Barclays plans to price 0% Barclays Prosper ETF notes due 2011

By Angela McDaniels

Tacoma, Wash., Oct. 7 - Barclays Bank plc plans to price 0% Barclays Perpetual Rolling Open Structure Protecting Equity Returns exchange-traded fund notes due Oct. 21, 2011, according to a 424B3 filing with the Securities and Exchange Commission.

The Barclays Prosper ETF portfolio tracks the value of a notional investment in (a) index-linked cash deposits and (b) a basket of ETFs and index-linked cash deposits representing the notional amount of cash distributed as dividends by those ETFs during the term of the notes, net of hypothetical withholding tax.

The ETF basket includes the SPDR S&P 500 ETF, SPDR S&P MidCap 400 ETF, PowerShares QQQ, iShares MSCI EAFE index fund, iShares MSCI Emerging Markets index fund, iShares Barclays Aggregate bond fund, iShares iBoxx $ Investment Grade Corporate fund, iShares Barclays TIPS bond fund, iShares Barclays 1-3 Year Treasury bond fund and SPDR Gold Shares.

The allocation will vary according to a dynamic allocation mechanism, and the goal is to maximize the portfolio's exposure to the performance assets while maintaining the value of the portfolio at or above a minimum protection level. On the pricing date, 100% will be allocated to the performance assets and 0% will be allocated to the cash assets.

The portfolio is divided into units, which each unit representing the value and performance of a single security. On the pricing date, the value of each unit will be equal to 98.25% of the face amount of each security, or $982.50. This value is recalculated each day based on the performance of the underlying ETF shares and the cash component.

An investor fee will be deducted from the unit value each day. If the unit value on the immediately preceding day is less than or equal to the minimum protection level, the investor fee rate will be the lesser of (a) 0.85% per year and (b) the Federal Funds rate minus 15 basis points. Otherwise, it will be 0.85% per year.

The minimum protection level on any day is the greater of (a) $800 and (b) 80% of the highest unit value recorded up to that point.

The payout at maturity will be the greater of the unit value on the final valuation date and the minimum protection level on that date.

The notes (Cusip 06740PTC0) are expected to price Oct. 26 and settle Oct. 29.

Barclays Capital Inc. is the agent.

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