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Filed pursuant to Rule 433 | Registration Statement Nos. 333-162219 and
333-162219-01
RBS Exchange Traded Notes
RBS Global Big Pharma ETNs (DRGS)
RBS Global Big Pharma Exchange Traded Notes ("RBS ETNs") are unsecured and
senior obligations of The Royal Bank of Scotland plc ("RBS plc"), and are fully
and unconditionally guaranteed by The Royal Bank of Scotland Group plc ("RBS
Group"). Any payments on the RBS ETNs when they become due at maturity or upon
early repurchase or redemption are dependent on the ability of RBS plc and RBS
Group to pay, and are also subject to market risk.
The return on this RBS ETN is based on the performance of the NYSE Arca Equal
Weighted Pharmaceutical Total Return Index(SM) (Bloomberg symbol: "DGETR
INDEX") (the "Index").
The Index
Index Components: The Index comprises stocks and depository receipts of some of
the largest companies involved in various phases of development, production and
marketing of pharmaceuticals.
Equally Weighted: The Index is calculated using an equal-dollar weighting
methodology so that each of the component securities in the Index is
represented in approximately equal-dollar amounts. The Index component weights
are set to equal dollar amounts at each rebalancing. During the quarter, each
component's weight changes independently based on the price movements of each
respective component stock. In addition, the Index is a total return index,
which means that the level of the Index takes into account the cash dividends,
if any, paid on the Index components.
Quarterly Rebalancing: The Index portfolio is rebalanced every quarter after
the close of trading on the third Friday of March, June, September and
December.
Index Components(2) -- as of 06/30/2012
COMPANY WEIGHT (%) TICKER EXCHANGE
--- ---------------------------------------------- --------------------------
1. Merck and Co., Inc. 6.52 MRK NYSE
2. AstraZeneca plc(1) 6.50 AZN NYSE
3. Novo Nordisk A/S(1) 6.48 NVO NYSE
4. Sano[] 6.46 SNY NYSE
5. Bristol-Myers Squibb Company 6.38 BMY NYSE
6. Novartis AG(1) 6.31 NVS NYSE
7. Abbott Laboratories 6.26 ABT NYSE
8. Johnson and Johnson 6.23 JNJ NYSE
9. Eli Lilly and Company 6.21 LLY NYSE
10. P[]zer Inc. 6.18 PFE NYSE
11. Forest Laboratories, Inc. 6.17 FRX NYSE
12. GlaxoSmithKline plc(1) 6.15 GSK NYSE
13. Teva Pharmaceutical Industries Limited(1) 6.12 TEVA NASDAQ
14. Allergan, Inc. 6.10 AGN NYSE
15. Valeant Pharmaceuticals International, Inc.(1) 6.04 VRX NYSE
16. Shire plc 5.91 SHPGY NASDAQ
(1) Components are represented in the Index by their depositary receipts traded
on U.S. exchanges.
(2) Source: Bloomberg. The Index Components and Index Summary present actual
historical information on the NYSE Arca Equal Weighted Pharmaceutical Index(SM)
(the "Price Return Index"). The only difference between the Index and the Price
Return Index is that level of the Index incorporates the cash dividends paid on
the Index components. See also "Certain Key Terms" on the following page
Not FDIC Insured. May Lose Value.
RBS ETN Details
Issuer The Royal Bank of Scotland plc
---------------- --------------------------------------------
Guarantor The Royal Bank of Scotland
Group plc
---------------- --------------------------------------------
Ticker DRGS
---------------- --------------------------------------------
Intraday DRGS.IV
Indicative Value
Ticker
---------------- --------------------------------------------
Inception Date 10/21/2011
---------------- --------------------------------------------
CUSIP 78009P135
---------------- --------------------------------------------
ISIN US78009P1350
---------------- --------------------------------------------
Primary NYSE Arca
Exchange
---------------- --------------------------------------------
Maturity 10/25/2041
---------------- --------------------------------------------
Index NYSE Equal Weighted
Pharmaceutical Total Return
Index(SM) (Bloomberg symbol:
"DGETR INDEX")
---------------- --------------------------------------------
Annual Investor 0.60% per annum.
Fee
(accrued on a
daily basis)
---------------- --------------------------------------------
Repurchase at You may offer your RBS ETNs
your option to RBS plc for repurchase on
any business day on or prior to
10/17/2041, provided that you
offer a minimum of 20,000 RBS
ETNs for any single repurchase
and follow the procedures
described in the pricing
supplement.
---------------- --------------------------------------------
Early We may redeem all of the RBS
redemption at ETNs at our discretion at any
our option time on or prior to 10/23/2041.
---------------- --------------------------------------------
Daily Upon early repurchase or
Redemption redemption or at maturity, you
Value will receive a cash payment
equal to the daily redemption
value per RBS ETN. The daily
redemption value on the relevant
valuation date will be published
on www.rbs.com/etnUS/DRGS*.
---------------- --------------------------------------------
* Information contained on our website is not incorporated by
reference in, and should not be considered a part of, this
document.
Index Summary(2) -- as of 06/30/12
Number of 16
Components
-------------- --------------
Average Market
Cap $81.30 billion
-------------- --------------
P/E Ratio 13.21
-------------- --------------
P/B Ratio 2.77
-------------- --------------
Dividend Yield 2.96%
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To []nd out more
Call toll free 855-RBS-ETPS or visit www.rbs.com/etnUS
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Historical Performance (%) -- as of 06/30/2012
S and P 500([R]) Index (Price Return)
10.01
3.96 3.14
14.00
-1.95
3.24
Source: Bloomberg. The table above presents the actual historical performance
of the RBS ETNs, the Index, the NYSE Arca Equal Weighted Pharmaceutical
Index(SM) (the "Price Return Index") and the S and P 500([R]) Index (Price Return)
over the speci[]ed periods. The only difference between the Index and the Price
Return Index is that the level of the Index incorporates the cash dividends
paid on the Index components, while the Price Return Index does not. For
information regarding the performance of the Index, see pages PS-11 to PS-15 of
the pricing supplement of the RBS ETNs []led with the U.S. Securites and
Exchange Commisson (SEC). Past performance does not guarantee future results.
(1) Includes the deduction of the annual investor fee, which accrues on a daily
basis. The annual investor fee will be equal to 0.60% per annum.
Country Breakdown -- as of 06/30/2012
Historical Dividend Yield -- as of 06/30/2012
DIVIDEND YIELD DIVIDEND YIELD
COUNTRY COMPANIES YEAR NYSE PHARMA INDEX (%) S and P 500([R]) INDEX (%)
-------------- --------- ---- --------------------- ----------------------
6.25% United States 8 2003 1.69 1.66
6.25% United Kingdom 3 2004 1.78 1.63
6.25% Switzerland 1 2005 1.99 2.05
Denmark 1 2006 2.04 1.85
6.25%
50% France 1 2007 2.12 1.78
6.25% Israel 1 2008 2.99 2.39
Canada 1 2009 3.33 2.94
18.75% 2010 3.29 2.10
2011 3.39 1.94
2012 2.96 2.08
Source: Bloomberg. The chart and table above present the country of
incorporation of the companies which equity securities comprise the NYSE Arca
Equal Weighted Pharmaceutical Index(SM) (the "Price Return Index"). The Index
and the Price Return Index have identical components.
Source: Bloomberg. The table above presents the actual historical Dividend
Yield calculated based on the cash dividends paid on the component securities
of the NYSE Arca Equal Weighted Pharmaceutical Index(SM) (Price Return) and the
S and P 500([R]) Index (Price Return) over the prior 12 months ending on the last
trading day of March. Unlike total return indices, the levels of price return
indices do not incorporate any cash dividends paid on their index components.
See "Certain Key Terms" below for the calculation of the Dividend Yield.
CERTAIN RISK CONSIDERATIONS: The RBS ETNs involve risks not associated with an
investment in conventional debt securities, including a possible loss of some
or all of your investment. The level of the Index must increase by an amount
suf[]cient to offset the aggregate investor fee applicable to the RBS ETNs in
order for you to receive at least the principal amount of your investment back
at maturity or upon early repurchase or redemption. The Index comprises
securities of a limited number of companies concentrated in the pharmaceuticals
industry, and may not be representative of an investment that provides exposure
to the pharmaceutical industry as a whole. Liquidity of the market for RBS ETNs
may vary over time. The RBS ETNs are not principal protected and do not pay
interest. Any payment on the RBS ETNs is subject to the ability of RBS plc, as
the issuer, and RBS Group, as the guarantor, to pay their respective
obligations when they become due. You should carefully consider whether the RBS
ETNs are suited to your particular circumstances before you decide to purchase
them. We urge you to consult with your investment, legal, accounting, tax and
other advisors with respect to any investment in the RBS ETNs.
The RBS ETNs are not suitable for all investors. You should carefully read the
relevant pricing supplement and prospectus, including the more detailed
explanation of the risks involved in any investment in the RBS ETNs as
described in the "Risk Factors" section of the pricing supplement, before
investing.
CERTAIN KEY TERMS: The P/E Ratio, P/B Ratio and Dividend Yield information are
sourced from Bloomberg. P/E Ratio is derived by dividing the closing level of
the Price Return Index as of the speci[]ed date by the sum of the trailing
12-month earnings per share of the securities comprising the Price Return
Index. P/B Ratio is derived by dividing the closing level of the Price Return
Index as of the speci[]ed date by the sum of the book value per share of the
securities comprising the Price Return Index as of that date. Dividend Yield
means the sum of the gross dividends paid on the securities comprising the
Price Return Index over the prior 12 months divided by the closing level of the
Price Return Index as of the speci[]ed date; however, unlike the Index (which
is a total return index), the level of the Price Return Index does not
incorporate cash dividends paid on its components.
IMPORTANT INFORMATION: RBS plc and RBS Group have []led a registration
statement (including a prospectus) with the U.S. Securities and Exchange
Commission (SEC) for the offering of RBS ETNs to which this communication
relates. Before you invest in any RBS ETNs, you should read the prospectus in
that registration statement and other documents that have been []led by RBS plc
and RBS Group with the SEC for more complete information about RBS plc and RBS
Group, and the offering. You may get these documents for free by visiting EDGAR
on the SEC's web site at www.sec.gov. Alternatively, RBS plc, RBS Securities
Inc. (RBSSI) or any dealer participating in the offering will arrange to send
you the prospectus and the pricing supplement at no charge if you request it by
calling 1-855-RBS-ETPS (toll-free).
The NYSE Arca Equal Weighted Pharmaceutical Index(SM)[]and the NYSE Arca Equal
Weighted Pharmaceutical Total Return Index(SM)[]are service marks[]of NYSE
Euronext or its af[]liates (NYSE Euronext) and have been licensed for use by
The Royal Bank of Scotland plc and RBS Securities, Inc. (Licensees) in
connection with[]the RBS ETNS. Neither the Licensees nor the RBS ETNs is
sponsored, endorsed, sold or promoted by NYSE Euronext. NYSE Euronext makes no
representations or warranties regarding the[]RBS ETNs or the ability of the
NYSE Arca Equal Weighted Pharmaceutical Index(SM)[]or the[]NYSE Arca Equal
Weighted Pharmaceutical Total Return Index(SM) to track general stock market
performance. NYSE EURONEXT MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY
EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE NYSE ARCA EQUAL WEIGHTED PHARMACEUTICAL INDEX(SM)[]OR THE NYSE
ARCA EQUAL WEIGHTED PHARMACEUTICAL TOTAL RETURN INDEX(SM)[]OR ANY DATA INCLUDED
THEREIN. IN NO EVENT SHALL NYSE EURONEXT HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Copyright [C] 2012 RBS Securities Inc. All rights reserved. RBS Securities
Inc., a U.S. registered broker-dealer, member of FINRA and SIPC, is an indirect
wholly-owned subsidiary of The Royal Bank of Scotland plc.
www.rbs.com/etnUS | TOLL FREE: 855-RBS-ETPS | Not FDIC Insured. May Lose Value. Dated July 3, 2012
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