RBS to price annual reset coupon securities linked to S&P 500 index

By Jennifer Chiou

New York, Jan. 7 - Royal Bank of Scotland NV plans to price annual reset coupon securities due Jan. 29, 2016 linked to the S&P 500 index, according to an FWP with the Securities and Exchange Commission.

Interest will be payable annually. If the index return on the relevant observation date is zero or positive, the coupon will be 7.25% for that year. Otherwise, the coupon will be 2%. For each interest period, the initial index level used to calculate the return will be the index's level roughly one year prior to the coupon payment date.

The observation dates will be on Jan. 26 from 2012 through 2016.

The payout at maturity will be par unless the final index level is less than 80% of the initial index level, in which case investors will lose 1% for every 1% decline below the buffer.

The notes (Cusip: 78009KQE5) are expected to price on Jan. 26 and settle on Jan. 31.

RBS Securities Inc. is the agent.

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