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
|
$9,805,270
|
$1,337.44
|
(1) Calculated in accordance with Rule 457(r) of the
Securities Act of 1933.
|
July
2013
Final Terms No. 98
Registration Statement No. 333-190038
Dated July 31, 2013
Filed pursuant to Rule 424(b)(2)
|
|
Structured Investments
Opportunities in U.S. Equities
|
|
Contingent Income Auto-Callable Securities due
August 4, 2016
Based on the Performance
of the Common Stock of Apple Inc.
Contingent Income Auto-Callable
Securities offer the opportunity for investors to earn a contingent quarterly payment equal to 2.188% of the stated principal amount
with respect to each quarterly determination date on which the closing price of the underlying stock is greater than or equal to
75% of the initial share price, which we refer to as the downside threshold level. In addition, if the closing price of the underlying
stock is greater than or equal to the initial share price on any determination date, the securities will be automatically redeemed
for an amount per security equal to the stated principal amount plus the contingent quarterly payment. However, if on any determination
date the closing price of the underlying stock is less than the initial share price, the securities will not be redeemed and if
that closing price is less than the downside threshold level, you will not receive any contingent quarterly payment for that quarterly
period. If the securities are not redeemed prior to maturity the payment at maturity due on the securities will be either (i) the
stated principal amount and the contingent quarterly payment or (ii) a number of shares of the underlying stock, or at our option
the cash value thereof, that will be significantly less than the stated principal amount of the securities if the closing price
of the underlying stock is below the downside threshold level on the final determination date. As a result, investors must be willing
to accept the risk of not receiving a contingent quarterly payment and also the risk of receiving shares of the underlying stock,
or the cash value therof, that would be worth significantly less than the stated principal amount of the securities and could be
zero.
Accordingly, the securities do not guarantee any return of principal at maturity and investors could lose their entire
investment in the securities.
Investors will not participate in any appreciation of the underlying stock. The securities are
senior notes issued as part of Barclays Bank PLC’s Global Medium-Term Notes Program. The securities are not, either directly
or indirectly, an obligation of any third party, and any payment to be made on the securities depends on the ability of Barclays
Bank PLC to satisfy its obligations as they come due.
|
SUMMARY TERMS
|
|
|
Issuer:
|
Barclays Bank PLC
|
|
Underlying stock:
|
Apple Inc. common stock
|
|
Aggregate principal amount:
|
$9,805,270
|
|
Stated principal amount:
|
$10 per security
|
|
Issue price:
|
$10 per security (See “Commissions and Initial Issue Price” below)
|
|
Pricing date:
|
July 31, 2013
|
|
Original issue date:
|
August 5, 2013 (3 business days after the pricing date)
|
|
Maturity date:
|
August 4, 2016
|
|
Early redemption:
|
If, on any of the first eleven determination dates, the determination closing price of the underlying stock is greater than or equal to the initial share price, the securities will be automatically redeemed for an early redemption payment on the third business day following the related determination date.
|
|
Early redemption payment:
|
The early redemption payment will be an amount equal to (i) the stated principal amount
plus
(ii) the contingent quarterly payment with respect to the related determination date.
|
|
Determination
closing price:
|
The closing price of the underlying stock on any determination date other than the final determination date.
|
(Key Terms continued on the next page)
Commissions and Initial Issue
Price:
|
Initial Issue
Price
(1)
|
Price to
Public
(2)
|
Agent’s Commissions
(2)
|
Proceeds to Issuer
|
|
Per Securities
|
$10
|
$10
|
$.225
|
$9.775
|
|
Total
|
$9,805,270
|
$9,805,270
|
$220,618.58
|
$9,584,651.42
|
|
|
(1)
|
Our estimated value of the securities on the pricing date, based on our internal pricing models,
is $9.690 per security. The estimated value is less than the initial issue price of the securities. See “Additional Information
Regarding Our Estimated Value of the Securities” on page 3 of this pricing supplement.
|
|
|
(2)
|
MSWM and its financial advisors will collectively receive from the Agent, Barclays Capital Inc.,
a fixed sales commission of $.225 for each security they sell. See “Supplemental Plan of Distribution.”
|
Investing in the Securities involves risks not
associated with an investment in conventional debt securities. See “Risk Factors” beginning on page 11 of this pricing
supplement and on page S-6 of the prospectus supplement. You should read this document together with the related prospectus and
prospectus supplement, each of which can be accessed via the hyperlinks below before you make an investment decision.
Any payment on the Notes, including any repayment of principal,
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 “Risk Factors - The Securities are Subject
to the Credit Risk of the Issuer, Barclays Bank PLC” in this pricing supplement.
Prospectus dated July 19, 2013
Prospectus Supplement dated July 19, 2013
See “Additional Terms of the Securities” on page
4 of this pricing supplement. The securities will have the terms specified in the prospectus dated July 19, 2013, the prospectus
supplement dated July 19, 2013 and this pricing supplement. See “Risk Factors” on page 11 of this pricing supplement
and “Risk Factors” beginning on page S-6 of the prospectus supplement for risks related to investing in the securities.
We may use this pricing supplement in the initial sale of the
securities. In addition, Barclays Capital Inc. or another of our affiliates may use this pricing supplement in market resale transactions
in any of the securities after their 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.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the securities or determined that this pricing supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
Contingent quarterly payment:
|
•
If, on any determination date, the determination closing price or the final share
price, as applicable, is greater than or equal to the downside threshold level, we will pay a contingent quarterly payment
(rounded to the nearest thousandths) of $0.2188 (2.188% of the stated principal amount) per security on the related contingent
payment date.
•
If, on any determination date, the determination closing price or the final share
price, as applicable, is less than the downside threshold level, no contingent quarterly payment will be made with respect
to that determination date.
|
|
Determination dates:
|
October 31, 2013, January 31, 2014, April 30, 2014, July 31, 2014, October 31, 2014, February 2, 2015, April 30, 2015, July 31, 2015, November 2, 2015, February 1, 2016, May 2, 2016, and August 1, 2016, (subject to postponement if a market disruption event occurs or is continuing with respect to the underlying stock on any determination date). We also refer to August 1, 2016 as the final determination date.
|
|
Contingent payment dates:
|
With respect to each determination date other than the final determination date, the third business day after the related determination date. The payment of the contingent quarterly payment, if any, with respect to the final determination date will be made on the maturity date.
|
|
Payment at maturity:
|
•
If the final share price is
greater than or equal to
the downside threshold
level:
|
(i) the stated principal amount
plus
(ii) the contingent
quarterly payment with respect to the final determination date.
|
|
|
•
If the final share price is
less than
the downside threshold level:
|
at our option, per $10 security, (i) a number of shares of the
underlying stock equal to the exchange ratio, each as of the final determination date (the “
physical delivery amount
”)*,
or (ii) the cash value of such shares as of the final determination date determined as follows: the exchange ratio
times
the final share price.
|
|
|
Your payment at maturity may be less and possibly significantly less than $10.00 per Security and could be zero. There is no minimum payment at maturity. The Securities are senior unsecured obligations of Barclays Bank PLC and any payments on the Securities are subject to the creditworthiness of Barclays Bank PLC and is not, either directly or indirectly, an obligation of any third party.
|
|
Exchange
ratio:
|
The stated principal amount divided by the initial share price (rounded to the nearest hundredth thousandths)
|
|
Downside
threshold level:
|
$339.38, which is equal to 75% of the initial share price*
|
|
Initial
share price:
|
$452.50, which is the closing price of the underlying stock on the pricing date*
|
|
Final
share price:
|
The closing price of the underlying stock on the final determination date*
|
|
CUSIP:
|
06742D457
|
|
ISIN:
|
US06742D4575
|
|
Listing:
|
The securities will not be listed on any securities exchange.
|
|
Selected
Dealer:
|
Morgan Stanley Smith Barney LLC (“
Morgan Stanley Wealth Management” (“MSWM
”))
|
|
|
|
|
|
*
|
The physical delivery amount, the initial share price of the underlying stock and other amounts may change due to stock splits or other corporate actions. See “Reference Assets—Equity Securities—Share Adjustments Relating to Securities with an Equity Security as the Reference Asset” in the accompanying prospectus supplement.
|
|
|
Morgan Stanley Smith Barney LLC
|
Barclays Capital Inc
.
|
|
|
|
|
|
|
|
|
Page
2
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
Additional Terms of the Securities
You should read this pricing supplement together
with the prospectus dated July 19, 2013, as supplemented by the prospectus supplement dated July 19, 2013 relating to our Global
Medium-Term Notes, Series A, of which the securities are a part. This pricing supplement, together with the documents listed below,
contain the terms of the securities and supersede 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 securities 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 securities.
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 July 19, 2013:
|
http://www.sec.gov/Archives/edgar/data/312070/000119312513295636/d570220df3asr.htm
|
|
•
|
Prospectus Supplement dated July 19, 2013:
|
http://www.sec.gov/Archives/edgar/data/312070/000119312513295715/d570220d424b3.htm
Our SEC file number is 1-10257 and our Central
Index Key, or CIK, on the SEC website is 0000312070.
As used in this pricing supplement, the “Company,” “we,” “us,” or “our” refers
to Barclays Bank PLC.
The securities constitute Barclays Bank
PLC’s direct, unconditional, unsecured and unsubordinated obligations and are not deposit liabilities 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. In addition, the securities will not be guaranteed by the Federal Deposit Insurance Corporation under the
FDIC’s temporary liquidity guarantee program.
In connection with this offering, Morgan
Stanley Smith Barney LLC is acting in its capacity as a selected dealer.
Additional Information Regarding Our Estimated
Value of the Securities
Our internal pricing models take into account
a number of variables and are based on a number of subjective assumptions, which may or may not materialize, typically including
volatility, interest rates
,
and our internal funding rates. Our internal funding rates (which are our internally published
borrowing rates based on variables such as market benchmarks, our appetite for borrowing, and our existing obligations coming to
maturity) may vary from the levels at which our benchmark debt securities trade in the secondary market. Our estimated value on
the pricing date is based on our internal funding rates. Our estimated value of the securities may be lower if such valuation were
based on the levels at which our benchmark debt securities trade in the secondary market.
Our estimated value of the securities on
the pricing date is less than the initial issue price of the securities. The difference between the initial issue price of the
securities and our estimated value of the securities results from several factors, including any sales commissions to be paid to
Barclays Capital Inc. or another affiliate of ours, any selling concessions, discounts, commissions or fees to be allowed or paid
to non-affiliated intermediaries, the estimated profit that we or any of our affiliates expect to earn in connection with structuring
the securities, the estimated cost which we may incur in hedging our obligations under the securities, and estimated development
and other costs which we may incur in connection with the securities.
Our estimated value on the pricing date is
not a prediction of the price at which the securities may trade in the secondary market, nor will it be the price at which Barclays
Capital Inc. may buy or sell the securities in the secondary market. Subject to normal market and funding conditions, Barclays
Capital Inc. or another affiliate of ours intends to offer to purchase the securities in the secondary market but it is not obligated
to do so.
Assuming that all relevant factors remain
constant after pricing date, the price at which Barclays Capital Inc. may initially buy or sell the
securities
in the secondary market, if any, and the value that we may initially use for customer account statements, if we provide
any customer account statements at all, may exceed our estimated value on the pricing date for a temporary period expected to be
approximately 3 months after the initial issue date of the
securities
because, in our discretion,
we may elect to effectively reimburse to investors a portion of the estimated cost of hedging our obligations under the
securities
and other costs in connection with the
securities
which we will no longer expect to incur
over the term of the
securities
. We made such discretionary election and determined this temporary
reimbursement period on the basis of a number of factors, including the tenor of the
securities
and
any agreement we may have with the distributors of the
securities
. The amount of our estimated
costs which we effectively reimburse to investors in this way may not be allocated ratably throughout the reimbursement period,
and we may discontinue such reimbursement at any time or
Page
3
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
revise the duration of the reimbursement period after the initial issue
date of the
securities
based on changes in market conditions and other factors that cannot be
predicted.
We urge you to read “Risk Factors” beginning on
page 11 of this pricing supplement.
Page
4
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
How the Securities Work
The following diagrams illustrate the potential outcomes for the
securities depending on (1) the determination closing price and (2) the final share price.
Diagram #1: First Eleven Determination Dates
Diagram #2: Payment at Maturity if No Automatic Early Redemption
Occurs
For
more information about the payout upon an early redemption or at maturity in different hypothetical scenarios, see “Hypothetical
Examples” beginning on page 8.
Page 5
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
Hypothetical Examples
The below examples are based on the following terms:
|
Initial Share Price:
|
$452.50
|
|
Downside Threshold Level:
|
$339.38, which is 75% of the initial share price
|
|
Exchange Ratio:
|
0.02210, which is the stated principal amount per security divided by the initial share price
|
|
Contingent Quarterly Payment:
|
$0.2188 (2.188% of the stated principal amount).
|
|
Stated Principal Amount:
|
$10 per security
|
In Examples 1 and 2, the closing price of the
underlying stock fluctuates over the term of the securities and the determination closing price of the underlying stock is greater
than or equal to the hypothetical initial share price of $452.50 on one of the first eleven determination dates. Because the determination
closing price is greater than or equal to the initial share price on one of the first eleven determination dates, the securities
are automatically redeemed following the relevant determination date. In Examples 3 and 4, the determination closing price on the
first eleven determination dates is less than the initial share price, and, consequently, the securities are not automatically
redeemed prior to, and remain outstanding until, maturity. The examples below assume that the securities will be held until maturity
and do not take into account the tax consequences of an investment in the securities.
|
|
Example 1
|
Example 2
|
Determination
Dates
|
Hypothetical
Determination
Closing Price
|
Contingent
Quarterly
Payment (per
$10.00 security)
|
Early
Redemption
Payment (per
$10.00
security)*
|
Hypothetical
Determination
Closing Price
|
Contingent
Quarterly
Payment(per
$10.00 security)
|
Early
Redemption
Payment(per
$10.00
security)
|
|
#1
|
$271.50
|
$0.00
|
N/A
|
$366.56
|
$0.2188
|
N/A
|
|
#2
|
$452.50
|
—*
|
$10.2188
|
$237.28
|
$0.00
|
N/A
|
|
#3
|
N/A
|
N/A
|
N/A
|
$194.94
|
$0.00
|
N/A
|
|
#4
|
N/A
|
N/A
|
N/A
|
$253.27
|
$0.00
|
N/A
|
|
#5
|
N/A
|
N/A
|
N/A
|
$429.86
|
$0.2188
|
N/A
|
|
#6
|
N/A
|
N/A
|
N/A
|
$384.66
|
$0.2188
|
N/A
|
|
#7
|
N/A
|
N/A
|
N/A
|
$207.82
|
$0.00
|
N/A
|
|
#8
|
N/A
|
N/A
|
N/A
|
$354.78
|
$0.2188
|
N/A
|
|
#9
|
N/A
|
N/A
|
N/A
|
$424.81
|
$0.2188
|
N/A
|
|
#10
|
N/A
|
N/A
|
N/A
|
$565.63
|
—*
|
$10.2188
|
|
#11
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|
Final Determination Date
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|
Payment at Maturity
|
N/A
|
N/A
|
* The Early Redemption Payment includes the
unpaid contingent quarterly payment with respect to the determination date on which the determination closing price is greater
than or equal to the initial share price and the securities are redeemed as a result.
|
|
§
|
In
Example 1
, the securities are automatically redeemed following the second determination
date as the determination closing price on the second determination date is equal to the initial share price. You receive the early
redemption payment, calculated as follows:
|
stated principal amount + contingent
quarterly payment = $10 + $0.2188 = $10.2188
Page 6
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
In this example, the early redemption feature
limits the term of your investment to approximately 6 months and you may not be able to reinvest at comparable terms or returns.
If the securities are redeemed early, you will stop receiving contingent payments.
|
|
§
|
In
Example 2
, the securities are automatically redeemed following the tenth determination
date as the determination closing price on the tenth determination date is greater than the initial share price. As the determination
closing prices on the first, fifth, sixth, eighth and ninth determination dates are greater than the downside threshold level,
you receive the contingent payment of $0.2188 with respect to such determination dates. Following the tenth determination date,
you receive an early redemption payment of $10.2188, which includes the contingent quarterly payment with respect to the tenth
determination date.
|
In this example, the early redemption feature
limits the term of your investment to approximately 30 months and you may not be able to reinvest at comparable terms or returns.
If the securities are redeemed early, you will stop receiving contingent payments. Further, although the underlying stock has appreciated
by 25% from its initial share price on the tenth determination date, you only receive $10.2188 per security and do not benefit
from such appreciation.
|
|
Example 3
|
Example 4
|
Determination
Dates
|
Hypothetical
Determination
Closing Price
|
Contingent
Quarterly
Payment(per
$10.00 security)
|
Early
Redemption
Payment(per
$10.00 security)
|
Hypothetical
Determination
Closing Price
|
Contingent
Quarterly
Payment(per
$10.00 security)
|
Early
Redemption
Payment(per
$10.00
security)
|
|
#1
|
$271.50
|
$0
|
N/A
|
$271.50
|
$0
|
N/A
|
|
#2
|
$226.25
|
$0
|
N/A
|
$226.25
|
$0
|
N/A
|
|
#3
|
$181.00
|
$0
|
N/A
|
$181.00
|
$0
|
N/A
|
|
#4
|
$311.68
|
$0
|
N/A
|
$311.68
|
$0
|
N/A
|
|
#5
|
$248.89
|
$0
|
N/A
|
$248.89
|
$0
|
N/A
|
|
#6
|
$135.77
|
$0
|
N/A
|
$135.77
|
$0
|
N/A
|
|
#7
|
$294.13
|
$0
|
N/A
|
$294.13
|
$0
|
N/A
|
|
#8
|
$90.48
|
$0
|
N/A
|
$90.48
|
$0
|
N/A
|
|
#9
|
$113.13
|
$0
|
N/A
|
$113.13
|
$0
|
N/A
|
|
#10
|
$203.61
|
$0
|
N/A
|
$203.61
|
$0
|
N/A
|
|
#11
|
$158.38
|
$0
|
N/A
|
$158.38
|
$0
|
N/A
|
Final
Determination
Date
|
$226.25
|
$0
|
N/A
|
$407.25
|
$0.2188*
|
N/A
|
Payment at
Maturity
|
$5.00
|
$10.2188
|
* The final contingent quarterly payment, if
any, will be paid at maturity.
Examples 3 and 4 illustrate the payment at maturity
per security based on the final share price.
|
|
§
|
In
Example 3
, the closing price of the underlying stock remains below the downside threshold
level throughout the term of the securities. As a result, you do not receive any contingent payments during the term of the securities
and, at maturity, you are fully exposed to the decline in the closing price of the underlying stock. As the final share price is
less than the downside threshold level, investors will receive a number of shares of the underlying stock multiplied by the exchange
ratio or the cash value thereof, calculated as follows:
|
the cash value of 0.02210
shares of the underlying stock = the exchange ratio
times
the final share price =
0.02210 x $213.16 = $5.00
In this example, the value of shares you
receive at maturity is significantly less than the stated principal amount.
Page 7
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
|
§
|
In
Example 4
, the closing price of the underlying stock decreases to a final share price
of $383.68. Although the final share price is less than the initial share price, because the final share price is still not less
than the downside threshold level, you receive the stated principal amount plus a contingent quarterly payment with respect to
the final determination date. Your payment at maturity is calculated as follows:
|
$10 + $0.2188
= $10.2188
In this example, although the final
share price represents approximately a 10% decline from the initial share price, you receive the stated principal amount per security
plus the contingent quarterly payment, equal to a total payment of $10.2188 per security at maturity.
Page 8
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
Risk Factors
An investment in the Securities involves significant risks.
We also urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Securities. Investing
in the Securities is not equivalent to investing directly in the common stock of Apple Inc. The following is a non-exhaustive list
of certain key risk factors for investors in the Securities. For further discussion of these and other risks, you should
read the sections entitled “Risk Factors” in 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 Are Not Characterized as Being Fully Principal Protected or Are Characterized
as Being Partially Protected or Contingently Protected”;
|
|
|
·
|
“Risk Factors—Additional Risks
Relating to Notes Which Pay No Interest”;
|
|
|
·
|
“Risk Factors—Additional Risks
Relating to Securities with a Barrier Percentage or a Barrier Level”;
|
|
|
·
|
“Risk Factors—Additional Risks
Relating to Securities Which We May Call or Redeem (Automatically or Otherwise)”; 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.”
|
|
|
§
|
The securities do not guarantee the return of any principal.
The terms of the securities
differ from those of ordinary debt securities in that the securities do not guarantee the payment of regular interest or the return
of any of the principal amount at maturity. Instead, if the securities have not been automatically redeemed prior to maturity and
if the final share price is less than the downside threshold level, you will be exposed to the decline in the closing price of
the underlying stock, as compared to the initial share price, on a 1 to 1 basis and you will receive for each security that you
hold at maturity a number of shares of the underlying stock multiplied by the exchange ratio (or, at our option, the cash value
of such shares). The value of those shares (or that cash) will be less than 75% of the stated principal amount and could be zero.
|
|
|
§
|
The contingent quarterly payment is based solely on the determination closing price or the
final share price, as applicable.
Whether the contingent quarterly payment will be made with respect to a determination date
will be based on the determination closing price or the final share price, as applicable. As a result, you will not know whether
you will receive the contingent quarterly payment until the related determination date. Moreover, because the contingent quarterly
payment is based solely on the determination closing price on a specific determination date or the final share price, as applicable,
if such determination closing price or final share price is less than the downside threshold level, you will not receive any contingent
quarterly payment with respect to such determination date, even if the closing price of the underlying stock was higher on other
days during the term of the securities.
|
|
|
§
|
You will not receive any contingent quarterly payment for any quarterly period where the determination
closing price is less than the downside threshold level.
A contingent quarterly payment will be made with respect to a quarterly
period only if the determination closing price is greater than or equal to the downside threshold level. If the determination closing
price remains below the downside threshold level on each determination date over the term of the securities, you will not receive
any contingent quarterly payments.
|
|
|
§
|
Investors will not participate in any appreciation in the price of the underlying stock.
Investors
will not participate in any appreciation in the price of the underlying stock from the initial share price, and the return on the
securities will be limited to the contingent quarterly payment that is paid with respect to each determination date on which the
determination closing price or the final share price, as applicable, is greater than or equal to the downside threshold level.
It is possible that the closing price of the underlying stock could be below the downside threshold level on most or all of the
determination dates so that you will receive little or no contingent quarterly payments. If you do not earn sufficient contingent
quarterly payments over the term of the securities, the overall return on the securities may be less than the amount that would
be paid on a conventional debt security of the issuer of comparable maturity.
|
|
|
§
|
Contingent repayment of principal applies only at maturity
.
You should be willing to
hold the securities to maturity.
If you sell the securities prior to maturity in the secondary market, if any, you may have
to sell the securities at a loss relative to your initial investment even if the price of the underlying stock is above the downside
threshold level.
|
|
|
§
|
Early
redemption
risk.
The
term of
your investment
in the
securities
may be
limited
to as short
as approximately
three months
by the
automatic
early redemption
feature
of the
securities.
If the
securities
are redeemed
prior to
maturity,
you will
receive
no more
contingent
quarterly
payments
and may
be forced
to invest
in a lower
interest
rate environment.
There is
no guarantee
that
|
Page 9
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
|
|
you would be able to reinvest the proceeds from an investment in the securities in a comparable investment with a similar level
of risk in the event the securities are called prior to the maturity date.
|
|
|
§
|
Market
price
influenced
by
many
unpredictable
factors
.
Several
factors
will
influence
the
value
of
the
securities
in
the
secondary
market
and
the
price
at
which
Barclays
Bank
PLC
may
be
willing
to
purchase
or
sell
the
securities
in
the
secondary
market.
Although
we
expect
that
generally
the
closing
price
of
the
underlying
stock
on
any
day
will
affect
the
value
of
the
securities
more
than
any
other
single
factor,
other
factors
that
may
influence
the
value
of
the
securities
include:
|
|
|
o
|
the trading price and volatility (frequency and magnitude of changes in value) of the underlying
stock,
|
|
|
o
|
whether the determination closing price has been below the downside threshold level on any determination
date,
|
|
|
o
|
dividend rates on the underlying stock,
|
|
|
o
|
interest and yield rates in the market,
|
|
|
o
|
time remaining until the securities mature,
|
|
|
o
|
geopolitical conditions and economic, financial, political, regulatory or judicial events that
affect the underlying stock and which may affect the final share price of the underlying stock,
|
|
|
o
|
the occurrence of certain events affecting the underlying stock that may or may not require an
adjustment of the initial share price or other variables, and
|
|
|
o
|
any actual or anticipated changes in our credit ratings or credit spreads.
|
The price of the underlying stock
may be, and has recently been, volatile, and we can give you no assurance that the volatility will lessen. See “Apple Inc.
Overview” below. You may receive less, and possibly significantly less, than the stated principal amount per security if
you try to sell your securities prior to maturity.
|
|
§
|
The securities are subject to the credit risk of the Issuer, Barclays Bank PLC.
The securities
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 securities depends on the ability of Barclays Bank PLC to satisfy its obligations
as they come due and are not guaranteed by a third party. As a result, the actual and perceived creditworthiness of Barclays Bank
PLC may affect the market value of the securities and, in the event Barclays Bank PLC were to default on its obligations, you may
not receive the amounts owed to you under the terms of the securities.
|
|
|
§
|
Investing
in
the
securities
is
not
equivalent
to
investing
in
the
common
stock
of
Apple
Inc..
Investors
in
the
securities
will
not
own
the
underlying
stock
or
have
voting
rights
or
rights
to
receive
dividends
or
other
distributions
or
any
other
rights
with
respect
to
the
underlying
stock.
|
|
|
§
|
No affiliation with Apple Inc..
Apple Inc.
is not an
affiliate of ours, is not involved with this offering in any way, and has no obligation to consider your interests in taking any
corporate actions that might affect the value of the securities. We have not made any due diligence inquiry with respect to
Apple
Inc.
in connection with this offering.
|
|
|
§
|
Single equity risk.
The price of the underlying stock can rise or fall sharply due to factors
specific to the underlying stock and its issuer, such as stock price volatility, earnings, financial conditions, corporate, industry
and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general
stock market volatility and levels, interest rates and economic and political conditions. We urge you to review financial and other
information filed periodically with the SEC by the issuer of the underlying stock.
|
|
|
§
|
We may engage in business with or involving Apple Inc. without regard to your interests.
We
or our affiliates may presently or from time to time engage in business with
Apple Inc.
without
regard to your interests and thus may acquire non-public information about
Apple Inc..
Neither
we nor any of our affiliates undertakes to disclose any such information to you. In addition, we or our affiliates from time to
time have published and in the future may publish research reports with respect to
Apple Inc.
,
which may or may not recommend that investors buy or hold the underlying stock.
|
|
|
§
|
The antidilution adjustments the calculation agent is required to make do not cover every corporate
event that could affect the underlying stock.
Barclays Bank PLC, as calculation agent, will adjust the amount payable at maturity
for certain corporate events affecting the underlying stock, such as stock splits and stock dividends, and certain other corporate
actions involving the issuer of the underlying stock, such as mergers. However, the calculation agent will not make an adjustment
for
|
Page 10
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
|
|
every corporate event that can affect the underlying stock. For example, the calculation agent is not required to make any
adjustments if the issuer of the underlying stock or anyone else makes a partial tender or partial exchange offer for the underlying
stock, nor will adjustments be made following the final determination date. If an event occurs that does not require the calculation
agent to adjust the amount payable at maturity, the market price of the securities may be materially and adversely affected.
|
|
|
§
|
The securities will not be listed on any securities exchange and secondary trading may be limited.
There may be little or no secondary market for the securities. We do not intend to list the securities on any securities exchange.
Barclays Capital Inc. and other affiliates of Barclays Bank PLC intend to offer to purchase the securities in the secondary market
but are not required to do so and may cease any such market making activities at any time. Even if a secondary market develops,
it may not provide enough liquidity to allow you to trade or sell the securities easily. Because other dealers are not likely to
make a secondary market for the securities, the price, if any, at which you may be able to trade your securities 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 securities.
Accordingly, you should be willing to hold your securities to maturity.
|
|
|
§
|
Hedging and trading activity by the calculation agent and its affiliates could potentially
affect the value of the securities.
Hedging or trading activities of the issuer’s affiliates and of any other hedging
counterparty with respect to the securities on or prior to the pricing date and prior to maturity could adversely affect the value
of the underlying stock and, as a result, could decrease the amount an investor may receive on the securities at maturity. Any
of these hedging or trading activities on or prior to the pricing date could potentially increase the initial share price and,
as a result, the downside threshold level which is the price at or above which the underlying stock must close on each determination
date in order for you to earn a contingent quarterly payment or, if the securities are not called prior to maturity, in order for
you to avoid being exposed to the negative price performance of the underlying stock at maturity. Additionally, such hedging or
trading activities during the term of the securities could potentially affect the price of the underlying stock on the determination
dates and, accordingly, whether the securities are automatically called prior to maturity and, if the securities are not called
prior to maturity, the payout to you at maturity.
|
|
|
§
|
The calculation agent will make determinations with respect to the securities.
As calculation
agent, Barclays Bank PLC will determine the initial share price, the downside threshold level, the final share price, whether the
contingent quarterly payment will be paid on each contingent payment date, whether the securities will be redeemed following any
determination date, whether a market disruption event has occurred, whether to make any adjustments to the initial share price
or other variables and the payment that you will receive upon an automatic early redemption or at maturity, if any. Determinations
made by Barclays Bank PLC, in its capacity as calculation agent, including with respect to the occurrence or nonoccurrence of market
disruption events, may affect the payout to you upon an automatic early redemption or at maturity.
|
|
|
§
|
Higher contingent quarterly payments are generally associated with a greater
risk of loss.
Greater expected volatility with respect to the underlying stock reflects
a higher expectation as of the pricing date that the price of the underlying stock could close below the downside threshold level
on the valuation date of the securities. This greater expected risk will generally be reflected in a higher contingent quarterly
payment for that security. However, while the
contingent quarterly payment is
set on the pricing
date, the underlying stock’s volatility may change significantly over the term of the securities. The price of the underlying
stock for your securities could fall sharply, which could result in a significant loss of principal.
|
|
|
§
|
Suitability of the securities for investment
. You should reach a decision to invest in
the securities after carefully considering, with your advisors, the suitability of the securities in light of your investment objectives
and the specific information set out in this pricing supplement, the prospectus supplement, and the prospectus. Neither the Issuer
nor Barclays Capital Inc. makes any recommendation as to the suitability of the securities for investment.
|
|
|
§
|
In some circumstances, the payment you receive on the securities may be based on the stock
of another company and not the underlying stock
. Following certain corporate events relating to the issuer of the underlying
stock where the issuer is not the surviving entity, your return on the securities paid by Barclays Bank PLC may be based on the
shares of a successor to the respective underlying stock issuer or any cash or any other assets distributed to holders of the underlying
stock in such corporate event. The occurrence of these corporate events and the consequent adjustments may materially and adversely
affect the value of the securities. For more information, see the section “Reference Assets—Equity Securities—Share
Adjustments Relating to Securities with an Equity Security as the Reference Asset” of the prospectus supplement.
|
|
|
§
|
The U.S. federal income tax treatment of an investment in the securities is uncertain
.
The U.S. federal income tax treatment of the securities is uncertain and the Internal Revenue Service could assert that the securities
should be taxed in a manner that is different than described below. As discussed further in the accompanying prospectus supplement,
the Internal
|
Page 11
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
|
|
Revenue Service issued a notice in 2007 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 securities at a rate that may
exceed the contingent quarterly payments (if any) that you receive on the securities and whether all or part of the gain you may
recognize upon the sale, exchange, early redemption or maturity of an instrument such as the securities should be treated as ordinary
income. Similarly, the Internal Revenue Service and the Treasury Department have current projects open with regard to the tax treatment
of pre-paid forward contracts and contingent notional principal contracts. While it is impossible to anticipate how any ultimate
guidance would affect the tax treatment of instruments such as the securities (and while any such guidance may be issued on a prospective
basis only), such guidance could be applied retroactively and could in any case (i) increase the likelihood that you will be required
to accrue income in respect of the securities even if you do not receive any payments with respect to the securities until early
redemption or maturity and (ii) require you to accrue income in respect of the securities in excess of any contingent quarterly
payments you receive on the securities. The outcome of this process is uncertain. In addition, any character mismatch arising from
your inclusion of ordinary income in respect of the contingent quarterly payments and capital loss (if any) upon the sale, exchange,
early redemption or maturity of your securities may result in adverse tax consequences to you because an investor’s ability to
deduct capital losses is subject to significant limitations. You should consult your tax advisor as to the possible alternative
treatments in respect of the securities.
|
|
|
§
|
The estimated value of your securities might be lower if such estimated value were based on
the levels as which our debt securities trade in the secondary market.
The estimated value of your securities on the pricing
date is based on a number of variables, including our internal funding rates. Our internal funding rates may vary from the levels
at which our benchmark debt securities trade in the secondary market. As a result of this difference, the estimated value referenced
above may be lower if such estimated value was based on the levels at which our benchmark debt securities trade in the secondary
market.
|
|
|
§
|
The estimated value of your securities is lower than the initial issue price of your securities
.
The estimated value of your securities on the pricing date is lower, and may be significantly lower, than the initial issue price
of your securities. The difference between the initial issue price of your securities and the estimated value of the securities
is a result of certain factors, such as any sales commissions to be paid to Barclays Capital Inc. or another affiliate of ours,
any selling concessions, discounts, commissions or fees to be allowed or paid to non-affiliated intermediaries, the estimated profit
that we or any of our affiliates expect to earn in connection with structuring the securities, the estimated cost which we may
incur in hedging our obligations under the securities, and expected development and other costs which we may incur in connection
with the securities.
|
|
|
§
|
The estimated value of the securities is based on our internal pricing models, which may prove
to be inaccurate and may be different from the pricing models of other financial institutions.
The estimated value of your
securities on the pricing date is based on our internal pricing models, which take into account a number of variables and are based
on a number of subjective assumptions, which may or may not materialize. These variables and assumptions are not evaluated or verified
on an independent basis. Further, our pricing models may be different from other financial institutions’ pricing models and
the methodologies used by us to estimate the value of the securities may not be consistent with those of other financial institutions
which may be purchasers or sellers of securities in the secondary market. As a result, the secondary market price of your securities
may be materially different from the estimated value of the securities determined by reference to our internal pricing models.
|
|
|
§
|
The estimated value of your securities is not a prediction of the prices at which you may sell
your securities in the secondary market, if any, and such secondary market prices, if any, will likely be lower than the initial
issue price of your securities and may be lower than the estimated value of your securities.
The estimated value of the securities
will not be a prediction of the prices at which Barclays Capital Inc., other affiliates of ours or third parties may be willing
to purchase the securities from you in secondary market transactions (if they are willing to
purchase, which they are not
obligated to do). The price at which you may be able to sell your securities in the secondary market at any time will be influenced
by many factors that cannot be predicted, such as market conditions, and any bid and ask spread for similar sized trades,
and
may be substantially less than our estimated value of the securities. Further, as secondary market prices of your securities take
into account the levels at which our debt securities trade in the secondary market, and do not take into account our various costs
related to the securities such as fees, commissions, discounts, and the costs of hedging our obligations under the securities,
secondary market prices of your securities will likely be lower than the initial issue price of your securities. As a result, the
price, at which Barclays Capital Inc., other affiliates of ours or third parties may be willing to purchase the securities from
you in secondary market transactions, if any, will likely be lower than the price you paid for your securities, and any sale prior
to the maturity date could result in a substantial loss to you.
|
Page 12
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
|
§
|
The temporary price at which we may initially buy the securities in the secondary market and
the value we may initially use for customer account statements, if we provide any customer account statements at all, may not be
indicative of future prices of your securities.
Assuming that all relevant factors remain constant after the pricing date,
the price at which Barclays Capital Inc. may initially buy or sell the securities in the secondary market (if Barclays Capital
Inc. makes a market in the securities, which it is not obligated to do) and the value that we may initially use for customer account
statements, if we provide any customer account statements at all, may exceed our estimated value of the securities on the pricing
date, as well as the secondary market value of the securities, for a temporary period after the initial issue date of the securities.
The price at which Barclays Capital Inc. may initially buy or sell the securities in the secondary market and the value that we
may initially use for customer account statements may not be indicative of future prices of your securities.
|
|
|
§
|
We and our affiliates may engage in various activities or make determinations that could materially
affect your securities in various ways and create conflicts of interest.
We and our affiliates establish the offering price
of the securities for initial sale to the public, and the offering price is not based upon any independent verification or valuation.
Additionally, the role played by Barclays Capital Inc., as a dealer in the securities, could present it with significant conflicts
of interest with the role of Barclays Bank PLC, as issuer of the securities. For example, Barclays Capital Inc. or its representatives
may derive compensation or financial benefit from the distribution of the securities and such compensation or financial benefit
may serve as an incentive to sell these securities instead of other investments. We may pay dealer compensation to any of our affiliates
acting as agents or dealers in connection with the distribution of the securities. Furthermore, we and our affiliates make markets
in and trade various financial instruments or products for their own accounts and for the account of their clients and otherwise
provide investment banking and other financial services with respect to these financial instruments and products. These financial
instruments and products may include securities, instruments or assets that may serve as the underliers, basket underliers or constituents
of the underliers of the securities. Such market making, trading activities, other investment banking and financial services may
negatively impact the value of the securities. Furthermore, in any such market making, trading activities, and other services,
we or our affiliates may take positions or take actions that are inconsistent with, or adverse to, the investment objectives of
the holders of the securities. We and our affiliates have no obligation to take the needs of any buyer, seller or holder of the
securities into account in conducting these activities.
|
Page 13
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
Apple Inc. Overview
According to publicly available
information, Apple Inc. and its subsidiaries (collectively, the “Company”) design, manufacture and market mobile communication
and media devices, personal computers, and portable digital music players, and sell a variety of related software, services, peripherals,
networking solutions, and third-party digital content and applications. The Company sells its products through its retail and online
stores, as well as through its direct sales force and third-party cellular network carries, wholesalers and retailers.
Information filed by the Company
with the SEC under the Exchange Act can be located by reference to its SEC file number: 000-10030, or its CIK Code: 0000320193.
The Company’s common stock is listed on the NASDAQ Global Select Market under the ticker symbol “AAPL”.
You are urged to read the following
section in the accompanying prospectus supplement: “Reference Assets—Equity Securities—Reference Asset Issuer
and Reference Asset Information”. Companies with securities registered under the Securities Exchange Act of 1934, as amended,
which is commonly referred to as the “Exchange Act”, and the Investment Company Act of 1940, as amended, which is commonly
referred to as the “’40 Act”, are required to periodically file certain financial and other information specified
by the SEC. Information provided to or filed with the SEC electronically can be accessed through a website maintained by the SEC.
The address of the SEC’s website is http://www.sec.gov. Information provided to or filed with the SEC pursuant to the Exchange
Act or the ’40 Act by the company issuing the underlying stock can be located by reference to the underlying stock SEC file
number specified below.
The summary
information above regarding the Company comes from the Company’s SEC filings. You are urged to refer to the SEC filings made
by the Company and to other publicly available information (such as the Company’s annual report) to obtain an understanding
of the Company’s business and financial prospects. The summary information contained above is not designed to be, and should
not be interpreted as, an effort to present information regarding the financial prospects of any issuer or any trends, events or
other factors that may have a positive or negative influence on those prospects or as an endorsement of any particular issuer.
Information from outside sources is not incorporated by reference
in, and should not be considered part of, this pricing supplement or any accompanying prospectus or prospectus supplement. We have
not independently verified the accuracy or completeness of the information obtained from outside sources.
Information as of market close
on July 31, 2013:
|
Bloomberg Ticker Symbol:
|
AAPL
|
52 Week High (on 09/19/2012):
|
$702.10
|
|
Current Stock Price:
|
$452.50
|
52 Week Low (on 04/19/2013):
|
$390.50
|
|
52 Weeks Ago:
|
$610.76
|
|
|
The following table sets forth the published
high, low and period end closing prices of the underlying stock for each quarter in the same period for the period of January 3,
2007 through July 31, 2013. The associated graph shows the closing prices of the underlying stock for each day in the same period.
The closing price of the underlying stock on June 31, 2013 was $452.50. We obtained the information in the table and graph below
from Bloomberg Financial Markets, without independent verification. The historical performance of the underlying stock should not
be taken as an indication of its future performance, and no assurance can be given as to the price of the underlying stock at any
time, including the determination dates.
|
Shares of Apple Inc.
|
High ($)
|
Low ($)
|
Period End ($)
|
|
2007
|
|
|
|
|
First Quarter
|
97.13
|
83.27
|
92.91
|
|
Second Quarter
|
125.09
|
90.24
|
122.04
|
|
Third Quarter
|
154.50
|
117.05
|
153.54
|
|
Fourth Quarter
|
199.83
|
153.76
|
198.08
|
|
2008
|
|
|
|
|
First Quarter
|
194.97
|
119.15
|
143.50
|
|
Second Quarter
|
189.96
|
147.14
|
167.44
|
|
Third Quarter
|
179.69
|
105.26
|
113.66
|
|
Fourth Quarter
|
111.04
|
80.49
|
85.35
|
|
2009
|
|
|
|
Page 14
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
|
Shares of Apple Inc.
|
High ($)
|
Low ($)
|
Period End ($)
|
|
First Quarter
|
109.87
|
78.20
|
105.12
|
|
Second Quarter
|
144.67
|
108.69
|
142.43
|
|
Third Quarter
|
186.15
|
135.40
|
185.37
|
|
Fourth Quarter
|
211.64
|
180.76
|
210.86
|
|
2010
|
|
|
|
|
First Quarter
|
235.83
|
192.00
|
234.93
|
|
Second Quarter
|
274.16
|
235.86
|
251.53
|
|
Third Quarter
|
292.46
|
240.16
|
283.75
|
|
Fourth Quarter
|
325.47
|
278.64
|
322.56
|
|
2011
|
|
|
|
|
First Quarter
|
363.13
|
326.72
|
348.45
|
|
Second Quarter
|
353.10
|
315.32
|
335.67
|
|
Third Quarter
|
413.45
|
343.23
|
413.45
|
|
Fourth Quarter
|
422.24
|
363.50
|
405.00
|
|
2012
|
|
|
|
|
First Quarter
|
617.62
|
411.23
|
599.47
|
|
Second Quarter
|
636.23
|
530.12
|
584.00
|
|
Third Quarter
|
702.10
|
574.88
|
667.26
|
|
Fourth Quarter
|
671.74
|
508.97
|
509.41
|
|
2013
|
|
|
|
|
First Quarter
|
549.03
|
420.05
|
442.63
|
|
Second Quarter
|
463.84
|
390.50
|
396.08
|
|
Third Quarter (through July 31, 2013)
|
453.32
|
409.22
|
452.50
|
PAST PERFORMANCE IS NOT INDICATIVE OF
FUTURE RESULTS
Apple Inc. common stock – Daily Closing Prices
January 3, 2007 to July 31, 2013
|
|
|
|
PAST PERFORMANCE IS NOT INDICATIVE
OF FUTURE RESULTS.
Page 15
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
We obtained the historical trading
price information set forth above from Bloomberg, L.P., without independent verification. The historical performance of the underlying
stock should not be taken as an indication of the future performance of the underlying stock during the term of the Securities.
Additional Information About the Securities
Please read this information in conjunction with the summary terms
on the front cover of this document.
|
Additional Provisions:
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Record date:
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One business day prior to the related contingent payment date.
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No fractional shares:
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At maturity, if the payment on the securities, if any, is to be made in shares of the underlying stock, we will deliver the number of shares of the underlying stock due with respect to the securities, as described above, but we will pay cash in lieu of delivering any fractional share of the underlying stock in an amount equal to the corresponding fractional closing price of such fraction of a share of the underlying stock, as determined by the calculation agent as of the final determination date.
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Postponement of maturity date and contingent payment dates:
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The maturity date and any contingent payment date will be postponed if the final relevant determination date is postponed due to the occurrence or continuance of a market disruption event with respect to the underlying stock on such relevant determination date. In such a case, the contingent payment date or maturity date, as the case may be, will be postponed by the same number of business days from but excluding the originally scheduled determination date; provided that the relevant determination date may not be postponed to a date later than the originally scheduled contingent payment date or maturity date, as the case may be, or if the originally scheduled contingent payment date or maturity date, as the case may be, is not a business day, later than the first business day after the originally scheduled contingent payment date or maturity date, as the case may be. See “Terms of the Notes — Maturity Date” and “Reference Assets—Equity Securities—Market Disruption Events Relating to Securities with an Equity Security as the Reference Asset” in the accompanying prospectus supplement.
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Market disruption events and antidilution adjustments:
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The calculation agent may adjust any variable
described in this pricing supplement, including but not limited to the final determination date, the initial share price, the final
share price, the physical delivery amount and any combination thereof as described in the following sections of the accompanying
prospectus supplement.
·
For a description of what constitutes a market disruption event and
the consequences thereof, see “Reference Assets—Equity Securities—Market Disruption Events Relating to Securities
with an Equity Security as the Reference Asset”; and
·
For a description of further adjustments that may affect the linked
share, see “Reference Assets—Equity Securities—Share Adjustments Relating to Securities with an Equity Security
as the Reference Asset”.
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Listing:
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The securities will not be listed on any securities exchange.
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Minimum ticketing size:
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100 securities
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Tax considerations:
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The material tax consequences of your investment in the securities
are summarized below. The discussion below supplements the discussion under “Certain U.S. Federal Income Tax Considerations”
in the accompanying prospectus supplement. Except as noted under “Non-U.S. Holders” below, this section applies to
you only if you are a U.S. holder (as defined in the accompanying prospectus supplement) and you hold your securities 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 securities in the initial
issuance of the securities). In addition, this discussion does not apply to you if you purchase your securities for less than the
principal amount of the securities.
The U.S. federal income tax consequences of your investment in
the securities are uncertain and the Internal Revenue Service could assert that the securities should be taxed in a manner that
is different than described below. Pursuant to the terms of the securities, 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 securities as a contingent income-bearing
derivative contract with respect to the underlying stock.
If your securities are properly treated as a contingent income-bearing
derivative contract, it would be reasonable (i) to treat any contingent quarterly payments you receive on the securities as items
of ordinary income taxable in accordance with your regular method of accounting for U.S.
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Page 16
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
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federal income tax purposes and (ii) to
recognize capital gain or loss upon the sale, exchange, early redemption or maturity of your securities (subject to the discussion
below regarding the receipt of shares of the underlying stock at maturity) in an amount equal to the difference (if any) between
the amount you receive at such time and your basis in the securities for U.S. federal income tax purposes. Except as described
below, such gain or loss should generally be long-term capital gain or loss if you have held your securities
for more than one year, and otherwise should generally be short-term capital gain or loss. Short-term capital gains are generally
subject to tax at the marginal tax rates applicable to ordinary income. In addition, it is possible that you should recognize ordinary
income upon the sale of your securities to the extent of the portion of the sale proceeds that relates to accrued contingent quarterly
payments that you have not yet included in ordinary income. Any character mismatch arising from your inclusion of ordinary income
in respect of the contingent quarterly payments and capital loss (if any) upon the sale, exchange, early redemption or maturity
of your securities may result in adverse tax consequences to you because an investor’s ability to deduct capital losses is subject
to significant limitations. Moreover, in the event you receive shares of the underlying stock upon the maturity of the securities,
such loss may be deferred (as described in the following paragraph).
If you receive shares of the underlying stock upon the maturity
of your securities, it is not clear whether the receipt of shares of the underlying stock should be treated as (i) a taxable settlement
of the securities followed by a purchase of the shares or (ii) a tax-free purchase of the shares pursuant to the original terms
of the securities. Accordingly, you should consult your tax advisor about the tax consequences to you of receiving shares of the
underlying stock upon the maturity of your securities. If the receipt of the shares is treated as a taxable settlement of the securities
followed by a purchase of the shares, you should (i) recognize capital loss in an amount equal to the difference between the fair
market value of the shares you receive at such time plus the cash received in lieu of a fractional share, if any, and your tax
basis in the securities, and (ii) take a basis in such shares in an amount equal to their fair market value at such time. If, alternatively,
the receipt of shares of the underlying stock upon the maturity of your securities is treated as a tax-free purchase of the shares,
(i) the receipt of shares of the underlying stock upon maturity of your securities should not give rise to the current recognition
of loss at such time, (ii) you should take a carryover basis in such shares equal to the basis you had in your securities (determined
as described below, less the basis attributable to a fractional share, if any), and (iii) if you receive cash in lieu of a fractional
share upon the stock settlement of such securities, you should recognize short-term capital loss equal to the difference between
the amount of cash you receive and your tax basis in the fractional share. In general, your tax basis in your securities will be
equal to the price you paid for the securities. Your holding period in the shares you receive upon the maturity of your securities
will begin on the day after you receive such shares.
In the opinion of our special tax counsel, Sullivan & Cromwell
LLP, it would be reasonable to treat your securities in the manner described above. This opinion assumes that the description of
the terms of the securities in this pricing supplement is materially correct.
NO STATUTORY, JUDICIAL OR ADMINISTRATIVE AUTHORITY DIRECTLY DISCUSSES
HOW YOUR SECURITIES SHOULD BE TREATED FOR U.S. FEDERAL INCOME TAX PURPOSES. AS A RESULT, THE U.S. FEDERAL INCOME TAX CONSEQUENCES
OF YOUR INVESTMENT IN THE SECURITIES ARE UNCERTAIN. ACCORDINGLY, WE URGE YOU TO CONSULT YOUR TAX ADVISOR AS TO THE TAX CONSEQUENCES
OF INVESTING IN THE SECURITIES.
Alternative Treatments
. 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 securities, possibly with retroactive effect. Other alternative treatments for your securities
may also be possible under current law. For example, it is possible that the securities could be treated as a debt instrument that
is subject to the special tax rules governing contingent payment debt instruments. Under the contingent payment debt instrument
rules, you generally would be required to accrue interest on a current basis in respect of the securities over their term based
on the comparable yield and projected payment schedule for the securities and pay tax accordingly, even though these amounts may
exceed the contingent quarterly payments (if any) that are made on the securities. You would also be required to make adjustments
to your accruals if the actual amounts that you receive in any taxable year differ from the amounts shown on the projected payment
schedule. In addition, any gain you may recognize on the sale, exchange, early redemption or maturity of the securities would be
taxed as ordinary interest income and any loss you may recognize on the sale, exchange, early redemption or maturity of the securities
would generally be ordinary loss to the extent of the interest you previously included as income without an offsetting negative
adjustment and thereafter would be capital loss. You should consult your tax advisor as to the special rules that govern contingent
payment debt instruments.
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Page 17
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
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It is also possible that your securities could be treated as an
investment unit consisting of (i) a debt instrument that is issued to you by us and (ii) a put option in respect of the underlying
stock that is issued by you to us. You should consult your tax advisor as to the possible consequences of this alternative treatment.
You should consult your tax advisor with respect to these possible
alternative treatments.
For a further discussion of the tax treatment of your securities
and the contingent quarterly payments to be made on the securities 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 Derivative Contracts” in the accompanying prospectus supplement. You should consult your tax advisor as to the
possible alternative treatments in respect of the securities. For additional, important considerations related to tax risks associated
with investing in the securities, you should also examine the discussion in “Risk Considerations—The U.S. federal income
tax treatment of an investment in the securities is uncertain”, in this pricing supplement.
Non-U.S. Holders
. Barclays currently does not withhold
on payments to non-U.S. holders. However, if Barclays determines that there is a material risk that it will be required to withhold
on any such payments, Barclays may withhold on any contingent quarterly payments at a 30% rate, unless you have provided to Barclays
(i) a valid Internal Revenue Service Form W-8ECI or (ii) a valid Internal Revenue Service Form W-8BEN claiming tax treaty benefits
that reduce or eliminate withholding. If Barclays elects to withhold and you have provided Barclays with a valid Internal Revenue
Service Form W-8BEN claiming tax treaty benefits that reduce or eliminate withholding, Barclays may nevertheless withhold up to
30% on any contingent quarterly payments it makes to you if there is any possible characterization of the contingent quarterly
payments that would not be exempt from withholding under the treaty. Non-U.S. holders will also be subject to the general rules
regarding information reporting and backup withholding as described under the heading “Certain U.S. Federal Income Tax Considerations—Information
Reporting and Backup Withholding” in the accompanying prospectus supplement.
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Trustee:
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The Bank of New York Mellon
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Calculation agent:
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Barclays Bank PLC
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Use of proceeds and hedging:
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The net proceeds we receive from the sale of the securities will
be used for various corporate purposes as set forth in the prospectus and prospectus supplement and, in part, in connection with
hedging our obligations under the securities through one or more of our subsidiaries.
We, through our subsidiaries or others, expect to hedge our anticipated
exposure in connection with the securities by taking positions in futures and options contracts on the underlying stock and any
other securities or instruments we may wish to use in connection with such hedging. Trading and other transactions
by us or our affiliates could affect the level, value or price of reference assets and their components, the market value of the
securities or any amounts payable on the securities. For further information on our use of proceeds and hedging, see “Use
of Proceeds and Hedging” in the prospectus supplement.
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ERISA:
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See “Employee Retirement Income Security Act” starting on page S-120 in the accompanying prospectus supplement.
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Contact:
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Morgan Stanley Smith Barney LLC (“Morgan Stanley Wealth Management” (“MSWM”)) clients may contact their MSWM sales representative or MSWM’s principal executive offices at 2000 Westchester Avenue, Purchase, New York 10577 (telephone number 800-869-3326). A copy of each of these documents may be obtained from Barclays Bank PLC or the agent Barclays, at 1-888-227-2275 (Extension 2-3430) or 745 Seventh Avenue—Attn: US InvSol Support, New York, NY 10019.
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This pricing supplement represents a summary of the terms and
conditions of the securities. We encourage you to read the accompanying prospectus and prospectus supplement for this
offering, which can be accessed via the hyperlinks on the cover page of this document.
Supplemental Plan of Distribution
MSSB and
its financial advisors will collectively receive from the Agent, Barclays Capital Inc., a fixed sales commission of $0.225
for each security they sell. We expect that delivery of the securities
will be made against payment for the securities on or about the issue
Page 18
Contingent
Income Auto-Callable Securities due August 4, 2016
Based on the Performance of
the Common Stock of Apple Inc.
date indicated on the cover of this pricing supplement, which
will be the third business day following the expected pricing date (this settlement cycle being referred to as “T+3”).
See “Plan of Distribution” in the prospectus supplement.
Page 19
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