Barclays to price Stars linked to S&P 500 index via Merrill Lynch

By Angela McDaniels

Tacoma, Wash., Oct. 11 - Barclays Bank plc plans to price 0% Strategic Accelerated Redemption Securities due October 2012 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at par of $10 plus a call premium of 14% to 18% per year if the index closes at or above its initial level on any of the call dates, which will fall six, nine and 12 months after issuance. The exact call premium will be set at pricing.

If the notes are not called, the payout at maturity will be par plus the index return. Because the final call date is also the final observation date, if the notes are not called, the index return will be negative and the payout at maturity will result in a loss of principal.

The notes will price and settle in October.

Bank of America Merrill Lynch is the agent.

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