New Issue: JPMorgan prices $460,000 10.25% reverse exchangeables linked to Applied Materials

By Angela McDaniels

Tacoma, Wash., May 15 - JPMorgan Chase & Co. priced $460,000 of reverse exchangeable notes due Nov. 19, 2008 linked to the common stock of Applied Materials, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The six-month notes will pay 5.125% for an annualized coupon of 10.25%. Interest is payable monthly.

The payout at maturity will be par unless Applied Materials stock falls by more than 20% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Applied Materials shares equal to $1,000 divided by the initial share price or, at JPMorgan's option, the equivalent cash value.

J.P. Morgan Securities Inc. is the agent.

Issuer:	JPMorgan Chase & Co.
Issue:	Reverse exchangeable notes
Underlying stock:	Applied Materials, Inc. (Nasdaq: AMAT)
Amount:	$460,000
Maturity:	Nov. 19, 2008
Coupon:	10.25%, payable monthly
Price:	Par
Payout at maturity:	If Applied Materials stock declines by more than the protection amount during the life of the notes and the final share price is less than the initial share price, 50.2513 shares or the equivalent cash value; otherwise, par
Initial share price:	$19.90
Protection amount:	$3.98, 20% of initial share price
Pricing date:	May 14
Settlement date:	May 19
Agent:	J.P. Morgan Securities Inc.
Fees:	3.4%, including 2.2% for selling concessions

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