New additions to the National Bank family of Blue Chip Notes

Montreal, 12 February 2007 - 

National Bank today announced changes to its line-up of Blue Chip Notes. The new features are intended to meet the needs of investors looking to reduce their portfolio exposure to the Canadian market, which is heavily weighted in the energy, materials and financial services sectors.

In addition to benefiting from 100% principal protection and unlimited potential return at maturity,1 investors can enhance their sector diversification with the Canadian Blue Chip III Note or increase their exposure to global growth with the Global Blue Chip II Note or the Euro-Pacific Blue Chip II Note.

Here’s how National Bank has improved its three Blue Chip Notes with 8-year terms:

  • The Canadian Blue Chip III Note now offers broader sector diversification by investing in health care and being underweighted in energy and materials versus the S&P/TSX composite index.
  • The holdings of the Global Blue Chip II Note have been reduced from 30 to 20 stocks so that the Note’s Canadian weighting more closely resembles Canadian representation in the MSCI World index.2 With only one Canadian security (5% of the portfolio), the Global Blue Chip II Note now better reflects Canadian stock market capitalization (3% to 4%) in relation to the benchmark index. The Note is also more aligned with its benchmark index in terms of sector diversification.
  • The Euro-Pacific Blue Chip II Note has eight new securities, making its sector and geographic diversification similar to that of its benchmark, the MSCI-EAFE index.3

The reference portfolio of each National Bank Blue Chip Note is composed of 20 equally weighted securities (5% each). This weighting is reset with each new issue in order to maintain the initial diversification. No management fees apply to the Notes.4

On sale between February 1, 2007 to March 2, 2007 with a minimum investment of $1,000, National Bank Blue Chip Notes qualify for Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs) and Registered Education Savings Plans (RESPs). They can be sold before maturity under normal market conditions and subject to early trading charges.

The Notes can be purchased at National Bank branches,5 from National Bank Financial at 1‑800‑361‑8838 (toll free) or 514‑879‑2222, from National Bank Direct Brokerage at 1‑800‑363‑3511 (toll free) or 514‑866‑6755, and through investment advisors and financial planners across Canada.   

Notes:
If National Bank of Canada does not exercise its early call for redemption right four years after the issue date at a price of $146.41 per Deposit Note, namely a 46.41% premium with respect of the Initial Amount representing, on the Early Call Redemption Day, an annual compounded rate of return of approximately 10.00%.; Under such circumstances, the investor may not be able to participate fully in the appreciation of the value of the Reference Portfolio Return that might have occurred up to the Early Call for Redemption Day.
2  Morgan Stanley Capital International World
3  Morgan Stanley Capital International Europe, Australasia and Far East
4  No management fees pertaining to the benchmark portfolios are applicable.  Dividends will not be reinvested in the benchmark portfolios.
5  The Euro-Pacific Blue Chip II Note cannot be purchased at National Bank branches.

This document is for information purposes only and does not constitute an offer or a solicitation to buy the notes referred to herein. The Blue Chip Notes are principal-protected investment redeemable at maturity. Variation in the benchmark portfolio, which corresponds to the variation in the portfolio return, will have a direct impact on the return payable. It is thus possible that no return will be paid. An investment in the Notes is subject to a number of risk factors. An Information Statement, which contains the complete information (including risk factors, fees and possible lack of liquidity) relating to each issue of Notes, is available upon request and will be sent to the investors prior to the closing date. Notes can be bought and sold on a secondary market maintained by National Bank Financial under normal market conditions. Any sale in the secondary market may be made at a price less than the principal amount, and may be subject to early trading fees. Potential purchasers should consult the Information Statement before investing in the Notes.

About National Bank of Canada
National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has more than $116 billion in assets and, together with its subsidiaries, employs 16,972 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website at
www.nbc.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives):                    

Denis Dubé
Director – Public Relations
National Bank of Canada
Tel.: (514) 394-8644