Transcript AGaramond Regular SC 36 point Bold Centred

Skylon Big Five Barrier Return Of
Capital Note Securities
Available August 20th – September 30th, 2008
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
INVESTMENT RATIONALE
•
Bank share prices volatility has risen dramatically from the levels seen
over the last five years and Bank share prices have declined significantly
from 52 week highs.
•
The Skylon Big Five Barrier ROC Notes allow Holder to take advantage
of these conditions and receive a substantial premium, paid out in the form
of regular tax advantaged distributions.
1
INTERNAL USE ONLY / DO NOT COPY
STBANKX Volatility
2
SKYLON Big Five Barrier ROC Notes
HIGHLIGHTS
• 5 Year Term
• ROC (Return of Capital) Payments of 7.5% P.A.
• 50% Barrier provides cushion for further price decline of Canadian Bank
shares if none of the Canadian Bank shares decreases by 50% or more
during the term of the Note Securities.
3
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
THE NOTES HAVE BEEN DESIGNED TO PROVIDE:
•
Annual distributions at a rate of 7.5% per annum.
 Distributions are in the form of return of capital (tax deferral).
•
•
An amount of $100.00 to holders at the end of the five year term unless any
of the Bank shares breached its Barrier.
If any of the Bank shares reached or fell below its Barrier during the term
of the Notes and the worst performing share return is negative holders will
receive at maturity $100.00 per Note Security reduced by the percentage
decline of the worst performing Bank share.
4
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
PERFORMANCE EXAMPLE
• Holder receives their ROC Payments regardless of Bank share performance.
• If a Bank share ever reached or breached its Barrier at any time during the
term of the Note Securities the payment at maturity will depend on the level
of the worst performing Bank share.
• If a Barrier has been breached and the worst performing Bank share is down
by 20% at maturity, the Holder will receive $80 at maturity. Holder will still
have received $37.50 of ROC payments.
5
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
Data: In the last 25 years,
•
•
The periods of worst historical price declines for the Bank Shares have not breached a 40% barrier
3 Bank Shares would have had periods (4 in total1) during which their closing prices would have
breached the 50% barrier:
 BMO:
from April 1998 to January 2000 (worst performance of -50.06%)
 BNS:
from February 1987 to November 1990 (worst performance of –50.29%)
 CM:
from March 1998 to October 1998 (worst performance of -57.23%)
 CM:
from May 2007 to July 2008 (worst performance of -53.57%)
•
Current Bank Share Prices have already declined significantly from 52 week highs
Reference
Bank Shares
BMO
BNS
CM
RY
TD
52 Week
High Share
Price (2)
67.23
53.5
103.64
57
77.1
Current
Share Price
Decline from
52 Week High
(2)
(2)
44.83
47.35
59.34
44.74
59.4
Barrier & Barrier Price
-33.32%
-11.50%
-42.74%
-21.51%
-22.96%
Worst Decline Periods over Breach since 1983
(1)
(3)
40%
17.93
18.94
23.74
17.90
23.76
45%
20.17
21.31
26.70
20.13
26.73
50%
22.42
23.68
29.67
22.37
29.70
0
0
4
Worst
Historical Price
Decline (4)
# of Days for
Worst Price
Decline
-50.06%
-50.29%
-57.23%
-38.81%
-47.43%
650
1357
176
558
174
1. For BMO and BNS, only the 50% barrier was breached only during one day. This would therefore have affected only one specific Note Security.
For CM, the barrier was breached successive days during the same period, therefore affecting more than one Note Security, had they been
issued on consecutive days.
2. As of August 25, 2008
3. The price of one of the Bank Shares would have to close below its "Barrier Price" for the Notes to return less than $100 at Maturity
4. Since January 1, 1983 (last twenty five years)
6
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
SUMMARY OF THE OFFERING
• Issuer: National Bank of Canada
• Selling Period: August 20 – September 30, 2008
• Minimum Investment: $5,000
• Selling Concession Fee: 3.5%
• Eligibility: RRSPs, RRIFs, RESPs, DPSPs and RDSPs
• Secondary Market will be maintained daily by National Bank Financial
(subject to certain conditions)
• Declining 2 year Early Trading Charge
• FundSERV Code NBC1552
7
INTERNAL USE ONLY / DO NOT COPY
SKYLON Big Five Barrier ROC Notes
DISCLAIMER
This document is confidential and for the use of investment dealers only. The contents are not to be reproduced or distributed to the public or
press. This document should be read in conjunction with the shelf prospectus dated April 23, 2008 and the pricing supplement dated August 18,
2008. The information contained herein, while obtained from sources which we believe to be reliable, is not guaranteed as to its accuracy or
completeness. This document is for informational purposes only and does not constitute an offer to sell or a solicitation to buy the securities
referred to herein.
Skylon Big Five Barrier Return of Capital Note Securities, Series 1 are not principal protected note securities and Holders may receive an
amount that is less than the Remaining Principal Amount at maturity. An investment in the Note Securities is subject to a number of risk factors.
Potential purchasers should consult the Pricing Supplement before investing in the Note Securities. Capitalized terms used herein and not
otherwise defined have the meaning ascribed thereto in the Pricing Supplement.
This document relates only to the Note Securities offered under the Pricing Supplement and does not relate to the Reference Shares, the
Reference Issuers or other securities. The Bank has derived all disclosures contained in the Pricing Supplement and used by CI Investments in
this document regarding the Reference Shares and the Reference Issuers from publicly available information. Further, the Bank and the Agents
have not had an opportunity to verify the accuracy or completeness of any such information or to determine if there has been any omission by
any of the Reference Issuers to disclose any facts, information or events which may have occurred prior to or subsequent to the date as of
which any such information has been furnished by the Reference Issuers or which may affect the significance or accuracy of the Reference
Issuers of any such information.
8
INTERNAL USE ONLY / DO NOT COPY