Principal Protected Notes
BNP Paribas Step-Over Bonds, Series 2
Product Summary
| Inception Date | July 20, 2004 |
| Maturity Date | December 28, 2012 |
| Offering Price | $100.00 |
| Guarantee Amount | $...... |
| Market Price Per Note | $...... |
| Index Level† | ...... |
| Total Distributions | $...... |
The ONE Financial BNP Paribas Step-Over™ Bonds, Series 2 (the "Bonds") are an exciting new principal guaranteed investment designed to provide conservative investors with an attractive alternative to GICs and other traditional income investments. The Bonds provide a variable semi-annual interest rate payment based on the "Step-Over" interest rate mechanism. On each semiannual coupon payment date, investors can receive an interest payment of up to 5% (up to 10% annual income), with 100% principal guarantee at maturity.
- Issued by BNP Paribas S.A. (Canada) and guaranteed by its parent BNP Paribas S.A., one of the largest banks in the world (more than three times the size of Canada's largest bank)
- Guarantor is rated AA by S&P
- Up to 10% annual income plus 100% principal guarantee at Maturity (December 28th, 2012)
- Historical pro-forma average annual income of 8.8% per year for all 8.5-year rolling periods between Jan/93 and Mar/04
- Unique opportunity for superior income potential versus investments of similar duration and quality
- No need to wait until Maturity to ascertain profits; semi-annual coupon payments allow investors to lock in profits every six months on a basket of 50 of the world's largest companies
- 100% RRSP, RRIF, RESP, and DPSP eligible as Canadian property
- Initial Offering Period: until July 15th, 2004 (the "Closing Date")
Investment Details
| Style | Variable Income / Principal-Guaranteed |
| Underlying investment | 50 of the world's largest companies |
| Stock selection | Initially Dow Jones Global Titans 50 Index |
| Guarantor | BNP Paribas S.A. (Rated AA by S&P) |
| Administrator | ONE Financial |
| Coupon dates | June 30 & Dec. 30 |
| Liquidity | Weekly |
| RSP eligibility | 100% (Canadian content) |
| Performance | as at June 30, 2009 |
| Returns | as at June 30, 2009 |
| 1 Month | -1.55% |
| 3 Months | -4.61% |
| 6 Months | -8.04% |
| Year-to-date | -8.04% |
| 1 Year | 0.74% |
| 3 Year (annualized) | 0.22% |
| Total Return since Inception | -12.59% |
| Total Coupon Payments | $7.9578 |
| Initial Price | $100.00 |
| Current Price | $79.45 |
| Current Index Level | 76.98 |
| Geographic Diversification | as at June 22, 2009 |
| Finland | 2.00% |
| France | 2.00% |
| Germany | 4.00% |
| Italy | 2.00% |
| Japan | 2.00% |
| Korea | 2.00% |
| Netherlands | 4.00% |
| Switzerland | 8.00% |
| U.K. | 16.00% |
| U.S. | 58.00% |
| Index Level† | as at June 22, 2009 |
| Underlying Holdings |
Initial price | Current Price | Component Index Level |
| Abbott Laboratories | 39.37 | 46.71 | 105.00 |
| American International Group Inc. | 68.78 | 1.39 | 2.02 |
| Altria Group Inc. | 36.61 | 16.35 | 44.66 |
| AstraZeneca Plc | 2,345.00 | 2,668.33 | 105.00 |
| Bank of America Corp. | 42.63 | 11.94 | 28.01 |
| Barclays Plc | 447.75 | 263.74 | 58.90 |
| Qualcomm Inc. | 20.50 | 44.40 | 105.00 |
| BP Plc | 494.50 | 477.52 | 96.57 |
| Chevron Texaco Corp | 47.39 | 65.76 | 105.00 |
| Cisco Systems Inc. | 21.90 | 18.41 | 84.06 |
| Citigroup Inc. | 44.05 | 3.00 | 6.81 |
| Coca-Cola Co. | 50.08 | 47.99 | 95.83 |
| Daimler Chrysler Ag | 36.12 | 24.35 | 67.41 |
| Dell Inc. | 36.00 | 12.98 | 36.06 |
| Walt Disney Co. | 23.90 | 22.66 | 94.81 |
| Eli Lilly & Co. | 64.72 | 33.22 | 51.33 |
| ENI SPA | 16.71 | 16.92 | 101.26 |
| Exxon Mobil Corp. | 45.90 | 68.84 | 105.00 |
| General Electric Co. | 33.21 | 11.52 | 34.69 |
| Glaxosmithkline Plc | 1,062.00 | 1,093.91 | 103.00 |
| Lloyds Banking Group | 1117.02 | 67.78 | 6.07 |
| HSBC Holdings Plc | 794.00 | 511.49 | 64.42 |
| International Business Machines Corp. | 86.36 | 104.52 | 105.00 |
| ING Groep NV | 18.25 | 7.01 | 38.41 |
| Intel Corp. | 23.27 | 15.68 | 67.38 |
| Johnson & Johnson | 56.31 | 55.49 | 98.54 |
| JP Morgan Chase & Co. | 36.40 | 32.87 | 90.30 |
| Merck & Co. | 44.83 | 25.18 | 56.17 |
| Microsoft Corp. | 25.49 | 23.28 | 91.34 |
| Morgan Stanley | 40.23 | 26.63 | 66.20 |
| Nestle SA | 33.20 | 40.18 | 105.00 |
| Nokia Oyj | 9.82 | 10.29 | 104.79 |
| Novartis Ag (Namen) | 55.70 | 44.84 | 80.50 |
| Pepsico Inc. | 51.66 | 53.49 | 103.54 |
| Pfizer Inc. | 32.33 | 14.79 | 45.75 |
| Proctor & Gamble Co. | 54.50 | 50.56 | 92.77 |
| Royal Bank of Scotland Group Plc | 512.00 | 35.92 | 7.02 |
| Roche Holding Ag (DRC) | 127.00 | 143.50 | 105.00 |
| Royal Dutch Shell | 21.05 | 17.92 | 85.15 |
| Samsung Electronics Co. | 417,000.00 | 575,000.00 | 105.00 |
| AT&T | 23.27 | 24.15 | 103.78 |
| Siemens AG | 55.33 | 48.93 | 88.43 |
| Total SA | 39.21 | 37.88 | 96.60 |
| Toyota Motor Corp. | 4,270.00 | 3,680.00 | 86.18 |
| AOL Time Warner Inc. | 17.11 | 24.22 | 105.00 |
| UBS AG | 42.01 | 13.79 | 32.83 |
| Verizon Communications Inc. | 33.47 | 30.02 | 89.71 |
| Vodaphone Group Plc | 117.14 | 119.13 | 101.69 |
| Wal-Mart Stores Inc. | 53.25 | 48.59 | 91.25 |
| Wyeth | 34.26 | 44.62 | 105.00 |
| Index Level (as of Jun. 22/09) | 76.98 | ||
| Commentary | as at June 30, 2009 |
There are two values investors in the ONE Financial BNP Paribas Step-Over Bonds, Series 2 (the "Bonds") should be aware of: the first is the market price of the Bonds themselves, and the second is the Index Level† calculation.
If the Index Level† (starting initially at 100) is over 100 on any semi-annual coupon valuation date, investors will receive a coupon with the percentage being equal to the Index Level† minus 100 (up to a maximum of 5%). The Bonds' Index Level† ended the quarter at 71.53. Of the 50 stocks comprising the Index Level† calculation, 17 are up since inception, and 11 have already "stepped over" the 105 level (if all stocks have stepped over the 105 level by any coupon valuation date then investors will receive a full 5% coupon payment). Given that the coupon payments are based on the growth of the underlying stocks since the Bonds' inception date, it can generally be expected that coupon payments will be lower in the first year or two, but offset by higher payments in future years as the stocks have been given some time to grow, thereby averaging out to an attractive yield over the life of the product.
The top five performers as at June 22, 2009 include Qualcomm Inc. (up 116.6%), Exxon Mobil Corp. (up 50.0%), Time Warner Inc. (up 41.6%), Chevron Texaco Corp. (up 38.8%), and Samsung Electronic Co. (up 37.9%). The five worst performers as of the same date include AIG Inc. (down 98.0%), Lloyds Banking Group (which replaced HBOS Plc) (down 93.9%), Citigroup Inc. (down 93.2%), and Royal Bank of Scotland Plc (down 93.0%). Rounding out the list is Bank of America (down 72.0%). All of the companies in the index linked to the Bonds have proven themselves to be global leaders over the years, and their longer-term share price performance might be expected to reflect their longer-term industry leading prospects.
The market price of the Bonds has no bearing on the level of any variable interest coupon payment, and will not track the Index Level† but will be affected by many inter-related factors, including:
- changes in the level of interest rates,
- the current value of the Index Level† calculation,
- time remaining until the Bonds' maturity date,
- the level of volatility of the underlying stocks, and
- market demand for the Bonds.
The market price of the Bonds fell by fell by 20.6% since inception of the Bonds in July 2004. The Bonds are designed as an income producing vehicle that combine the potential for an attractive semiannual income stream with 100% principal guarantee at maturity.
Purchase
This Note has matured.
The Guarantor
BNP Paribas
BNP Paribas was established in 1848, and according to rankings published in July 2005 by The Bank, is the sixth largest banking group in the world and the largest in Europe based on total assets of approximately CAD $1.7 trillion (approximately the size of the Canada's five largest banks combined). As one of the world's leading diversified financial institutions BNP Paribas is present in over 85 countries, and has approximately 100,000 employees worldwide.
The BNP Paribas Group is organized around three core businesses: Retail Banking, Corporate & Investment Banking and Private Banking & Asset Management. Through its 2,200 branches across France and worldwide, BNP has more than twenty million individual and small business customers and 50,000 corporate customers.
BNP Paribas' long term debt ratings are: AA with a stable outlook from Standard & Poor's, Aa2 with a stable outlook from Moody's, and AA with a stable outlook from Fitch.
