UPDATED
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
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Proposed Maximum
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Title of Each Class of
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Amount To
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Offering Price
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Aggregate Offering
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Amount of
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Securities To Be Registered
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Be Registered
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Per Unit
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Price
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Registration Fee
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Notes offered hereby
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$
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2,373,150.00
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100.00%
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$
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2,373,150.00
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$
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93.26
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(1)
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The filing fee is calculated in accordance with Rule 457(r)
under the Securities Act. There are unused registration fees of
$18,626.79 that have been paid in respect of securities offered
from Eksportfinans ASA’s Registration Statement
No. 333–140456, of which this pricing supplement is a
part. After giving effect to the $93.26 registration fee for
this offering, $18,533.53 remains available for future
offerings. No additional registration fee has been paid with
respect to this offering.
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PRICING SUPPLEMENT NO. 175 dated February 22,
2008
To Prospectus Supplement and Prospectus dated February 5,
2007
Product supplement no. 3 dated January 25, 2008
Relating to the Eksportfinans ASA U.S. Medium-Term
Note Program
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Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-140456
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STRUCTURED
INVESTMENTS
Opportunities in
Equities
PLUS
based on the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
“Performance
Leveraged Upside Securities” and “PLUS” are the
service marks of Morgan Stanley.
PLUS offer leveraged exposure to a wide variety of assets and
asset classes, including equities, commodities and currencies.
These investments allow investors to capture enhanced returns
relative to the asset’s actual positive performance. The
leverage typically applies only for a certain range of price
performance. In exchange for enhanced performance in that range,
investors generally forgo performance above a specified maximum
return. At maturity, an investor will receive an amount in cash
that may be more or less than the principal amount based upon
the closing value of the asset at maturity.
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FINAL
TERMS
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Issuer:
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Eksportfinans ASA
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Maturity date:
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March 20, 2009
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Underlying shares:
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Shares of the
iShares
®
MSCI EAFE Index Fund
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Aggregate principal
amount:
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$2,373,150.00
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Payment at maturity:
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n
If
final share price is
greater than
initial share price,
$10.00 + leveraged upside payment
In no event will the payment at maturity exceed the maximum
payment at maturity.
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n
If
final share price is
less than or equal to
initial share
price,
$10.00 x (final share price /
initial share price)
This amount will be less than
or equal to the stated principal amount of $10.00.
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Share percent
increase:
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(final share price — initial share price) / initial
share price
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Leveraged upside
payment:
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$10.00 x leverage factor x share percent increase
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Initial share price:
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71.69, the closing price of one share of the underlying shares
on the trade date
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Final share price:
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The closing price of one share of the underlying shares on the
valuation date
times
the adjustment factor
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Leverage factor:
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300.00%
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Maximum payment at
maturity:
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$11.65 (116.50% of the stated principal amount)
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Stated principal
amount:
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$10.00
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Issue price:
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$10.00 (see “Commissions and Issue Price” below)
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Trade date:
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February 22, 2008
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Original issue date:
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February 29, 2008 (5 business days after the trade date)
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Valuation date:
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March 18, 2009, subject to adjustment for certain market
disruption events
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Adjustment factor:
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1.0, subject to adjustment in the event of certain events
affecting the underlying shares
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CUSIP:
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282645795
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Listing:
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The PLUS will not be listed on any securities exchange.
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Agent:
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Morgan Stanley & Co. Incorporated
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Commissions and
Issue Price:
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Price to
Public
(1)
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Agent’s
Commissions
(1)(2)
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Proceeds to Company
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Per PLUS:
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$10.00
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$0.15
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$9.85
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Total:
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$2,373,150.00
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$35,597.25
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$2,337,552.75
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(1)
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The actual price to public and
agent’s commissions for a particular investor may be
reduced for volume purchase discounts depending on the aggregate
amount of PLUS purchased by that investor. The lowest price
payable by an investor is $9.95 per PLUS. Please see
“Syndicate Information” below for further
details.
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(2)
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For additional information, see
“Supplemental Plan of Distribution” in product
supplement no. 3.
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YOU SHOULD READ THIS PRICING SUPPLEMENT TOGETHER WITH THE
ACCOMPANYING PRODUCT SUPPLEMENT NO. 3, THE PROSPECTUS
SUPPLEMENT AND
PROSPECTUS, EACH OF WHICH CAN BE
ACCESSED VIA THE HYPERLINKS BELOW.
The issuer has filed a registration
statement (including a prospectus) with the Securities and
Exchange Commission, or SEC, for the offering to which this
pricing supplement relates. Before you invest, you should read
the prospectus in that registration statement and other
documents relating to this offering that the issuer has filed
with the SEC for more complete information about the issuer and
this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the
issuer, any underwriter or any dealer participating in this
offering will arrange to send you the prospectus if you request
it by calling toll-free
1-800-584-6837.
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
Fact
Sheet
The PLUS offered are senior unsecured obligations of the Issuer,
will pay no interest, do not guarantee any return of principal
at maturity and have the terms described in product supplement
no. 3 and the prospectus supplement and prospectus, as
supplemented or modified by this pricing supplement. At
maturity, an investor will receive for each stated principal
amount of PLUS that the investor holds, an amount in cash that
may be more or less than the stated principal amount based upon
the closing price of one underlying share at maturity.
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Key
Dates
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Trade
date:
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Original issue date:
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Maturity date:
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February 22, 2008
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February 29, 2008 (5 business days after the trade date)
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March 20, 2009
,
subject to postponement due to a market
disruption event
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Key
Terms
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Issuer:
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Eksportfinans ASA
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Underlying shares:
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Shares of the
iShares
®
MSCI EAFE Index Fund
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Issue price:
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$10.00 per PLUS (see “Syndicate Information” below)
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Aggregate principal
amount:
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$2,373,150.00
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Stated principal
amount:
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$10.00 per PLUS
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Denominations:
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$10.00 per PLUS and integral multiples thereof
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Interest:
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None
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Bull market or bear market
PLUS:
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Bull market PLUS
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Payment at maturity:
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n
If
the final share price is
greater than
the initial share
price,
$10.00 + leveraged upside payment
In no event will the payment at maturity exceed the maximum
payment at maturity
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n
If
the final share price is
less than or equal to
the
initial share price,
$10.00 x share performance factor
This amount will be less than or equal to the stated
principal amount of $10.00.
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Leveraged upside
payment:
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$10.00 x leverage factor x share percent increase
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Leverage factor:
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300.00%
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Share percent
increase:
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(final share price – initial share price) / initial
share price
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Initial share price:
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71.69, the closing price of one share of the underlying shares
on the trade date
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Final share price:
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The closing price of the one underlying share on the valuation
date as published under the Bloomberg ticker symbol
“EFA” or any successor symbol,
times
the
adjustment factor
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Valuation date:
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March 18, 2009, subject to adjustment for certain market
disruption events
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Share performance
factor:
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(final share price / initial share price)
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Maximum payment at
maturity:
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$11.65 (116.50% of the stated principal amount)
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Adjustment factor:
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1.0, subject to adjustment in the event of certain events
affecting the underlying shares.
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Postponement of maturity
date:
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If the scheduled valuation date is not a trading day or if a
market disruption event occurs on that day so that the valuation
date as postponed falls less than two scheduled trading days
prior to the scheduled maturity date, the maturity date of the
PLUS will be postponed until the second scheduled trading day
following that valuation date as postponed.
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Risk factors:
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Please see “Risk Factors” below.
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February
2008
P-2
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
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General
Information
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Listing:
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The PLUS will not be listed on any securities exchange
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CUSIP:
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282645795
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Minimum ticketing
size:
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100 PLUS
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Tax considerations:
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Although the issuer believes that, under current law, the PLUS
should be treated as a single financial contract that is an
“open transaction” for U.S. federal income tax
purposes, there is uncertainty regarding the U.S. federal income
tax consequences of an investment in the PLUS.
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Assuming this characterization of the PLUS is respected and
subject to the discussion in “Taxation in the United
States” in the accompanying product supplement no. 3,
the following U.S. federal income tax consequences should result
based on current law:
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• A
U.S. Holder should not be required to recognize taxable income
over the term of the PLUS prior to maturity, other than pursuant
to a sale or exchange.
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• Upon
sale, exchange or settlement of the PLUS at maturity, a U.S.
Holder should generally recognize gain or loss equal to the
difference between the amount realized and the U.S.
Holder’s tax basis in the PLUS. Subject to the discussion
below concerning the potential application of the
“constructive ownership” rule under Section 1260
of the Internal Revenue Code of 1986, as amended, any capital
gain or loss recognized upon sale, exchange or settlement of a
PLUS should be long-term capital gain or loss if the U.S. Holder
has held the PLUS for more than one year at such time.
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As discussed in the accompanying product supplement no. 3
under “Taxation in the United States — Possible
Application of Section 1260 of the Code,” although the
matter is not clear, there is a substantial risk that an
investment in the PLUS will be treated as a “constructive
ownership transaction.” If this treatment applies, it is
not clear to what extent any long-term capital gain of the U.S.
Holder in respect of the PLUS will be recharacterized as
ordinary income (which ordinary income would also be subject to
an interest charge). U.S. investors should consult their tax
advisors regarding the potential application of the
“constructive ownership” rule.
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On December 7, 2007, the Treasury Department and IRS
released a notice requesting comments on the U.S. federal income
tax treatment of “prepaid forward contracts” and
similar instruments (such as the PLUS). The notice focuses in
particular on whether to require holders of such instruments to
accrue income over the term of their investment. It also asks
for comments on a number of related topics, including the
character of income or loss with respect to these instruments;
the relevance of factors such as exchange-traded status of the
instruments and the nature of the underlying property to which
they are linked; the degree, if any, to which any income
(including any mandated accruals) realized by
non-U.S.
holders should be subject to withholding tax; and whether these
investments are or should be subject to the “constructive
ownership” regime. While the notice requests comments on
appropriate transition rules and effective dates, Treasury
regulations or other guidance, if any, issued after
consideration of these issues could materially and adversely
affect the tax consequences of an investment in the PLUS,
possibly on a retroactive basis.
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Both U.S. and
non-U.S.
investors considering an investment in the PLUS should read the
discussion under “Risk Factors — Structure
Specific Risk Factors” in this pricing supplement and the
discussion under “Taxation in the United States” in
the accompanying product supplement no. 3 and consult their
tax advisers regarding the U.S. federal income tax consequences
of investing in the PLUS as well as the notice described above
and its potential implications for an investment in the PLUS.
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February
2008
P-3
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
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Trustee:
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The Bank of New York
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Calculation agent:
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Morgan Stanley & Co. Incorporated
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Use of proceeds and
hedging:
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The net proceeds from the sale of the PLUS will be used as
described under “Use of Proceeds” in the accompanying
prospectus and to hedge market risks of Eksportfinans associated
with its obligation to pay the payment at maturity of the PLUS.
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The hedging activity discussed above may adversely affect the
market value of the PLUS from time to time and the payment at
maturity you will receive on the PLUS at maturity. See
“Risk Factors — Hedging transactions may affect
the return on the PLUS” for a discussion of these adverse
effects.
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Contact:
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Morgan Stanley clients may contact their local Morgan Stanley
branch office or our principal executive offices at 1585
Broadway, New York, New York 10036 (telephone number
(866) 477-4776).
All other clients may contact their local brokerage
representative. Third-party distributors may contact Morgan
Stanley Structured Investment Sales at
(800) 233-1087.
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Syndicate
Information
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Issue price of the
PLUS
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Selling concession
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Principal amount of PLUS for any
single investor
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$10.00
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$0.15
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<$999K
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$9.975
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$0.125
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$1MM-$2.99MM
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$9.9625
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$0.1125
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$3MM-$4.99MM
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$9.95
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$0.10
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>$5MM
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Selling concessions allowed to dealers in connection with the
offering may be reclaimed by the agent, if, within 30 days
of the offering, the agent repurchases the PLUS distributed by
such dealers.
This pricing supplement represents a summary of the terms and
conditions of the PLUS. We encourage you to read the
accompanying product supplement no. 3, the prospectus
supplement and prospectus related to this offering, which can be
accessed via the hyperlinks on the front page of this pricing
supplement.
February
2008
P-4
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
How PLUS Work
The payoff diagram below illustrates the payment at maturity
on the PLUS based on the following hypothetical terms:
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Stated principal
amount:
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$10.00
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Leverage factor:
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300.00%
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Hypothetical maximum payment at
maturity:
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$11.75 (117.50% of the stated principal amount)
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PLUS Payoff Diagram
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How
it works
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n
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If the final share price is greater than the initial share
price, then investors receive the $10.00 stated principal amount
plus 300.00% of the appreciation of the underlying shares over
the term of the PLUS, subject to the maximum payment at
maturity. In the payoff diagram, an investor will realize the
maximum payment at maturity at a final share price of
approximately 5.833% of the initial share price.
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n
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If the underlying shares appreciate 5.00%, the investor would
receive a 15.00% return, or $11.50.
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n
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If the underlying shares appreciate 25.00%, the investor would
receive the hypothetical maximum payment at maturity of 117.50%
of the stated principal amount, or $11.75.
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n
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If the final share price is less than or equal to the initial
share price, the investor would receive an amount less than or
equal to the $10.00 stated principal amount, based on a 1.00%
loss of principal for each 1.00% decline in the price of the
underlying shares.
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n
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If the underlying shares depreciate 10.00%, the investor would
lose 10.00% of its principal and receive only $9.00 at maturity,
or 90.00% of the stated principal amount.
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February
2008
P-5
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
Payment
at Maturity
At maturity, investors will receive for each $10.00 stated
principal amount of PLUS that they hold an amount in cash based
upon the price of the underlying shares, determined as follows:
If the final share price is
greater than the initial share price:
$10.00 + Leveraged
Upside Payment:
subject to the
maximum payment at maturity
for each PLUS,
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Leveraged Upside
Payment
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Principal
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Principal
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Leverage
Factor
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Share Percent Increase
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$10.00
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+
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[
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$10.00
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×
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300.00%
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×
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{
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final share price − initial share price
initial
share price
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} ]
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If the final share price is
less than or equal to the initial share price:
$10.00 X Share
Performance Factor
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Principal
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Share Performance
Factor
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$10.00
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×
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final share price
initial
share price
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Because the share performance factor will be less than or equal
to 1.0, this payment will be less than or equal to $10.00.
February
2008
P-6
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
Risk
Factors
The following is a non-exhaustive list of certain key risk
factors for investors in the PLUS. For further discussion of
these and other risks, you should read the section entitled
“Risk Factors” beginning on
page PS-18
of product supplement no. 3. We also urge you to consult
your investment, legal, tax, accounting and other advisers
before you invest in the PLUS.
Structure
Specific Risk Factors
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n
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PLUS do not pay interest nor guarantee return of
principal.
The terms of the PLUS differ from those of
ordinary debt securities in that the PLUS do not pay interest
nor guarantee payment of the principal amount at maturity. If
the final share price is less than the initial share price, the
payout at maturity will be an amount in cash that is less than
the $10.00 stated principal amount of each PLUS by an amount
proportionate to the decrease in the price of the underlying
shares.
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n
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Appreciation potential is limited.
The appreciation
potential of PLUS is limited by the maximum payment at maturity
of $11.65, or 116.50% of the stated principal amount. Although
the leverage factor provides 300.00% exposure to any increase in
the price of the underlying shares at maturity, because the
payment at maturity will be limited to 116.50% of the stated
principal amount for the PLUS, the percentage exposure provided
by the leverage factor is progressively reduced as the final
share price exceeds approximately 105.5% of the initial share
price.
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n
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The market price is influenced by many unpredictable
factors.
Several factors will influence the value of the
PLUS in the secondary market and the price at which the Agent
may be willing to purchase or sell the PLUS in the secondary
market, including: the value, volatility and dividend yield of
the MSCI EAFE Index, interest and yield rates, time remaining to
maturity, geopolitical conditions and economic, financial,
political and regulatory or judicial events and creditworthiness
of the issuer.
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n
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The price of the underlying shares is subject to currency
exchange risk.
Because the price of the underlying shares is
related to the U.S. dollar value of stocks underlying the MSCI
EAFE Index Fund, holders of the PLUS will be exposed to currency
exchange rate risk with respect to each of the currencies in
which such component securities trade. An investor’s net
exposure will depend on the extent to which the currencies of
the component countries strengthen or weaken against the U.S.
dollar and the relative weight of each currency. If, taking into
account such weighting, the dollar strengthens against the
currencies of the component securities represented in the MSCI
EAFE Index, the price of the underlying shares will be adversely
affected and the payment at maturity on the PLUS may be reduced.
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Of particular importance to potential currency exchange risk
are:
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n
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existing and expected rates of inflation;
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n
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existing and expected interest rate levels;
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n
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the balance of payments; and
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n
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the extent of governmental surpluses or deficits in the
component countries and the United States of America.
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All of these factors are in turn sensitive to the monetary,
fiscal and trade policies pursued by the governments of various
component countries and the United States and other countries
important to international trade and finance.
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n
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There are risks associated with investments in securities
linked to the value of foreign equity securities.
The stocks
included in the MSCI EAFE Index and that are generally tracked
by the underlying shares have been issued by companies in
various foreign countries. Investments in securities linked to
the value of foreign equity securities involve risks associated
with the securities markets in those countries, including risks
of volatility in those markets, governmental intervention in
those markets and cross-shareholdings in companies in certain
countries. Also, there is generally less publicly available
information about foreign companies than about U.S. companies
that are subject to the reporting requirements of the United
States Securities and Exchange Commission, and foreign companies
are subject to accounting, auditing and financial reporting
standards and requirements different from those applicable to
U.S. reporting companies. The prices of securities in foreign
markets may be affected by political, economic, financial and
social factors in those countries, or global regions, including
changes in government, economic and fiscal policies and currency
exchange laws. Local securities markets may trade a small number
of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt
liquidation of holdings difficult or impossible at times.
Moreover, the economies in such countries may differ favorably
or unfavorably from the economy in the United States in such
respects as growth of gross national product, rate of inflation,
capital reinvestment, resources and self-sufficiency.
|
|
|
|
n
|
Adjustments to the underlying shares or to the MSCI EAFE
Index could adversely affect the value of the PLUS.
Barclays
Global Fund Advisors, which we refer to as
BGFA,
is
the investment adviser to the
iShares
®
MSCI EAFE Index Fund, which seeks investment results that
correspond generally to the price and yield performance, before
fees and
|
February
2008
P-7
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
|
|
|
|
|
expenses, of the MSCI EAFE Index. Morgan Stanley Capital
International Inc. (
MSCI
) is responsible for calculating
and maintaining the MSCI EAFE Index. MSCI can add, delete or
substitute the stocks underlying the MSCI EAFE Index or make
other methodological changes that could change the value of the
MSCI EAFE Index. Pursuant to its investment strategy or
otherwise, BGFA may add, delete or substitute the stocks
composing the
iShares
®
MSCI EAFE Index Fund. Any of these actions could adversely
affect the price of the underlying shares and, consequently, the
value of the PLUS.
|
|
|
|
|
n
|
Not equivalent to investing in the underlying shares.
Investing in the PLUS is not equivalent to investing in the
underlying shares or the MSCI EAFE Index. Investors in the PLUS
will not have voting rights or rights to receive dividends or
other distributions or any other rights with respect to the
underlying shares or the stocks that constitute the MSCI EAFE
Index.
|
|
|
|
n
|
The underlying shares and the MSCI EAFE Index are
different.
The performance of the underlying shares may not
exactly replicate the performance of the MSCI EAFE Index because
the
iShares
®
MSCI EAFE Index Fund will reflect transaction costs and fees
that are not included in the calculation of the MSCI EAFE Index.
It is also possible that the
iShares
®
MSCI EAFE Index Fund may not fully replicate or may in certain
circumstances diverge significantly from the performance of the
MSCI EAFE Index due to the temporary unavailability of certain
securities in the secondary market, the performance of any
derivative instruments contained in this fund, differences in
trading hours between the
iShares
®
MSCI EAFE Index Fund and the MSCI EAFE Index or due to other
circumstances. BGFA may invest up to 10.00% of the
iShares
®
MSCI EAFE Index Fund’s assets in shares of other
iShares
®
funds that seek to track the performance of equity securities of
constituent countries of the MSCI EAFE Index.
|
|
|
|
n
|
If the price of shares of the
iShares
®
MSCI EAFE Index Fund changes, the market value of the PLUS
may not change in the same manner.
Your PLUS may trade quite
differently from the performance of the
iShares
®
MSCI EAFE Index Fund. Changes in the price of shares of the
iShares
®
MSCI EAFE Index Fund may not result in a comparable change in
the market value of the PLUS. Even if the price of shares of the
iShares
®
MSCI EAFE Index Fund increases above the initial share price
during the term of the PLUS, the market value of the PLUS prior
to the maturity date may not increase by the same amount.
|
|
|
|
n
|
The PLUS do not bear interest.
You will not receive any
interest payments on the PLUS. Even if the amount payable on the
PLUS on the maturity date exceeds the principal amount of the
PLUS, the overall return you earn on the PLUS may be less than
you would have earned by investing in a non-indexed debt
security of comparable maturity that bears interest at a
prevailing market rate.
|
|
|
|
n
|
Past performance of the
iShares
®
MSCI EAFE Index Fund is no guide to future performance.
The
actual performance of the
iShares
®
MSCI EAFE Index Fund over the life of the offered notes, as well
as the amount payable at maturity, may bear little relation to
the historical prices of the
iShares
®
MSCI EAFE Index Fund or to the hypothetical return examples set
forth elsewhere in this pricing supplement. We cannot predict
the future performance of the
iShares
®
MSCI EAFE Index Fund.
|
|
|
|
n
|
We and our affiliates have no affiliation with BGFA and are
not responsible for its public disclosure of information.
We
and our affiliates are not affiliated with BGFA in any way and
have no ability to control or predict its actions, including any
errors in or discontinuation of disclosure regarding its methods
or policies relating to the calculation of the
iShares
®
MSCI EAFE Index Fund. If BGFA discontinues or suspends the
calculation of the
iShares
®
MSCI EAFE Index Fund, it may become difficult to determine the
market value of the PLUS or the maturity payment amount. The
calculation agent may designate a successor
iShares
®
MSCI EAFE Index Fund selected in its sole discretion. If the
calculation agent determines in its sole discretion that no
successor
iShares
®
MSCI EAFE Index Fund comparable to the
iShares
®
MSCI EAFE Index Fund exists, the amount you receive at maturity
will be determined by the calculation agent in its sole
discretion. BGFA is not involved in the offer of the PLUS in any
way and has no obligation to consider your interest as an owner
of PLUS in taking any actions that might affect the value of
your PLUS.
|
Each PLUS is an unsecured debt obligation of Eksportfinans only
and is not an obligation of BGFA. None of the money you pay for
your PLUS will go to BGFA. Since BGFA is not involved in the
offering of the PLUS in any way, it has no obligation to
consider your interest as an owner of PLUS in taking any actions
that might affect the value of your PLUS. BGFA may take actions
that will adversely affect the market value of the PLUS.
We have derived the information about BGFA and the
iShares
®
MSCI EAFE Index Fund in this pricing supplement from publicly
available information, without independent verification. Neither
we nor any of our affiliates assumes any responsibility for the
adequacy or accuracy of the information about the
iShares
®
MSCI EAFE Index Fund or BGFA contained in this pricing
supplement. You, as an investor in the PLUS, should make your
own investigation into the
iShares
®
MSCI EAFE Index Fund and BGFA.
February
2008
P-8
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
|
|
|
|
n
|
Hedging transactions may affect the return on the PLUS
As
described above under “Use of Proceeds and Hedging”,
we through one or more hedging counterparties may hedge our
obligations under the PLUS by purchasing the shares in the
iShares
®
MSCI EAFE Index Fund or common stocks of the Index underlying
the
iShares
®
MSCI EAFE Index Fund, futures or options on the common stocks of
the Index underlying the
iShares
®
MSCI EAFE Index Fund or other derivative instruments with
returns linked or related to changes in the market price of the
common stocks of the Index underlying the
iShares
®
MSCI EAFE Index Fund, and our hedging counterparties may adjust
these hedges by, among other things, purchasing or selling the
common stocks of the Index underlying the
iShares
®
MSCI EAFE Index Fund, futures, options or other derivative
instruments with returns linked to the common stocks of the
Index underlying the
iShares
®
MSCI EAFE Index Fund at any time. Although they are not expected
to, any of these hedging activities may adversely affect the
market price of the common stocks comprising the Index
underlying the
iShares
®
MSCI EAFE Index Fund and, therefore, the market value of the
PLUS. It is possible that our hedging counterparties could
receive substantial returns from these hedging activities while
the market value of the PLUS declines.
|
|
|
|
n
|
The antidilution adjustments the calculation agent is
required to make do not cover every event that could affect the
underlying shares.
Morgan Stanley & Co.
Incorporated, as calculation agent, will adjust the amount
payable at maturity for certain events affecting the underlying
shares. However, the calculation agent will not make an
adjustment for every event that could affect the underlying
shares. If an event occurs that does not require the calculation
agent to adjust the amount payable at maturity, the market price
of the PLUS may be materially and adversely affected.
|
|
|
|
n
|
The inclusion of commissions and projected profit from
hedging in the original issue price is likely to adversely
affect secondary market prices.
Assuming no change in market
conditions or any other relevant factors, the price, if any, at
which Morgan Stanley & Co. Incorporated is willing to
purchase PLUS in secondary market transactions will likely be
lower than the original issue price, since the original issue
price included, and secondary market prices are likely to
exclude, commissions paid with respect to the PLUS, as well as
the projected profit included in the cost of hedging the
issuer’s obligations under the PLUS. In addition, any such
prices may differ from values determined by pricing models used
by Morgan Stanley & Co. Incorporated, as a result of
dealer discounts,
mark-ups
or
other transaction costs.
|
|
|
|
n
|
The U.S. federal income tax consequences of an investment in
the PLUS are uncertain.
Please read the discussion under
“Fact Sheet — General Information — Tax
Considerations” in this pricing supplement and the
discussion under “Taxation In The United States” in
the accompanying product supplement no. 3 (together, the
Tax Disclosure Sections
) concerning the U.S. federal
income tax consequences of investing in the PLUS. If the
Internal Revenue Service (the
IRS
) were successful in
asserting an alternative characterization or treatment, the
timing and character of income on the PLUS might differ
significantly from the tax treatment described in the Tax
Disclosure Sections. For example, under one characterization,
U.S. Holders could be required to accrue original issue discount
on the PLUS every year at a
comparable yield
determined
at the time of issuance and recognize all income and gain in
respect of the PLUS as ordinary income. The issuer does not plan
to request a ruling from the IRS regarding the tax treatment of
the PLUS, and the IRS or a court may not agree with the tax
treatment described in this pricing supplement and the
accompanying prospectus supplement. As discussed in the Tax
Disclosure Sections, there is a substantial risk that the
“constructive ownership” rule could apply, in which
case all or a portion of any long-term capital gain recognized
by a U.S. Holder might be recharacterized as ordinary income
(which ordinary income would also be subject to an interest
charge). On December 7, 2007, the Treasury Department and
the IRS released a notice requesting comments on the U.S.
federal income tax treatment of “prepaid forward
contracts” and similar instruments (such as the PLUS). The
notice focuses in particular on whether to require holders of
such instruments to accrue income over the term of their
investment. It also asks for comments on a number of related
topics, including the character of income or loss with respect
to these instruments; the relevance of factors such as
exchange-traded status of the instruments and the nature of the
underlying property to which they are linked; the degree, if
any, to which any income (including any mandated accruals)
recognized by
non-U.S.
holders should be subject to withholding tax; and whether these
instruments are or should be subject to the “constructive
ownership” regime. While the notice requests comments on
appropriate transition rules and effective dates, Treasury
regulations or other forms of guidance, if any, issued after
consideration of these issues could materially and adversely
affect the tax consequences of an investment in the PLUS,
possibly on a retroactive basis. Both U.S. and
non-U.S.
investors considering an investment in the PLUS should consult
their tax advisers regarding the notice and its potential
implications for an investment in the PLUS.
|
Other
Risk Factors
|
|
|
|
n
|
Secondary trading may be limited.
The PLUS will not be
listed on any securities exchange and secondary trading may be
limited, and the inclusion of commissions and projected profit
from hedging in the original issue price is likely to
|
February
2008
P-9
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
|
|
|
|
|
adversely affect secondary market prices and you could receive
less, and possibly significantly less, than the stated principal
amount per PLUS if you try to sell your PLUS prior to maturity.
|
|
|
|
|
n
|
Potential adverse economic interest of the calculation
agent.
The hedging or trading activities of the issuer, the
agent, or any of their respective affiliates, on or prior to the
trade date and prior to maturity could adversely affect the
price of the underlying shares and, as a result, could decrease
the amount an investor may receive on the PLUS at maturity. Any
of these hedging or trading activities on or prior to the trade
date could potentially affect the initial share price and,
therefore, could increase the price at which the underlying
shares must close before an investor receives a payment at
maturity that exceeds the issue price of the PLUS. Additionally,
such hedging or trading activities during the term of the PLUS,
including on the valuation date, could potentially affect the
price of the underlying shares on the valuation date and,
accordingly, the amount of cash an investor will receive at
maturity.
|
February
2008
P-10
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
Information
about the Underlying Shares
The
iShares
®
MSCI EAFE Index Fund
The
iShares
®
MSCI EAFE Index Fund is an exchange-traded fund managed by
iShares
®
,
Inc. (
iShares
), a registered investment company. iShares
consists of numerous separate investment portfolios, including
the
iShares
®
MSCI EAFE Index Fund. This fund seeks investment results that
correspond generally to the price and yield performance, before
fees and expenses, of the MSCI EAFE
Index
®
.
Information provided to or filed with the Commission by iShares
pursuant to the Securities Act of 1933 and the Investment
Company Act of 1940 can be located by reference to Commission
file numbers
033-97598
and
811-09102,
respectively, through the Commission’s website at
http://www.sec.gov. In addition, information may be obtained
from other sources including, but not limited to, press
releases, newspaper articles and other publicly disseminated
documents. Neither we nor the Agent make any representation or
warranty as to the accuracy or completeness of such information.
This pricing supplement relates only to the PLUS offered
hereby and does not relate to the underlying shares. We have
derived all disclosures contained in this pricing supplement
regarding iShares from the publicly available documents
described in the preceding paragraph. In connection with the
offering of the PLUS, neither we nor the agent has participated
in the preparation of such documents or made any due diligence
inquiry with respect to iShares. Neither we nor the agent makes
any representation that such publicly available documents or any
other publicly available information regarding iShares is
accurate or complete. Furthermore, we cannot give any assurance
that all events occurring prior to the date hereof (including
events that would affect the accuracy or completeness of the
publicly available documents described in the preceding
paragraph) that would affect the trading price of the underlying
shares (and therefore the price of the underlying shares at the
time we priced the PLUS) have been publicly disclosed.
Subsequent disclosure of any such events or the disclosure of or
failure to disclose material future events concerning iShares
could affect the value received at maturity with respect to the
PLUS and therefore the trading prices of the PLUS.
Neither we, the Agent nor any of our affiliates makes any
representation to you as to the performance of the underlying
shares.
We, the agent, and/or or any of our respective affiliates may
presently or from time to time engage in business with iShares.
In the course of such business, we, the agent, and/or our
respective affiliates may acquire non-public information with
respect to iShares, and neither we, the agent, and/or our
respective affiliates undertake to disclose any such information
to you. In addition, one or more of our affiliates may publish
research reports with respect to the underlying shares. The
statements in the preceding two sentences are not intended to
affect the rights of investors in the PLUS under the securities
laws. As a prospective purchaser of the PLUS, you should
undertake an independent investigation of iShares as in your
judgment is appropriate to make an informed decision with
respect to an investment in the underlying shares.
iShares
®
is a registered mark of Barclays Global Investors, N.A.
(
BGI
). The PLUS are not sponsored, endorsed, sold, or
promoted by BGI. BGI makes no representations or warranties to
the owners of the PLUS or any member of the public regarding the
advisability of investing in the PLUS. BGI has no obligation or
liability in connection with the operation, marketing, trading
or sale of the PLUS.
The
MSCI EAFE
Index
®
The MSCI EAFE Index is calculated, published and disseminated
daily by Morgan Stanley Capital International Inc., or
MSCI
®
,
a majority-owned subsidiary of Morgan Stanley, and comprises the
equity securities underlying the MSCI indices of 21 selected
countries in Europe and Asia, as well as Australia and New
Zealand. See “Annex A — Underlying Indices
and Underlying Index Publishers Information — The MSCI
EAFE
Index
®
”
in the accompanying product supplement no. 3.
February
2008
P-11
PLUS based on
the
iShares
®
MSCI EAFE Index Fund due March 20, 2009
Issued by
EKSPORTFINANS ASA
Performance
Leveraged Upside
Securities
SM
Historical
Information
The following table presents the published high, low and
end-of-quarter
closing share prices for each quarter in the period from
January 1, 2003 through February 22, 2008. The closing
share price on Febuary 22, 2008 was $71.69. The issuer obtained
the closing share prices and other information below from
Bloomberg Financial Markets, without independent verification.
You should not take the historical closing share prices as an
indication of future performance.
|
|
|
|
|
|
|
|
|
iShares
®
MSCI EAFE Index Fund
|
|
High
|
|
Low
|
|
Period
End
|
|
|
|
2003
|
|
|
|
|
|
|
|
First Quarter
|
|
34.1500
|
|
28.8133
|
|
30.2000
|
|
Second Quarter
|
|
37.7700
|
|
30.6700
|
|
36.1033
|
|
Third Quarter
|
|
40.3833
|
|
36.0667
|
|
39.0000
|
|
Fourth Quarter
|
|
45.5933
|
|
40.2167
|
|
45.5933
|
|
2004
|
|
|
|
|
|
|
|
First Quarter
|
|
48.1000
|
|
45.1167
|
|
47.2000
|
|
Second Quarter
|
|
48.1000
|
|
43.3833
|
|
47.6667
|
|
Third Quarter
|
|
47.4033
|
|
44.4667
|
|
47.1333
|
|
Fourth Quarter
|
|
53.4167
|
|
47.1333
|
|
53.4167
|
|
2005
|
|
|
|
|
|
|
|
First Quarter
|
|
55.2500
|
|
51.2567
|
|
52.9567
|
|
Second Quarter
|
|
53.8333
|
|
51.2767
|
|
52.3900
|
|
Third Quarter
|
|
58.4800
|
|
51.9500
|
|
58.1000
|
|
Fourth Quarter
|
|
60.9400
|
|
54.7200
|
|
59.4300
|
|
2006
|
|
|
|
|
|
|
|
First Quarter
|
|
65.3800
|
|
60.3300
|
|
64.9200
|
|
Second Quarter
|
|
70.5800
|
|
59.4600
|
|
65.3900
|
|
Third Quarter
|
|
68.3600
|
|
61.7000
|
|
67.7500
|
|
Fourth Quarter
|
|
74.3300
|
|
67.9400
|
|
73.2200
|
|
2007
|
|
|
|
|
|
|
|
First Quarter
|
|
76.7200
|
|
70.9000
|
|
76.2600
|
|
Second Quarter
|
|
81.7800
|
|
76.5000
|
|
80.7700
|
|
Third Quarter
|
|
83.6200
|
|
73.9400
|
|
82.5900
|
|
Fourth Quarter
|
|
86.1000
|
|
78.2400
|
|
78.5000
|
|
2008
|
|
|
|
|
|
|
|
First Quarter (through February 22, 2008)
|
|
78.3500
|
|
68.3400
|
|
71.6900
|
February
2008
P-12
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