Wachovia Corporation
AMENDED ISSUER FREE WRITING PROSPECTUS
Preliminary Terms
Filed Pursuant to Rule 433
Registration Statement No. 333-141071
Dated August 9, 2007
$
Wachovia Corporation
% Enhanced Yield Securities
Reverse Exchangeable Securities with
Contingent Downside Protection
Linked to the Common Stock of Ford Motor Company
due June 5, 2008
|
|
|
Issuer:
|
|
Wachovia Corporation |
|
|
|
Underlying Stock Issuer:
|
|
Ford Motor Company |
|
|
|
Country in which Organized (if not U.S.):
|
|
N/A |
|
|
|
Underlying Stock:
|
|
Common Stock; CUSIP 345370860 |
|
|
|
Sole Underwriter:
|
|
Wachovia Capital Markets, LLC |
|
|
|
Principal Amount:
|
|
$1,000 |
|
|
|
Issue Price:
|
|
$1,000 |
|
|
|
Maturity Date:
|
|
June 5, 2008 |
|
|
|
Valuation Date:
|
|
May 29, 2008, as further described in the product supplement. |
|
|
|
Interest:
|
|
13.50% to 14.50% per annum (to be determined on the pricing date) payable
quarterly. |
|
|
|
Interest Payment Dates:
|
|
Quarterly beginning on December 5, 2007. |
|
|
|
Initial Stock Price:
|
|
$, the closing price of the Underlying Stock on the pricing date. |
|
|
|
Knock-in Price:
|
|
$, the price that is 30% below the initial stock price. |
|
|
|
Share Amount
|
|
|
|
|
|
Exchange Listing:
|
|
None |
|
|
|
Pricing Date:
|
|
, 2007 |
|
|
|
Expected Settlement Date:
|
|
, 2007 |
|
|
|
CUSIP Number:
|
|
|
|
|
|
Maximum Concession:
|
|
$ per security, as further described in the product supplement. |
|
|
|
|
|
|
|
|
|
|
|
Per Security |
|
|
Total |
|
Public Offering Price |
|
$ |
|
|
|
$ |
|
|
Underwriting Discount and Commission |
|
$ |
|
|
|
$ |
|
|
Proceeds to Wachovia Corporation |
|
$ |
|
|
|
$ |
|
|
PS-1
ADDITIONAL INFORMATION
Wachovia has filed a registration statement (including a prospectus, as supplemented by a
prospectus supplement for the Enhanced Yield Securities, which we refer to as the Reverse
Exchangeable Securities with Contingent Downside Protection product supplement or the product
supplement) with the Securities and Exchange Commission, or SEC, for the offerings to which this
free writing prospectus relates. Before you invest, you should read these documents and any other
documents relating to the securities that Wachovia has filed with the SEC for more complete
information about Wachovia and this offering. You may obtain these documents for free from the SEC
web site at www.sec.gov. Our Central Index Key, or CIK, on the SEC Web site is 0000036995.
Alternatively, Wachovia will arrange to send you these documents if you so request by calling
1-888-215-4145 or 1-212-214-6282 and asking for the Investment Solutions Group.
You may access these documents on the SEC web site at www.sec.gov as follows:
|
|
|
Product Supplement dated August 8, 2007:
http://www.sec.gov/Archives/edgar/data/36995/000095014407007492/g08887b3e424b3.htm |
|
|
|
|
Prospectus dated March 5, 2007:
http://www.sec.gov/Archives/edgar/data/36995/000119312507046403/ds3asr.htm |
RISK FACTORS
The securities are riskier than ordinary debt securities. You should carefully consider
whether the securities are suited to your particular circumstances before you decide to purchase
them. In particular, you should read the section entitled Risk Factors in the product supplement
and consider all of the risks set forth below, in the product supplement and in the prospectus.
No guaranteed return of principal. With an investment in the securities, you bear the risk of
losing some or all of the value of your principal if a knock-in event occurs during the term of the
securities and the final stock price is less than the initial stock price. Under these
circumstances, at maturity, for each security you hold, the maturity payment amount that you will
receive will be shares of the Underlying Stock, which represents the number of shares of the
Underlying Stock equal to the share amount multiplied by the share multiplier. In these
circumstances, you will lose some or all of the value of the principal amount of your securities
and receive shares of the Underlying Stock instead of a cash payment.
Yield may be lower. The yield that you will receive on your securities, which could be negative,
may be less than the return you could earn on other investments. Even if your yield is positive,
your yield may be less than the yield you would earn if you bought a standard senior non-callable
debt security of Wachovia with the same maturity date.
Relationship to the Underlying Stock. You will have no rights against the Underlying Stock Issuer
even though the market value of the securities and the amount you will receive at maturity depend
on the performance of the Underlying Stock. The Underlying Stock Issuer is not involved in the
offering of the securities and has no obligations relating to the securities. In addition, you will
not receive any dividend payments or other distributions on the Underlying Stock, and as a holder
of the securities, you will not have voting rights or any other rights that holders of the
Underlying Stock may have.
No active trading market. The securities will not be listed or displayed on any securities
exchange, the Nasdaq National Market or any electronic communications network. There can be no
assurance that a liquid trading market will develop for the securities. The development of a
trading market for the securities will depend on our financial performance and other factors such
as the market price of the Underlying Stock. Even if a secondary market for the securities
develops, it may not provide significant liquidity and transaction costs in any secondary market
could be high.
Potential conflicts of interest. Wachovia or its affiliates may presently or from time to time
engage in business that may adversely affect the price of the securities, including hedging
activities. In addition, the inclusion of
PS-2
commissions and projected profits from hedging in the original issue price is likely to adversely
affect secondary market prices. In the course of business, Wachovia or its affiliates may acquire
non-public information relating to the Underlying Stock Issuer and, in addition, one or more
affiliates of Wachovia may publish research reports about the Underlying Stock Issuer. Wachovia
does not make any representation to any purchasers of the securities regarding any matters
whatsoever relating to the Underlying Stock Issuer.
SUPPLEMENTAL TAX CONSIDERATIONS
The following terms apply to the securities for U.S. Federal income tax purposes:
|
|
|
Interest Payment:
|
|
$ |
|
|
|
Put Option Payment:
|
|
$ |
|
|
|
Short-term Debt Instrument Treatment:
|
|
Applicable. The securities will be
subject to U.S. federal income tax
rules governing short-term debt
instruments. |
HYPOTHETICAL RETURNS
The following table illustrates the hypothetical maturity payment amount and corresponding
hypothetical return at maturity per security (in each case, including interest payments), for a
range of hypothetical final stock prices and the corresponding hypothetical price return of the
Underlying Stock and whether or not a knock-in event has occurred. The examples are based on the
following hypothetical terms:
|
|
|
a hypothetical initial stock price of $8.50; |
|
|
|
|
a hypothetical knock-in price of $5.95; |
|
|
|
|
an interest rate of 14.00%; and |
|
|
|
|
an investment term of 280 days. |
The figures below are for purposes of illustration only. The actual maturity payment amount
and the resulting return (inclusive of coupons) will depend on the actual final stock price and
whether or not a knock-in event occurs, each determined by the calculation agent as described in
this free writing prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A knock-in event has occurred |
|
A knock-in event has not occurred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hypothetical |
|
|
|
|
|
|
Hypothetical maturity |
|
Hypothetical return at |
|
Hypothetical maturity |
|
return at maturity |
|
|
Hypothetical price |
|
payment amount per |
|
maturity of the |
|
payment amount per |
|
of the securities |
Hypothetical final |
|
return of the |
|
security (including |
|
securities (including |
|
security (including |
|
(including |
stock price |
|
Underlying Stock |
|
interest) |
|
interest)(1) |
|
interest) |
|
interest)(1) |
$4.25 |
|
|
-50.00 |
% |
|
$ |
606.94 |
|
|
|
-39.31 |
% |
|
|
|
|
|
|
|
|
4.68 |
|
|
-45.00 |
|
|
|
656.94 |
|
|
|
-34.31 |
|
|
|
|
|
|
|
|
|
5.10 |
|
|
-40.00 |
|
|
|
706.94 |
|
|
|
-29.31 |
|
|
|
|
|
|
|
|
|
5.53 |
|
|
-35.00 |
|
|
|
756.94 |
|
|
|
-24.31 |
|
|
|
|
|
|
|
|
|
5.95 |
|
|
-30.00 |
|
|
|
806.94 |
|
|
|
-19.31 |
|
|
|
10.69 |
% |
|
$ |
1,106.94 |
|
6.38 |
|
|
-25.00 |
|
|
|
856.94 |
|
|
|
-14.31 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
6.80 |
|
|
-20.00 |
|
|
|
906.94 |
|
|
|
-9.31 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
7.23 |
|
|
-15.00 |
|
|
|
956.94 |
|
|
|
-4.31 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
7.65 |
|
|
-10.00 |
|
|
|
1,006.94 |
|
|
|
0.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
8.08 |
|
|
-5.00 |
|
|
|
1,056.94 |
|
|
|
5.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
8.50 |
|
|
0.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
8.93 |
|
|
5.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
PS-3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A knock-in event has occurred |
|
A knock-in event has not occurred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hypothetical |
|
|
|
|
|
|
Hypothetical maturity |
|
Hypothetical return at |
|
Hypothetical maturity |
|
return at maturity |
|
|
Hypothetical price |
|
payment amount per |
|
maturity of the |
|
payment amount per |
|
of the securities |
Hypothetical final |
|
return of the |
|
security (including |
|
securities (including |
|
security (including |
|
(including |
stock price |
|
Underlying Stock |
|
interest) |
|
interest)(1) |
|
interest) |
|
interest)(1) |
9.35 |
|
|
10.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
9.78 |
|
|
15.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
10.20 |
|
|
20.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
10.63 |
|
|
25.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
11.05 |
|
|
30.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
11.48 |
|
|
35.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
11.90 |
|
|
40.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
12.33 |
|
|
45.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
12.75 |
|
|
50.00 |
|
|
|
1,106.94 |
|
|
|
10.69 |
|
|
|
10.69 |
|
|
|
1,106.94 |
|
|
|
|
(1) |
|
The returns at maturity specified above are not annualized rates of return but rather actual
returns over the term of the security and, in the case of the securities, are calculated based
on a hypothetical 280 day investment term and, in the case of the Underlying Stock, do not
take into account dividends, if any, paid on the Underlying Stock or any transaction fees and
expenses. |
The following graph sets forth the return at maturity for a range of final stock prices both
if a knock-in event has occurred and if a knock-in event has not occurred.
Return Profile of % Enhanced Yield Securities vs. Ford Motor Company Stock Price*
|
|
|
* |
|
Assumes an interest rate of 14.00% per annum and a 280-day term. |
PS-4
THE UNDERLYING STOCK
The Underlying Stock Issuer
Provided below is a brief description of the Underlying Stock Issuer obtained from publicly
available information published by the Underlying Stock Issuer. Wachovia does not make any
representation to any purchasers of the securities regarding any matters whatsoever relating to the
Underlying Stock Issuer. Any prospective purchaser of the securities should undertake an
independent investigation of the Underlying Stock Issuer as in its judgment is appropriate to make
an informed decision regarding an investment in the securities.
Ford Motor Company (Ford) has disclosed that it sells cars and trucks throughout the world.
Substantially all of its cars, trucks and parts are marketed through retail dealers in North
America, and through distributors and dealers outside of North America, the substantial majority of
which are independently owned. In addition to the products Ford sells to its dealers for retail
sale, it also sells cars and trucks to its dealers for sale to fleet customers, including daily
rental car companies, commercial fleet customers, leasing companies and governments. In addition to
producing and selling cars and trucks, Ford also provides retail customers with after-the-sale
vehicle services and products through its dealer network and other channels, in areas such as
maintenance and light repair, heavy repair, collision, vehicle accessories and extended service
warranty. You should independently investigate the Underlying Stock Issuer and decide whether an
investment in the securities linked to the Underlying Stock is appropriate for you.
The Underlying Stock is registered under the Exchange Act. Companies with securities
registered under the Exchange Act are required to file periodically financial and other information
specified by the SEC. Information filed with the SEC can be inspected and copied at the Public
Reference Section of the SEC, Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Copies of this
material can also be obtained from the Public Reference Section, at prescribed rates. In addition,
information filed by the Underlying Stock Issuer with the SEC electronically can be reviewed
through a website maintained by the SEC. The address of the SECs website is http://www.sec.gov.
Information filed with the SEC by the Underlying Stock Issuer under the Exchange Act can be located
by reference to SEC file number 001-03950.
Information about the Underlying Stock may also be obtained from other sources such as press
releases, newspaper articles and other publicly disseminated documents, as well as from the
Underlying Stock Issuers website. We do not make any representation or warranty as to the accuracy
or completeness of any materials referred to above, including any filings made by the Underlying
Stock Issuer with the SEC.
Historical Data
The Underlying Stock is listed on the NYSE under the symbol F. The following table sets
forth the high intra-day, low intra-day and quarter-end closing prices for the Underlying Stock.
The information given below is for the four calendar quarters in each of 2004, 2005, and 2006, and
the first two calendar quarters in 2007. Partial data is provided for the third calendar quarter in
2007. On August 8, 2007, the closing price for the Underlying Stock was $8.87 per share. The
closing prices listed below were obtained from Bloomberg Financial Markets without independent
verification. The historical closing prices of the Underlying Stock should not be taken as an
indication of future performance, and no assurance can be given that the price of the Underlying
Stock will not decrease such that you would receive less than the principal amount of your
securities at maturity.
Quarterly High Intra-Day, Low Intra-Day and Quarter-End Closing Price of the Underlying Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-End |
|
|
|
|
High Intra-Day |
|
Low Intra-Day |
|
Closing Price |
Quarter-Start |
|
Quarter-End |
|
Price of the |
|
Price of the |
|
of the |
Date |
|
Date |
|
Underlying Stock |
|
Underlying Stock |
|
Underlying Stock |
01/01/2004 |
|
03/31/2004 |
|
$ |
17.34 |
|
|
$ |
12.75 |
|
|
$ |
13.57 |
|
04/01/2004 |
|
06/30/2004 |
|
|
16.48 |
|
|
|
13.00 |
|
|
|
15.65 |
|
07/01/2004 |
|
09/30/2004 |
|
|
15.77 |
|
|
|
13.61 |
|
|
|
14.05 |
|
10/01/2004 |
|
12/31/2004 |
|
|
15.00 |
|
|
|
12.61 |
|
|
|
14.64 |
|
PS-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-End |
|
|
|
|
High Intra-Day |
|
Low Intra-Day |
|
Closing Price |
Quarter-Start |
|
Quarter-End |
|
Price of the |
|
Price of the |
|
of the |
Date |
|
Date |
|
Underlying Stock |
|
Underlying Stock |
|
Underlying Stock |
01/01/2005 |
|
03/31/2005 |
|
|
14.75 |
|
|
|
10.94 |
|
|
|
11.33 |
|
04/01/2005 |
|
06/30/2005 |
|
|
11.69 |
|
|
|
9.07 |
|
|
|
10.24 |
|
07/01/2005 |
|
09/30/2005 |
|
|
11.19 |
|
|
|
9.55 |
|
|
|
9.86 |
|
10/01/2005 |
|
12/31/2005 |
|
|
10.00 |
|
|
|
7.57 |
|
|
|
7.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/01/2006 |
|
03/31/2006 |
|
|
8.96 |
|
|
|
7.39 |
|
|
|
7.96 |
|
04/01/2006 |
|
06/30/2006 |
|
|
8.05 |
|
|
|
6.17 |
|
|
|
6.93 |
|
07/01/2006 |
|
09/30/2006 |
|
|
9.48 |
|
|
|
6.06 |
|
|
|
8.09 |
|
10/01/2006 |
|
12/31/2006 |
|
|
9.19 |
|
|
|
6.85 |
|
|
|
7.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/01/2007 |
|
03/31/2007 |
|
|
8.97 |
|
|
|
7.43 |
|
|
|
7.89 |
|
04/01/2007 |
|
06/30/2007 |
|
|
9.70 |
|
|
|
7.67 |
|
|
|
9.42 |
|
07/01/2007 |
|
08/08/2007 |
|
|
9.64 |
|
|
|
7.90 |
|
|
|
8.87 |
|
RECENT DEVELOPMENTS
On May 31, 2007, Wachovia and A.G. Edwards, Inc. (A.G. Edwards) announced that they had
entered into an Agreement and Plan of Merger, dated May 30, 2007, that provides, among other
things, for A.G. Edwards to be merged with a wholly-owned subsidiary of Wachovia (the Merger). As
a result of the Merger, each outstanding share of A.G. Edwards common stock will be converted into
a right to receive 0.9844 shares of Wachovia common stock and $35.80 in cash.
The Merger is intended to be treated as a tax-free reorganization to Wachovia and A.G. Edwards
and otherwise tax free to A.G. Edwards shareholders, except to the extent they receive cash, and
is to be accounted for as a purchase. Consummation of the Merger is subject to various conditions,
including: (i) receipt of the approvals of A.G. Edwards shareholders; (ii) receipt of requisite
regulatory approvals, including approval of banking and securities regulatory authorities and the
expiration or termination of the waiting period under the Hart-Scott-Rodino Act; (iii) receipt of
legal opinions as to the tax treatment of the Merger; and (iv) listing on the New York Stock
Exchange, Inc., subject to notice of issuance, of Wachovias common stock to be issued in the
Merger.
SUPPLEMENTAL PLAN OF DISTRIBUTION
We expect to deliver the securities against payment on or about the third business day
following the pricing date.
PS-6