1.     What is an investment in NAB Principal Series and who is the issuer?

Investments in NAB Principal Series are issued by National Australia Bank Limited (NAB, we or us). 

Each investment is a “deferred purchase agreement” which entitles you, at maturity, to be delivered selected shares or units with a value approximately equal to the value of your investment at its maturity. Alternatively you may elect to receive cash proceeds of the sale of those shares or units.

2.     What are the investment objectives?

An investment in NAB Principal Series provides investors with exposure to the capital growth of Australia’s largest listed entities through the S&P/ASX 200 index while still providing the safety of an element of capital protection at maturity. 

3.       What are the significant benefits of NAB Principal Series?

An investment in NAB has the following significant benefits:

• a choice of two different index-linked investment strategies, strategy A and strategy B, each having different capital/coupon risk and return profiles;
   
• capital protection through the NAB guarantee amount applicable to the relevant strategy if held to maturity. NAB is one of the largest banks in the world measured by market capitalisation and rated AA by Standard & Poor’s;
   
• the potential for a capital return at maturity reflecting any increase in the ending index level over the starting index level each as applicable to the relevant strategy;
   
• in the case of strategy A, the potential for up to 5 annual conditional coupons, each equal to 3% of the issue price, depending on the performance of the index during its term;
   
• in the case of strategy B, a participation rate of at least 110%;
   
• certainty of the level of exposure to the index during the term of the investment provided by a fixed participation rate for each strategy;
  
  
• and capital growth potential through a diversified exposure to Australia’s largest listed corporations by market capitalisation.

4.       What is a deferred purchase agreement?

If you make an investment in ASX 200 Choices you are entering into a deferred purchase agreement with us. Under this agreement we agree to deliver you assets having an approximately equivalent value to your investment at maturity.  These assets are referred to as delivery assets. 

5.       What are the delivery assets?

Shortly before the maturity date, we will select the shares or units to be delivered to you (the delivery assets). These will be units in the ASX listed SPDR S&P/ASX 200 Fund or shares or units in one or more of the 10 largest ASX listed entities by market capitalisation (at the date of this PDS). We may choose a different share or unit if we determine that it is not, or may not be, possible or practical for us to deliver these shares or units. Any replacement shares or units will be in one or more of the 100 largest ASX listed entities by market capitalisation.

6.       How many delivery assets am I entitled to?

The number of delivery assets to which you are entitled at the maturity date in respect of your investment is your delivery parcel. It is worked out by us as the number (rounded down to the nearest whole number) equal to:

• the maturity amount of each investment which you hold on its maturity date multiplied by the number of such investments you hold on their maturity date divided by
   
• the weighted average price of the delivery assets acquired by us on or after the maturity date of such investments for the purpose of settling your investment.

7.       Can I elect to receive cash instead of delivery assets?

Yes. Before the maturity date of your investment you will be sent a settlement election form on which you can elect to receive the delivery parcel or for the delivery parcel to be sold on your behalf and the sale proceeds paid to you. We will deduct a brokerage fee if you elect to receive the proceeds in cash.

If you do not make an election in respect of an investment you will be taken to have chosen to receive the delivery parcel and we will transfer the delivery parcel to you after maturity.  However, if you have not provided information to enable us to transfer the delivery parcel to you, you will be deemed to have elected that the delivery parcel be sold on your behalf and the sale proceeds, less brokerage fees, will be paid to you.

8.       What is the index?

The Standard & Poor’s / Australian Securities Exchange 200 Index is a capitalisation weighted index measuring the performance of 200 of the largest index eligible stocks listed on the ASX by market capitalisation. The index was launched in April 2000.  The stocks included in the index are selected by a panel that follows transparent guidelines for stock selection.  Generally, the index covers the majority of the top 200 listed corporations by market capitalisation, however all stocks are evaluated for listing, market capitalisation, public float and liquidity. The index covers approximately 78% of the ASX market capitalisation.

9. Can the index be changed?

If the index materially changes or is not calculated and announced by Standard & Poor’s for any reason, but is calculated and announced by a successor sponsor acceptable to us, then that successor index will be deemed to be the index for the rest of the term of your investment. In connection with a change to the index, we may adjust the number of your investments or adjust any of the terms of your investment in accordance with the investment conditions set out in the relevant PDS.  Where the index is cancelled or is materially changed, and there is no successor index acceptable to us, we will terminate your investment in accordance with the investment conditions. The NAB guarantee amount does not apply in the event of an early termination of your investment which means that you might receive less than the NAB guarantee amount (and less than the amount you invested) in these circumstances.

10. Can investments be withdrawn or terminated before maturity?

If you ask to withdraw your investment before maturity, we may allow you to withdraw early.  Also, if anything happens which we determine makes it illegal, impossible or impracticable for us to perform our obligations in connection with your investment, we may need to terminate your investment before maturity.

If we allow you to withdraw early, or we need to terminate, then the NAB guarantee amount will not apply and, based on market circumstances, you may receive less than you invested.

Also, if we allow you to withdraw early, you cannot elect to have the shares or units delivered to you and they will be sold on your behalf. A brokerage fee will be deducted from the sale proceeds of shares or units sold for you and, if you withdraw within two years of the issue date, an early withdrawal fee will also apply.

     11. What shares or units could be delivered under my investment?

We will select the shares or units delivered or sold on your behalf shortly before the delivery or sale takes place. They will be units in the ASX listed SPDR S&P/ASX 200 Fund or shares or units in one or more of the 10 largest ASX listed entities by market capitalisation.  We may choose a different share or unit if we determine that it is not, or may not be, possible or practical for us to deliver these shares or units.

Important Information
 
The information contained in this website is published by National Australia Bank Limited ABN 12 004 044 937 (NAB).  The NAB can be contacted by calling telephone banking on 13 10 12.
Offers of NAB Principal Series - ASX 200 Focus (ASX 200 Focus) will be made in the Combined Product Disclosure Statement and Financial Services Guide (PDS) for the offer issued by the NAB and dated 19 April 2010. ASX 200 Focus will only be able to be acquired on the application form attached to the PDS.

The information contained in this website is of a general nature only.  The information contained in this website has been prepared for the purpose of providing general information only without taking account of any particular investor's objectives, financial situation or needs and is not an offer to sell, or solicitation of an offer or a recommendation to buy any financial product and is not intended to be a complete summary or statement of the ASX 200 Focus. The information contained in this website is not a product disclosure statement and it does not contain all of the information that such a product disclosure statement is required to contain.  Accordingly, any offer of interests received in Australia in connection with the information contained in this website is void.   An investor must, before making any investment decisions, consider the full details set out in the PDS and seek professional advice, having regard to the investor's objectives, financial situation and needs.
 

NAB acts as both the issuer and a distributor of ASX 200 Focus. If you acquire interests in ASX 200 Focus, the NAB or any of its related bodies corporate (NAB Group) may receive remuneration or other benefits in relation to that product, including withdrawal, ongoing guarantee and management fees and any other fee specified in the PDS. 
  

An investment in ASX 200 Focus is not a deposit with the NAB or any other company in the NAB Group.  It is a liability of the NAB on the terms set out in the investment conditions contained in the PDS and is subject to investment risk including possible delays in repayment and loss of income or principal invested.  Neither the NAB nor or any other company in the NAB Group guarantees the performance of ASX 200 Focus or any particular rate of return.
 

NAB voluntarily subscribes to the Code of Banking Practice which lays down standards of good banking practice for dealing with small businesses and individuals.  A copy of the Code can be obtained by calling 13 10 12.

S&P/ASX 200 Index Disclaimer
 
Standard & Poor’s Financial Services LLC has granted NAB a licence to reference the index for the purposes of ASX 200 Focus. The terms of NAB’s licence require us to include the following disclaimer in these materials. Please read this disclaimer carefully before investing.
  

Investments in ASX 200 Focus are not sponsored, endorsed, sold or promoted by Standard & Poor’s (“S&P”) or its third party licensors.  Neither S&P nor its third party licensors makes any representation or warranty, express or implied, to the owners of investments in ASX 200 Focus or any member of the public regarding the advisability of investing in securities generally or in investments in ASX 200 Focus particularly or the ability of the index to track general stock market performance.  S&P’s and its third party licensor’s only relationship to NAB is the licensing of certain trademarks and trade names of S&P and the third party licensors and of the index which is determined, composed and calculated by S&P or its third party licensors without regard to NAB or investments in ASX 200 Focus.  S&P and its third party licensors have no obligation to take the needs of NAB or the owners of investments in ASX 200 Focus into consideration in determining, composing or calculating the index. 
  

Neither S&P nor its third party licensors is responsible for and has not participated in the determination of the prices and amount of investments in ASX 200 Focus or the timing of the issuance or sale of investments in ASX 200 Focus or in the determination or calculation of the equation by which investments in ASX 200 Focus are to be converted into delivery assets.  S&P has no obligation or liability in connection with the administration, marketing or trading of investments in ASX 200 Focus.
  

NEITHER S&P, ITS AFFILIATES NOR THEIR THIRD PARTY LICENSORS GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P, ITS AFFILIATES AND THEIR THIRD PARTY LICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P, ITS AFFILIATES OR THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE.
 

“Standard & Poor’s” and “S&P” are trademarks of Standard & Poor’s and have been licensed for use by NAB. “ASX” is a trademark of ASX Operations Pty Limited and has been licensed for use by S&P. ASX 200 Focus is not sponsored, endorsed, sold or promoted by Standard & Poor’s or ASX Operations Pty Limited and neither Standard & Poor’s nor ASX Operations Pty Limited make any representation regarding the