upon the sale or maturity of your Notes in an amount equal to the difference, if any, between the amount you receive at such time and your adjusted basis in your Notes. Any gain you recognize upon the sale or maturity of your Notes would be ordinary income and any loss recognized by you at such time would generally be ordinary loss to the extent of interest you included in income in the current or previous taxable years with respect to your Notes, and thereafter would be capital loss.

For a further discussion of the tax treatment of your Notes as well as other possible alternative characterizations, please see the discussion under the heading “Certain U.S. Federal Income Tax Considerations—Certain Notes Treated as Forward Contracts or Executory Contracts” in the accompanying prospectus supplement. You should consult your tax advisor as to the possible alternative treatments in respect of the Notes. For additional, important considerations related to tax risks associated with investing in the Notes, you should also examine the discussion in “Selected Risk Considerations—Taxes”, in this pricing supplement.

 

PS-4


“Specified Foreign Financial Asset” Reporting. Under legislation enacted in 2010, individuals that own “specified foreign financial assets” with an aggregate value in excess of $50,000 are generally required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” 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. The Internal Revenue Service has suspended this filing requirement for tax returns that are filed before it issues the form on which to report the relevant information. However, once the Internal Revenue Service issues the form, taxpayers that were not required to report in prior years because of the suspension will nevertheless be required to report the relevant information for such prior years on such form. Individuals are urged to consult their tax advisors regarding the application of this legislation to their ownership of the Notes.

Selected Risk Considerations

An investment in the Notes involves significant risks. Investing in the Notes is not equivalent to investing directly in the Index or the component securities of the Index. These risks are explained in more detail in the “Risk Factors” section of the prospectus supplement and the index supplement, including the risk factors discussed under the following headings:

 

   

“Risk Factors—Risks Relating to All Securities”;

 

   

“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;”

 

   

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

 

   

“Risk Factors—Additional Risks Relating to Securities with a Maximum Return, Maximum Rate, Ceiling or Cap”;

 

   

“Risk Factors—Additional Risks Relating to Digital Notes”; and

 

   

“Risk Factors—Additional Risks Relating to Notes with a Barrier Percentage or a Barrier Level”.

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

 

   

Your Investment in the Notes May Result in a Loss—The Notes do not guarantee any return of principal. The return on the Notes at maturity is linked to the performance of the Index and will depend on whether a Barrier Event occurs and the extent to which the Index Return is positive or negative. If a Barrier Event occurs, your Notes will be fully exposed to any decline of the Index from the Initial Level to the Final Level and you may lose some or all of your principal.

 

   

Credit of Issuer—The Notes are senior unsecured debt obligations of the issuer, Barclays Bank PLC and are not, either directly or indirectly, an obligation of any third party. Any payment to be made on the Notes depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. In the event Barclays Bank PLC were to default on its obligations, you may not receive any amounts owed to you under the terms of the Notes.

 

   

Your Gain, if Any, on the Notes Is Limited to the Digital Percentage if No Barrier Event Occurs, or the Maximum Return if a Barrier Event Occurs—If no Barrier Event occurs, regardless of the Index Return (which may be significantly greater than the Digital Percentage), you will receive (subject to our credit risk) at maturity a cash payment equal to (a) the principal amount of your Notes plus (b) the principal amount of your Notes multiplied by the Digital Percentage. If a Barrier Event occurs, you will receive at maturity (subject to our credit risk) a cash payment equal to (a) the principal amount of your Notes plus (b) the principal amount of your Notes multiplied by the Index Return, subject to the Maximum Return.

 

   

The Determination of Whether a Barrier Event Occurs on any Scheduled Trading Day is Not Based On Any Level of the Index at Any Time Other Than the Index Closing Level on such Scheduled Trading Day—A Barrier Event occurs if, as determined by the Calculation Agent, the Index Closing Level is less than the Barrier on any Scheduled Trading Day during the Observation Period. The determination of whether a Barrier Event occurs is therefore not based on any level of the Index at any time other than the Index Closing Level on any Scheduled Trading Day during the Observation Period. For example, if on a Scheduled Trading Day the level of the Index drops precipitously shortly before the close of business on such Scheduled Trading Day and such drop causes the Index Closing Level on such Scheduled Trading Day to fall below the Barrier, assuming that no Market Disruption Event has occurred or existed with respect to the Index on such Scheduled Trading Day, a Barrier Event occurs regardless of whether the level of the Index is greater than or equal to the Barrier at any other time during such Scheduled Trading Day. The payment at maturity, if any, that you will receive for your Notes may be significantly less than it would otherwise have been had the determination of whether a Barrier Event occurs been based on the level of the Index prior to such drop at a time when the level of the Index was at or above the Barrier. The occurrence of a Barrier Event may significantly and adversely affect the market value of your Notes and your ability to sell your Notes.

 

   

If a Barrier Event Occurs, the Payment at Maturity of Your Notes is Not Based on the Level of the Index at Any Time Other than the Final Level of the Index on the Final Valuation Date as Compared to the Initial Level of the Index on the Initial Valuation Date—The Final Level of the Index and the Index Return will be based solely on the Index Closing

 

PS-5


 

Level on the Final Valuation Date (subject to adjustments as described in the prospectus supplement). Therefore, if a Barrier Event occurs and the Index Closing Level drops precipitously on the Final Valuation Date, the payment at maturity, if any, that you will receive for your Notes may be significantly less than it would otherwise have been had the payment at maturity been linked to the level of the Index prior to such drop. If a Barrier Event occurs, although the level of the Index on the Maturity Date or at other times during the life of your Notes may be higher than the Final Level of the Index on the Final Valuation Date, you will not benefit from any increases in the level of the Index other than those increases, if any, represented by the Final Level of the Index on the Final Valuation Date as compared to the Initial Level of the Index on the Initial Valuation Date specified on the cover page of this pricing supplement, subject to the Maximum Return.

 

   

No Principal Protection—If a Barrier Event occurs and the Index Return is less than 0%, the payment at maturity will be less, and possibly significantly less, than the principal amount of your Notes. If a Barrier Event occurs and the Index Return is less than 0%, your Notes will be fully exposed to any decline of the Index from the Initial Level to the Final Level and you may lose some or all of your principal

 

   

No Interest or Dividend Payments or Voting Rights—As a holder of the Notes, you will not receive interest payments, and you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities comprising the Index would have.

 

   

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 pricing supplement 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.

 

   

Taxes—The U.S. federal income tax treatment of the Notes is uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner that is different than described above. As discussed further in the accompanying prospectus supplement, on December 7, 2007, the Internal Revenue Service issued a notice indicating that it and the Treasury Department are actively considering whether, among other issues, you should be required to accrue interest over the term of an instrument such as the Notes even though you will not receive any payments with respect to the Notes until maturity and whether all or part of the gain you may recognize upon the sale or maturity of an instrument such as the Notes could be treated as ordinary income. The outcome of this process is uncertain and could apply on a retroactive basis. You should consult your tax advisor as to the possible alternative treatments in respect of the Notes.

 

   

Many Economic and Market Factors Will Impact the Value of the Notes—In addition to the level of the Index on any day, the value of the Notes will be affected by a number of economic and market factors that may either offset or magnify each other, including:

 

   

the expected volatility of the Index and securities comprising the Index;

 

   

the time to maturity of the Notes;

 

   

the dividend rate on the common stocks underlying the Index;

 

   

interest and yield rates in the market generally;

 

   

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

 

   

supply and demand for the Notes; and

 

   

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

Historical Information

The following graph sets forth the historical performance of the Index based on the daily Index closing level from January 7, 2002 through August 11, 2011. The Index closing level on August 11, 2011 was 695.89.

We obtained the Index closing levels below from Bloomberg, L.P. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg, L.P. The historical levels of the Index should not be taken as an indication of future performance, and no assurance can be given as to the Index closing level on any scheduled trading day during the observation period or on the Final Valuation Date. We cannot give you assurance that the performance of the Index will result in the return of any of your initial investment.

 

PS-6


LOGO

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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.

 

PS-7