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 |
$29,917,290(2) | $4,080.72 |
| (1) | Calculated in accordance with Rule 457(r) of the Securities Act of 1933. |
| (2) | Calculated on the basis of 2,991,729 units each having a $10 principal amount per unit. |
| Pricing Supplement (To the Prospectus dated August 31, 2010, the Prospectus Supplement dated May 27, 2011, and the Product Supplement STOCK ARN-1 dated May 14, 2013) |
Filed Pursuant to Rule 424(b)(2) Registration No. 333-169119 |
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” and “Additional Risk Factors” beginning on page TS-5 of this term sheet and “Risk Factors” beginning on page S-8 of product supplement STOCK ARN-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.
| Per Unit |
Total |
|||||||||
| Public offering price (1) (2) |
$10.00 | $29,917,290.00 | ||||||||
| Underwriting discount (1) (2) |
$0.20 | $598,345.80 | ||||||||
| Proceeds, before expenses, to Barclays |
$9.80 | $29,318,944.20 | ||||||||
The notes:
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed | May Lose Value |
Merrill Lynch & Co.
May 30, 2013
2,991,729 Units $10 principal amount per unit CUSIP No. Barclays Pricing Date May 30, 2013 Settlement Date June 6, 2013 Maturity Date July 25, 2014 Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks ¡ Maturity of approximately 14 months ¡ 3-to-1 upside exposure to increases in the Basket, subject to a capped return of 18.03% ¡ 1-to-1 downside exposure to decreases in the Basket, with 100% of your investment at risk ¡ The Basket is comprised of an equal weighting of Exxon Mobil Corporation, Occidental Petroleum Corporation and Schlumberger Limited (the “Basket Stocks”) ¡ All payments occur at maturity and are subject to the credit risk of Barclays Bank PLC ¡ No periodic interest payments ¡ 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. Enhanced Return
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Summary
The Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 (the “notes”) are our senior unsecured debt securities. The notes are not guaranteed or insured by the 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 you a leveraged return, subject to a cap, if the Ending Value (determined as described below) of the Basket of Three Energy Sector Stocks (the “Basket”) is greater than the Starting Value. If the Ending Value is less than the Starting Value, you will lose all or a portion of the principal amount of your notes.
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:
| § | Product supplement STOCK ARN-1, dated May 14, 2013: |
http://www.sec.gov/Archives/edgar/data/312070/000119312513222478/d539828d424b2.htm
| § | Series A MTN prospectus supplement dated May 27, 2011: |
http://www.sec.gov/Archives/edgar/data/312070/000119312511152766/d424b3.htm
| § | Prospectus dated August 31, 2010: |
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 STOCK ARN-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.
| Accelerated Return Notes® | TS-2 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Investor Considerations
We urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
Hypothetical Payout Profile
|
This graph reflects the returns on the notes, based on the Participation Rate of 300% and the Capped Value of $11.803. The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in the Basket Stocks, excluding dividends.
This graph has been prepared for purposes of illustration only. |
| Accelerated Return Notes® | TS-3 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Hypothetical Payments at Maturity
The following table and examples are for purposes of illustration only. They are based on hypothetical values and show hypothetical returns on the notes. The actual amount you receive and the resulting total rate of return will depend on the actual Ending Value, and term of your investment.
The following table is based on a Starting Value of 100, the Participation Rate of 300%, and the Capped Value of $11.803 per unit. It illustrates the effect of a range of Ending Values on the Redemption Amount per unit of the notes and the total rate of return to holders of the notes. The following examples do not take into account any tax consequences from investing in the notes.
| Ending Value |
Percentage Change from Value to the Ending Value |
Redemption |
Total Rate | |||||||||||||||
| 50.00 | -50.00 | % | $5.000 | -50.00 | % | |||||||||||||
| 60.00 | -40.00 | % | $6.000 | -40.00 | % | |||||||||||||
| 70.00 | -30.00 | % | $7.000 | -30.00 | % | |||||||||||||
| 80.00 | -20.00 | % | $8.000 | -20.00 | % | |||||||||||||
| 90.00 | -10.00 | % | $9.000 | -10.00 | % | |||||||||||||
| 95.00 | -5.00 | % | $9.500 | -5.00 | % | |||||||||||||
| 98.00 | -2.00 | % | $9.800 | -2.00 | % | |||||||||||||
| 100.00 | (1) | 0.00 | % | $10.000 | 0.00 | % | ||||||||||||
| 102.00 | 2.00 | % | $10.600 | 6.00 | % | |||||||||||||
| 105.00 | 5.00 | % | $11.500 | 15.00 | % | |||||||||||||
| 110.00 | 10.00 | % | $11.803 | (2) | 18.03 | % | ||||||||||||
| 120.00 | 20.00 | % | $11.803 | 18.03 | % | |||||||||||||
| 130.00 | 30.00 | % | $11.803 | 18.03 | % | |||||||||||||
| 140.00 | 40.00 | % | $11.803 | 18.03 | % | |||||||||||||
| 150.00 | 50.00 | % | $11.803 | 18.03 | % | |||||||||||||
| (1) | The Starting Value was set to 100.00 on the pricing date. |
| (2) | The Redemption Amount per unit cannot exceed the Capped Value. |
For recent actual prices of the Basket Stocks, see “The Basket Stocks” section below. The Ending Value will not include any income generated by dividends paid on the Basket Stocks, which you would otherwise be entitled to receive if you invested in those stocks directly. In addition, all payments on the notes are subject to issuer credit risk.
Redemption Amount Calculation Examples
Example 1
The Ending Value is 80.00, or 80.00% of the Starting Value:
| Starting Value: |
100.00 | ||||||
| Ending Value: |
80.00 | ||||||
| $10 × |
( | 80 | ) | = $8.00 Redemption Amount per unit | ||||||||||||
| 100 | ||||||||||||||||
Example 2
The Ending Value is 104.00, or 104.00% of the Starting Value:
| Starting Value: |
100.00 | ||||||
| Ending Value: |
104.00 |
| $10 + |
[ | $10 × 300% × | ( | 104 – 100 | ) | ] | = $11.20 Redemption Amount per unit | |||||||||||
| 100 | ||||||||||||||||||
Example 3
The Ending Value is 130.00, or 130.00% of the Starting Value:
| Starting Value: |
100.00 | ||||||
| Ending Value: |
130.00 |
| $10 + |
[ | $10 × 300% × | ( | 130 – 100 | ) | ] | = $19.00, however, because the Redemption Amount for the notes cannot exceed the Capped Value, the Redemption Amount will be $11.803 per unit | |||||||||||
| 100 | ||||||||||||||||||
| Accelerated Return Notes® | TS-4 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
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 STOCK ARN-1 and page S-5 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.
| § | Depending on the performance of the Basket as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal. |
| § | 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. |
| § | 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. |
| § | Your investment return, if any, is limited to the return represented by the Capped Value and may be less than a comparable investment directly in the Basket Stocks. |
| § | 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. |
| § | 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 the notes, as described on page TS-12 and various credit, market and economic factors that interrelate in complex and unpredictable ways. |
| § | Our business, hedging and trading activities, and those of MLPF&S and our respective affiliates (including trades in shares of the Basket Stocks), 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. |
| § | Changes in the prices of the Basket Stocks may offset each other. |
| § | You will have no rights of a holder of the Basket Stocks, and you will not be entitled to receive shares of the Basket Stocks or dividends or other distributions by the issuers of the Basket Stocks. |
| § | While we, MLPF&S or our respective affiliates may from time to time own shares of the Basket Stocks, we, MLPF&S and our respective affiliates do not control any company included in any Basket Stock, and are not responsible for any disclosure made by any other company. |
| § | The Redemption Amount will not be adjusted for all corporate events that could affect a Basket Stock. See “Description of ARNs — Anti-Dilution Adjustments for ARNs Linked to Underlying Stocks” beginning on page S-22 of product supplement STOCK ARN-1. |
| § | There may be potential conflicts of interest involving the calculation agent. We have the right to appoint and remove the calculation agent. |
| § | The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See “Supplemental Material U.S. Federal Income Tax Consequences” below, “Certain U.S. Federal Income Tax Considerations beginning on page S-132 of the accompanying prospectus supplement and “Material U.S. Federal Income Tax Considerations” beginning on page S-32 of product supplement STOCK ARN-1. |
| Accelerated Return Notes® | TS-5 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Additional Risk Factors
The stocks included in the Basket are concentrated in one sector. All of the stocks included in the Basket are issued by companies in the energy sector. Although an investment in the notes will not give holders any ownership or other direct interests in the Basket Stocks, the return on an investment in the notes will be subject to certain risks associated with a direct equity investment in companies in the energy sector. Accordingly, by investing in the notes, you will not benefit from the diversification which could result from an investment linked to companies that operate in multiple sectors.
Adverse conditions in the energy sector may reduce your return on the notes. All of the Basket Stocks are issued by companies whose primary lines of business are directly associated with the energy sector. Stock prices for these types of companies are affected by supply and demand both for their specific product or service and for energy products in general. The price of oil and gas, exploration and production spending, government regulation, world events and economic conditions will likewise affect the performance of these companies. Correspondingly, the stocks of companies in the energy sector are subject to swift price fluctuations caused by events relating to international politics, energy conservation, the success of exploration projects and tax and other governmental regulatory policies. Weak demand for the companies’ products or services or for energy products and services in general, as well as negative developments in these other areas, would adversely impact the level of Basket. This in turn could adversely impact the market value of the notes and decrease the Redemption Amount.
| Accelerated Return Notes® | TS-6 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
The Basket
The Basket is designed to allow investors to participate in the percentage changes of the Basket from the Starting Value to the Ending Value. The Basket Stocks are described in the section “The Basket Stocks” below. Each Basket Stock was assigned an initial weight on the pricing date, as set forth in the table below.
For more information on the calculation of the value of the Basket, please see the section entitled “Description of ARNs — Basket Market Measures” on page S-27 of product supplement STOCK ARN-1.
On the pricing date, for each Basket Stock, the Initial Component Weight, the Closing Market Price, the Component Ratio and the initial contribution to the Basket value is as follows:
| Basket Stock |
NYSE Symbol |
Initial Component Weight |
Closing Market Price(1) |
Component Ratio(2) |
Initial Basket Value Contribution | ||||||||||||||||||||
| Exxon Mobil Corporation |
XOM | 33.34% | 92.09 | 0.36203714 | 33.34 | ||||||||||||||||||||
| Occidental Petroleum Corporation |
OXY | 33.33% | 94.75 | 0.35176781 | 33.33 | ||||||||||||||||||||
| Schlumberger Limited |
SLB | 33.33% | 74.81 | 0.44552867 | 33.33 | ||||||||||||||||||||
| Starting Value | 100.00 | ||||||||||||||||||||||||
| (1) | These were the Closing Market Prices of the Basket Stocks on the pricing date. |
| (2) | Each Component Ratio equals the Initial Component Weight of the relevant Basket Stock (as a percentage) multiplied by 100, and then divided by the Closing Market Price of that Basket Stock on the pricing date and rounded to eight decimal places. |
The calculation agent will calculate the value of the Basket by summing the products of the Closing Market Price for each Basket Stock (multiplied by its Price Multiplier) on the calculation day and the Component Ratio applicable to that Basket Stock. The Price Multiplier for each Basket Stock will initially be 1, and is subject to adjustment as described in the product supplement. If a Market Disruption Event occurs as to any Basket Stock on the scheduled calculation day, the Closing Market Price of that Basket Stock will be determined as more fully described in the section entitled “Description of ARNs — Determining the Starting Value and the Ending Value” beginning on page S-19 of product supplement STOCK ARN-1.
| Accelerated Return Notes® | TS-7 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
While actual historical information on the Basket did not exist before the pricing date, the following graph sets forth the hypothetical historical monthly performance of the Basket from January 2008 through April 2013. The graph is based upon actual month-end historical levels of the Basket Stocks, hypothetical Component Ratios determined as of December 31, 2007, and a Basket value of 100.00 as of that date.
This hypothetical historical data on the Basket is not necessarily indicative of the future performance of the Basket or what the value of the notes may be. Any historical upward or downward trend in the value of the Basket during any period set forth above is not an indication that the value of the Basket is more or less likely to increase or decrease at any time over the term of the notes.
| Accelerated Return Notes® | TS-8 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
The Basket Stocks
We have derived the following information about the Underlying Companies from publicly available documents that they have published. We have not independently verified the following information.
Because each Basket Stock is registered under the Securities Exchange Act of 1934, the Underlying Companies are required to file periodically certain financial and other information specified by the SEC. Information provided to or filed with the SEC by the Underlying Companies 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 SEC’s web site at http://www.sec.gov by reference to the applicable CIK number set forth below.
This term sheet relates only to the notes and does not relate to any securities of the Underlying Companies. Neither we nor any of our affiliates have participated or will participate in the preparation of the Underlying Companies’ publicly available documents. Neither we nor any of our affiliates have made any due diligence inquiry with respect to the Underlying Companies 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 Companies that would affect the trading price of the Basket Stocks, 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 Companies could affect the value of the Basket Stocks and therefore could affect your return on the notes. The selection of the Basket Stocks is not a recommendation to buy or sell shares of the Basket Stocks.
The tables set forth below shows the quarterly high and low Closing Market Prices of the shares of the Basket Stocks on their primary exchange from the first quarter of 2008 through the pricing date. These historical trading prices may have been adjusted to reflect certain corporate actions such as stock splits and reverse stock splits. 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.
Exxon Mobil Corporation
Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a worldwide basis. The company’s operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. Exxon Mobil also manufactures and markets fuels, lubricants, and chemicals. This Basket Stock trades on the NYSE under the symbol “XOM.” The company’s CIK number is 34088.
| High ($) | Low ($) | |||||||||||
| 2008 |
First quarter | 93.83 | 81.44 | |||||||||
| Second quarter | 94.56 | 84.91 | ||||||||||
| Third quarter | 88.35 | 73.25 | ||||||||||
| Fourth quarter | 83.14 | 62.35 | ||||||||||
| 2009 |
First quarter | 81.64 | 62.22 | |||||||||
| Second quarter | 74.05 | 64.75 | ||||||||||
| Third quarter | 72.75 | 65.12 | ||||||||||
| Fourth quarter | 76.47 | 66.58 | ||||||||||
| 2010 |
First quarter | 70.30 | 64.35 | |||||||||
| Second quarter | 69.29 | 57.07 | ||||||||||
| Third quarter | 62.72 | 56.57 | ||||||||||
| Fourth quarter | 73.42 | 62.19 | ||||||||||
| 2011 |
First quarter | 87.07 | 74.55 | |||||||||
| Second quarter | 88.00 | 76.78 | ||||||||||
| Third quarter | 85.22 | 68.03 | ||||||||||
| Fourth quarter | 85.28 | 71.15 | ||||||||||
| 2012 |
First quarter | 87.49 | 83.53 | |||||||||
| Second quarter | 87.07 | 77.60 | ||||||||||
| Third quarter | 92.30 | 83.11 | ||||||||||
| Fourth quarter | 93.48 | 85.10 | ||||||||||
| 2013 |
First quarter | 91.76 | 87.70 | |||||||||
| Second quarter (through the pricing date) | 92.80 | 86.08 | ||||||||||
| Accelerated Return Notes® | TS-10 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Occidental Petroleum Corporation
Occidental Petroleum Corporation explores for, develops, produces, and markets crude oil and natural gas. The company also manufactures and markets a variety of basic chemicals, vinyls and performance chemicals. Occidental also gathers, treats, processes, transports, stores, trades and markets crude oil, natural gas, NGLs, condensate and carbon dioxide (CO2) and generates and markets power. This Basket Stock trades on the NYSE under the symbol “OXY.” The company’s CIK number is 797468.
| High ($) | Low ($) | |||||||||||
| 2008 |
First quarter | 80.51 | 64.53 | |||||||||
| Second quarter | 97.85 | 74.88 | ||||||||||
| Third quarter | 91.44 | 65.00 | ||||||||||
| Fourth quarter | 67.42 | 40.72 | ||||||||||
| 2009 |
First quarter | 62.16 | 47.56 | |||||||||
| Second quarter | 70.63 | 54.77 | ||||||||||
| Third quarter | 79.15 | 59.57 | ||||||||||
| Fourth quarter | 84.48 | 74.33 | ||||||||||
| 2010 |
First quarter | 84.54 | 76.01 | |||||||||
| Second quarter | 89.99 | 77.15 | ||||||||||
| Third quarter | 82.92 | 72.23 | ||||||||||
| Fourth quarter | 99.03 | 78.63 | ||||||||||
| 2011 |
First quarter | 107.37 | 93.81 | |||||||||
| Second quarter | 115.74 | 96.89 | ||||||||||
| Third quarter | 108.08 | 71.50 | ||||||||||
| Fourth quarter | 101.29 | 68.58 | ||||||||||
| 2012 |
First quarter | 105.46 | 94.43 | |||||||||
| Second quarter | 97.48 | 77.33 | ||||||||||
| Third quarter | 91.95 | 82.65 | ||||||||||
| Fourth quarter | 86.38 | 73.59 | ||||||||||
| 2013 |
First quarter | 88.68 | 78.01 | |||||||||
| Second quarter (through the pricing date) | 94.75 | 78.95 | ||||||||||
| Accelerated Return Notes® | TS-10 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Schlumberger Limited
Schlumberger Limited is an oil services company. The company, through its subsidiaries, provides a wide range of services, including technology, project management and information solutions to the international petroleum industry as well as advanced acquisition and data processing surveys. This Basket Stock trades on the NYSE under the symbol “SLB.” The company’s CIK number is 87347.
| High ($) | Low ($) | |||||||||||
| 2008 |
First quarter | 102.31 | 74.86 | |||||||||
| Second quarter | 108.42 | 89.24 | ||||||||||
| Third quarter | 109.86 | 73.75 | ||||||||||
| Fourth quarter | 76.87 | 37.74 | ||||||||||
| 2009 |
First quarter | 47.60 | 35.19 | |||||||||
| Second quarter | 62.18 | 41.10 | ||||||||||
| Third quarter | 62.41 | 49.20 | ||||||||||
| Fourth quarter | 70.76 | 56.83 | ||||||||||
| 2010 |
First quarter | 71.29 | 60.76 | |||||||||
| Second quarter | 73.15 | 51.75 | ||||||||||
| Third quarter | 63.26 | 53.33 | ||||||||||
| Fourth quarter | 83.63 | 61.20 | ||||||||||
| 2011 |
First quarter | 95.04 | 80.53 | |||||||||
| Second quarter | 93.70 | 80.64 | ||||||||||
| Third quarter | 94.70 | 59.73 | ||||||||||
| Fourth quarter | 77.15 | 57.72 | ||||||||||
| 2012 |
First quarter | 80.00 | 67.64 | |||||||||
| Second quarter | 75.13 | 59.67 | ||||||||||
| Third quarter | 77.60 | 64.94 | ||||||||||
| Fourth quarter | 74.80 | 67.77 | ||||||||||
| 2013 |
First quarter | 81.56 | 70.92 | |||||||||
| Second quarter (through the pricing date) | 77.59 | 69.95 | ||||||||||
| Accelerated Return Notes® | TS-11 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
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 ARNs” beginning on page S-8 and “Use of Proceeds” on page S-17 of product supplement STOCK ARN-1.
| Accelerated Return Notes® | TS-12 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
|
Supplemental Material U.S. Federal Income Tax Consequences
The material tax consequences of your investment in the notes are summarized below. The discussion below supplements the discussion under “Certain U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and under “Material U.S. Federal Income Tax Considerations” in product supplement STOCK ARN-1. This section applies to you only if you are a U.S. holder (as defined in product supplement STOCK ARN-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 STOCK ARN-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 cash-settled executory contract with respect to the Market Measure. 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, the notes should be treated in the manner described above. No assurance can be given that the Internal Revenue Service 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 “Material U.S. Federal Income Tax Considerations” beginning on page S-32 of product supplement STOCK ARN-1 and one or more of these might ultimately govern the tax treatment of the notes.
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.
| Accelerated Return Notes® | TS-13 |
| Accelerated Return Notes® Linked to a Basket of Three Energy Sector Stocks, due July 25, 2014 |
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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 Return Market-Linked Investment or guarantee any performance.
Enhanced Return Market-Linked Investments are short- to medium-term investments that offer you a way to enhance exposure to a particular market view without taking on a similarly enhanced level of market downside risk. They can be especially effective in a flat to moderately positive market (or, in the case of bearish investments, a flat to moderately negative market). In exchange for the potential to receive better-than market returns on the linked asset, you must generally accept market downside risk and capped upside potential. As these investments are not market downside protected, and do not assure full repayment of principal at maturity, you need to be prepared for the possibility that you may lose all or part of your investment.
“Accelerated Return Notes®” and “ARNs®” are registered service marks of Bank of America Corporation, the parent company of MLPF&S.
| Accelerated Return Notes® | TS-14 |