Principal Protected Notes

Variable Step-Up Bonds, Series 1

Product Summary

Inception Date May 13, 2005
Maturity Date December 31, 2012
Offering Price $100.00
Guarantee Amount $......
Market Price Per Note (CAD) $......
Market Price Per Note (USD) $......
Current Basket Level† ......
Total Distributions $......

The ONE Financial Variable Step-Up Bonds™, Series 1 (the "Bonds") are an innovative new principal guaranteed investment designed to provide conservative investors with an attractive alternative to GICs and other traditional income investments. The Bonds mature in 2012, and provide the potential for semi-annual coupons paying:

Starting 7 years before maturity 3% guaranteed, up to 8% per year
Starting 6 years before maturity up to 8% per year
In 4th year before maturity up to 10% per year
In 3rd year before maturity up to 11% per year
In 2nd year before maturity up to 12% per year
In last year before maturity up to 13% per year

These Bonds are a great investment for investors who value the security of a principal guarantee on their high income-seeking investments, want to diversify their income portfolio, and are seeking potentially attractive periodic coupons with weekly liquidity. They are a simple investment solution that offers both income and globally diversified growth exposure.

  • Issued by BNP Paribas S.A. (Canada) and guaranteed by its parent BNP Paribas S.A., the 7th largest bank in the world as of the end of 2003 (more than three times the size of Canada's largest bank)
  • Unique opportunity for superior income potential versus investments of similar duration and quality
  • Coupons linked to the returns since inception of a basket of 40 major global companies
  • No need to wait until maturity to ascertain profits; semi-annual coupon payments allow investors to lock in stock-market returns every six months
  • Cash-in any week prior to maturity*
  • No management fees
  • No exposure to fluctuations in foreign currencies
  • 100% RRSP, RRIF, RESP, and DPSP eligible as Canadian property
  • Available in both US$ and CDN$
  • Initial Offering Period: until April 30th, 2005 (the "Closing Date")

The Bonds offer principal-guaranteed annual income potential that is up to 9.11% greater than a 7-year government bond, and up to 8.95% greater than a bank-issued GIC.

Investment Details

Style Variable Income / Principal-Guaranteed
Underlying investment 40 of the world's largest companies
Guarantor BNP Paribas S.A. (Rated AA by S&P)
Administrator ONE Financial
Coupon dates December 31 & June 30
Liquidity Weekly
RSP eligibility 100% (Canadian content)
Performance as at June 30, 2009

CAD

USD

Returns as at June 30, 2009
CAD USD
1 Month -1.56% -1.14%
3 Months -4.25% -4.01%
6 Months -7.11% -6.89%
Year-To-Date -7.11% -6.89%
1 Year 0.75% -0.88%
3 Year (annualized) 2.88% 2.53%
Total Return since Inception -9.86% -9.63%
Total Coupon Payments To Date $8.2802 $8.2802
Initial Price $100.00 $100.00
Current Price $81.86 $82.09
Current Basket Level 79.52
Geographic Diversification as at June 22, 2009
France 15.00%
Germany 17.50%
Hong Kong 2.50%
Italy 2.50%
Japan 12.50%
Korea 2.50%
Netherlands 5.00%
Spain 2.50%
Switzerland 5.00%
U.K. 10.00%
U.S. 25.00%
Basket Level† as at June 22, 2009
Underlying
Holdings		 Initial price Current price Component
basket level†
Abbott Laboratories 49.47 46.71 94.42
Aegon NV 9.74 3.97 40.76
AstraZeneca PLC 2,320.00 2,668.33 104.00
BASF AG 51.17 28.08 54.88
Bayer AG 26.01 38.95 104.00
Biogen Idec Inc. 38.55 49.10 104.00
Carrefour SA 38.63 29.82 77.19
China Mobile HK Ltd. 26.30 76.30 104.00
Deutsche Telekom 14.71 8.27 56.22
Diageo PLC 805.00 872.63 104.00
Du Pont (De Nemours) & Co. 46.54 24.10 51.78
E.ON AG 21.01 24.77 104.00
Enel 6.96 3.42 49.11
France Telecom SA 22.99 16.08 69.93
GlaxoSmithKline 1,341.00 1,093.91 81.57
Home Depot Inc. 37.37 23.25 62.22
Infineon AG 7.10 2.19 30.85
ING Groep NV 21.82 7.01 32.13
Johnson & Johnson 67.64 55.49 82.04
Kingfisher PLC 259.75 172.13 66.27
McDonald’s Corporation 29.88 57.20 104.00
Mizuho Financial Group Inc. 494,000.00 249.00 50.40
Nestle 32.28 40.18 104.00
Nomura Holdings Inc. 1,307.00 822.00 62.89
NTT 442,000.00 3,830.00 86.65
Qualcomm Inc. 35.34 44.40 104.00
Repsol 19.68 15.41 78.30
RWE AG 46.05 55.93 104.00
Samsung Electronics 488,000.00 575,000.00 104.00
Sanofi-Synthelabo 69.90 47.05 67.31
Sharp Corp 1,654.00 1020.00 61.67
GDF Suez 20.91 26.43 104.00
Total SA (Ex. Total Fina Elf) 42.67 37.88 88.77
Mitsubishi UFJ Financial 872.58 615.00 70.48
US Bancorp 28.84 17.08 59.22
Verizon Communications Inc. 33.24 30.02 90.30
Vivendi 24.38 17.35 71.16
Volkswagen AG 34.15 219.45 104.00
Wyeth 44.55 44.62 100.16
Zurich Financial Services 207.68 190.90 91.92
Basket Level (as of Jun. 22/09) 79.52

Above is a calculation showing the current Basket Level†. If the Basket Level† (starting initially at 100) is the over 100 on any semi-annual coupon valuation date, investors will receive a coupon with the percentage being equal to the Basket Level† minus 100 (up to a maximum of 6.5% in the Bonds' final year).

Underlying Investments

Returns linked to a basket of 40 major global companies

The variable component of the Bonds' semi-annual coupon payments is linked to the capped returns, since the Bonds' inception date, of 40 major global stocks including some of the world's largest, industry-leading, blue-chip companies. For a detailed description of the coupon calculation methodology please refer to the Bonds' Information Statement (available upon request). Initially the basket will consist of the following companies:

Company Country Profile
Abbott Laboratories USA Researches, manufactures and sells a broad line of health care products
Aegon NV Netherlands Provider of insurance and investment products in Europe and N.A.s
Astrazeneca PLC UK Researches, manufactures and sells pharmaceutical and medical products
BASF AG Germany Explores for oil and natural gas, produces plastics, chemicals
Bayer AG Germany Produces and markets healthcare & agricultural products, chemicals and polymers
Biogen Idec Inc USA Develops, manufactures, commercializes biotechnology therapies
Carrefour SA France Operates chains of supermarkets in Europe, America and Asia
China Mobile HK Ltd Hong Kong Cellular telecommunication services provider in the People's Republic of China
Deutsche Telekom Germany Telecommunications services provider in Germany
Diageo PLC UK Produces, distills and markets alcoholic beverages
Du Pont (E.I.) De Nemours & Co USA Global chemical company; producer of high-performance materials & pharmaceuticals
E.ON AG Germany Generates, distributes and trades electricity and distributes gas and drinking water
Enel Italy Generates, transmits, distributes and trades electricity
France Telecom SA France Telecommunications services provider in France
GlaxoSmithKline UK Develops, manufactures and markets vaccines and medicines
Home Depot Inc USA Retailer of building materials and home improvement products
Infineon Technologies AG Germany Designs, manufactures and markets semiconductors
ING Groep NV Netherlands Global provider of financial services
Johnson & Johnson USA Manufactures health care products and provides related consumer services
Kingfisher PLC UK Sells home consumer goods
McDonald's Corporation USA Largest fast-food restaurant company in the world
Mizuho Financial Group Inc Japan Provider of banking, securities brokerage and assets management
Nestle N Switzerland Largest food producer in the world
Nippon Telegraph & Phone Japan Telecommunication services provider in Japan
Nomura Holdings Inc Japan Provider of securities dealings, brokerage, underwriting and asset management
Qualcomm Inc USA Develops products & services based on digital technology
Repsol YPF SA Spain Explores for and produces crude oil and natural gas, refines petroleum
RWE AG Germany Germany energy businesses and municipal services provider
Samsung Electronics Korea Global manufacturer of a wide range of consumer and industrial electronic equipment
Sanofi Aventis France Manufacturer of prescription pharmaceuticals
Sharp Corp Japan Global manufacturer of consumer and industrial electronics
Suez France Global producer of chemical products water treatment
Total SA (Ex. Total Fina Elf) France Operates gasoline filling stations in Europe, the United States and Africa
UFJ Holdings Inc Japan Provider of banking, securities brokerage and trust banking
US Bancorp USA Provider of banking, trust and investment management services
Verizon Communications Inc USA Provider of wireless services, internet services and published directory information
Vivendi Universal SA France Global producer and distributor of music, television programming and movies
Volkswagen AG Germany Manufactures economy and luxury automobiles
Wyeth USA Pharmaceutical and health care products company
Zurich Financial Services Switzerland Global insurance company offering property, accident, health, automobile and liability
Commentary as at June 30, 2009

There are two values investors in the ONE Financial BNP Paribas Variable Step-Up Bonds, Series 1 (the "Bond") should be aware of: the first is the market price of the Bonds themselves, and the second is the Basket Level† calculation.

If the Basket Level† (starting initially at 100) is over 100 on any semi-annual coupon valuation date, investors will receive a coupon starting in December 2005 with the percentage being equal to the Basket Level† minus 100 (currently up to a maximum of 4%). The Bonds' Basket Level† ended the quarter at 79.52. Of the 40 stocks comprising the Basket Level† calculation, 14 are up since inception, and 13 have already "stepped over" the 104 level (if all stocks have stepped over the 104 level by any coupon valuation date then investors will receive a full 4% coupon payment). Given that the coupon payments are based on the growth of the underlying stocks since the Bonds' inception date, it can generally be expected that coupon payments will be lower in the first year or two, but offset by higher payments in future years as the stocks have been given some time to grow, thereby averaging out to an attractive yield over the life of the product.

The top five performers as at June 22, 2009 include Volkswagen AG (up 542.6%), China Mobile HK Ltd. (up 190.1%), McDonalds Corp. (up 91.4%), Bayer AG (up 49.8%), and Biogen Idec Inc. (up 27.4%). The five worst performers as of the same date include include Infineon AG (down 69.2%), ING Groep NV (down 67.9%), Aegon AG (down 59.2%), Enel (down 50.9%), and Mizuho Financial Group Inc. (down 49.6%). All of the companies in the basket linked to the Bonds have proven themselves to be global leaders over the years, and their longer-term share price performance might be expected to reflect their longer-term industry leading prospects.

The market price of the Bonds has no bearing on the level of any variable interest coupon payment, and will not track the Basket Level† but will be affected by many inter-related factors, including:

  • changes in the level of interest rates,
  • the current value of the Basket Level† calculation,
  • time remaining until the Bonds' maturity date,
  • the level of volatility of the underlying stocks, and
  • market demand for the Bonds.

The market price of the Bonds fell by 18.1% CAN (17.9% USD) since inception of the Bonds in May 2005. The Bonds are designed as an income producing vehicle that combine the potential for an attractive semiannual income stream with 100% principal guarantee at maturity..

Purchase

This Note is not available for purchase at this time.

The Guarantor

BNP Paribas

BNP Paribas was established in 1848, and according to rankings published in July 2005 by The Bank, is the sixth largest banking group in the world and the largest in Europe based on total assets of approximately CAD $1.7 trillion (approximately the size of the Canada's five largest banks combined). As one of the world's leading diversified financial institutions BNP Paribas is present in over 85 countries, and has approximately 100,000 employees worldwide.

The BNP Paribas Group is organized around three core businesses: Retail Banking, Corporate & Investment Banking and Private Banking & Asset Management. Through its 2,200 branches across France and worldwide, BNP has more than twenty million individual and small business customers and 50,000 corporate customers.

BNP Paribas' long term debt ratings are: AA with a stable outlook from Standard & Poor's, Aa2 with a stable outlook from Moody's, and AA with a stable outlook from Fitch.

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