Barclays plans 9% reverse convertibles tied to basket of five stocks

By Jennifer Chiou

New York, Jan. 7 - Barclays Bank plc plans to price 9% annualized reverse convertible notes due July 29, 2010 linked to a basket of five equally weighted stocks, according to an FWP filing with the Securities and the Exchange Commission.

The underlying stocks are American Express Co., Bank of America Corp., Capital One Financial Corp., MetLife, Inc. and Morgan Stanley.

Interest will be payable monthly.

The payout at maturity will be par unless any component stock closes below its protection level - 80% of its initial level - during the life of the notes and finishes below its initial level. If that trigger is hit, for each basket component that closes below its protection level during the life of the notes and finishes below its initial price, investors will receive a number of those shares equal to 20% of par divided by the initial share price. For each component that does not fall within those tests, the payout will be 20% of par.

The notes are expected to price on Jan. 26 and settle on Jan. 29.

Barclays Capital Inc. is the underwriter.

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