Barclays to price 14.25% reverse convertibles linked to ETF basket

By Angela McDaniels

Tacoma, Wash., March 4 - Barclays Bank plc plans to price reverse convertible notes due Sept. 30, 2009 linked to a basket of exchange-traded funds, according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 7.125% for an annualized coupon of 14.25%. Interest will be payable monthly.

The basket includes equal weights of the iShares MSCI EAFE index fund, iShares MSCI Emerging Markets index fund, Financial Select Sector SPDR fund and Energy Select Sector SPDR fund.

For each ETF that remains at or above its protection price - 65% of its initial share price - during the life of the notes or finishes at or above its initial price, the payout at maturity will be $250 in cash per $1,000 principal amount of notes.

For each ETF that closes below its protection price during the life of the notes and finishes below its initial price, the payout for each $1,000 principal amount of notes will be a number of shares equal to $250 divided by the initial price of that ETF or, at Barclays' option, $250 in cash minus the share price decline.

The notes are expected to price March 26 and settle March 31.

Barclays Capital Inc. is the agent.

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