FTSE 5 Quarterly Defensive Plan 4

4.25% per quarter with 17 early maturity opportunities

  • Investment returns linked to the performance of five leading companies within their respective sectors.
  • The five companies are BHP Billiton, GlaxoSmithKline, HSBC Holdings, Royal Dutch Shell (Class A shares) and Tesco plc.
  • Early maturity will be triggered on any Measurement Date providing all five of the shares are at or above 85% of their respective Opening Levels. In this case capital will be returned in full plus a growth payment of 4.25% (gross) for each quarter the Plan has been in force. The first Measurement Date is nine months after the start date at which point the growth payment will be 12.75%.
  • Capital is at risk if the Final Level of the lowest performing share closes more than 50% below its respective Opening Level; if this is the case the reduction in capital will equal the difference between the Opening Level and Final Level of the lowest performing share; otherwise, 100% of the capital will be returned at maturity.
  • The capital and investment returns of the Plan are dependent on the counterparty being able to make the payments due from the Plan.
  • The counterparty is The Royal Bank of Scotland plc ('RBS'), which has a Standard & Poor's long term credit rating of 'A' as at 11th January 2012.
  • Available until 22nd February 2012.

Target Market

This investment could be suitable as part of an investment portfolio for investors who

  • understand and are used to equity based investments, and
  • are able to invest for a period of up to five years, and
  • are prepared to accept the investment risk to their capital in return for a higher potential growth than would be available via a deposit based investment

Key Facts

Investment Term     

Five years and two weeks, with the potential for early maturity on any of the Measurement Dates. Early maturity will be triggered if all of the shares are at or above 85% of their respective Opening Levels. The first Measurement Date is on 26th November 2012, nine months after the Start Date.

Availability      

As direct investments, stocks and shares ISAs and ISA transfers, and for pension funds, trustees and companies.

Shares

BHP Billiton, GlaxoSmithKline, HSBC Holdings, Royal Dutch Shell (Class A Shares) and Tesco plc.

Investment Return     

If, on any Measurement Date, all of the shares are at or above 85% of their respective Opening Levels, the Plan will mature and pay 4.25% (gross) for each quarter the Plan has been in force. The first Measurement Date is on 26th November 2012, nine months after the Start Date at which point the growth payment would be 12.75%. If the close of business level of one or more of the shares are below 85% of their respective Opening Levels on any Measurement Date, the Plan will continue for another quarter.

If the Plan runs for its full five years, the investment return will be 85% as long as all of the shares are at least equal to 85% of their respective Opening Levels at close of business on 24th February 2017. If the Final Level of one or more of the shares are lower than 85% of their respective Opening Levels there will be no investment return payable.

Capital Return

Your capital will be returned in full at maturity provided the Final Level of the lowest performing share is not more than 50% below its Opening Level. If one or more of the shares has fallen by more than 50%, the reduction of capital will equal the difference between the Opening Level and the Final Level of the lowest performing share.

Counterparty Risk     

The securities will be issued by The Royal Bank of Scotland plc, a major financial institution with a long term credit rating of 'A' by Standard and Poor’s as at 11th January 2012. The credit rating is subject to change during the offer period and the term of the investment.

If the financial institution were to fail to meet the repayments due to you, you could lose some or all of your investment. Counterparty risk is common to all similar investments.

Tax     

Under current tax legislation gains on direct investments will be subject to Capital Gains Tax.

Interest     

Interest will be credited on subscriptions received and held in our client account up to the investment date, subject to a de minimis limit of £10.

Charges     

There are no initial or ongoing charges. Charges are included in the pricing of the investment.

Early encashments and transfers during the investment term will be subject to an administration charge.

Commission     

3%

Securities     

Securities will be structured to provide the returns shown in the plan brochure, and purchased for each investor. These may be notes, warrants, shares or deposits depending on the nature of the investment.

For this product the Securities will be Certificates.

Key Dates

Available until

22/02/2012

ISA transfers

Applications must be received by 10/02/2012

Start date

24/02/2012

Opening level

24/02/2012

Final level

24/02/2017

Maturity date

10/03/2017

Measurement Dates: 26th November 2012, 25th February 2013, 24th May 2013, 27th August 2013, 25th November 2013, 24th February 2014, 27th May 2014, 26th August 2014, 24th November 2014, 24th February 2015, 26th May 2015, 24th August 2015, 24th November 2015, 24th February 2016, 24th May 2016, 24th August 2016 and 24th November 2016.