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The international stock markets have been moving sideways for some time now. Notwithstanding the highly volatile oil prices, the U.S. elections and other important events on the global political stage, the markets have continued to display a consistently moderate development. The Silvester Bond to be issued by WestLB is designed to offer investors an attractive opportunity to benefit even from such a sideways development in the markets. The bond matures on January 21, 2008. The offer period starts today and ends on January 14, 2005. 

The Silvester Bond is a capital guaranteed bond based on a stock basket comprising 20 stocks (Air Liquide S.A., Ajinomoto Co. Inc., Cadbury Schweppes plc., Chevron Texaco Corp., Colgate-Palmolive Company, Exxon Mobil Corp. Fannie Mae, Henkel KGaA Vz., Honda Motor Co. Ltd., Kao Corp., Kerry Group plc., Kimberly-Clark Corp., L’Orèal S.A., Nestlé S.A., Novartis AG, Solvay S.A., Unilever N.V., Unocal Corp.). A corridor will be fixed for each stock contained in the basket. The corridor will be defined by a lower reference value of 75% and an upper reference value of 125% of the relevant initial values. The latter will be determined on January 18, 2005 (record date).

If the market prices of the stocks contained in the basket continue to move sideways within the corridor, investors will earn the maximum interest rate of 7% p.a. The maximum interest rate will decrease by 1% for each stock moving outside the defined corridor (i.e. trading either above the upper reference value or below the lower reference value). Assuming, for example, that three stocks trade outside the defined corridor on one or more days, 4% interest p.a. will be paid for the relevant interest period (7%-3%=  4%).   

The Silvester Bond will be listed on the Frankfurt and Stuttgart (EUWAX) Stock Exchanges (“Freiverkehr”).