National Grid 2008 Annual Report Download - page 116

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 11903
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 20
Description: EXH 2(B).5.1
0/1499.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/499/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 11903
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 20 Description: EXH 2(B).5.1
0/1499.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/499/1*
Factors which are material for the purpose of assessing the market risks associated with Instruments issued under
the Programme
Instruments may not be a suitable investment for all investors
Each potential investor in any Instruments must determine the suitability of that investment in li
g
ht of its own circumstances. In
particular, each potential investor should:
Some Instruments are complex financial instruments and such instruments may be purchased as a way to reduce risk or
enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should
not invest in Instruments which are complex financial instruments unless it has the expertise (either alone or with the help of a
financial adviser) to evaluate how the Instruments will perform under chan
g
in
g
conditions, the resultin
g
effects on the value of
such Instruments and the impact this investment will have on the potential investor’s overall investment portfolio.
Risks related to the structure of a particular issue of Instruments
A wide ran
g
e of Instruments may be issued under the Pro
g
ramme. A number of these Instruments may have features which
contain particular risks for potential investors. Set out below is a description of certain such features:
Instruments subject to optional redemption by the Issuer
An optional redemption feature is likely to limit the market value of Instruments. Durin
g
any period when the Issuer may elect to
redeem Instruments, the market value of those Instruments
g
enerally will not rise substantially above the price at which they
can be redeemed. This also may be true prior to any redemption period.
The Issuer may be expected to redeem Instruments when its cost of borrowin
g
is lower than the interest rate on the
Instruments. At those times, an investor
g
enerally would not be able to reinvest the redemption proceeds at an effective interest
rate as hi
g
h as the interest rate on the Instruments bein
g
redeemed and may only be able to do so at a si
g
nificantly lower rate.
Potential investors should consider reinvestment risk in light of other investments available at that time.
20
(i) have sufficient knowled
g
e and experience to make a meanin
g
ful evaluation of the relevant Instruments, the merits and
risks of investin
g
in the relevant Instruments and the information contained or incorporated by reference in this Prospectus
or any applicable supplement;
(ii) have access to, and knowled
g
e of, appropriate analytical tools to evaluate, in the context of its particular financial
situation, an investment in the relevant Instruments and the impact such investment will have on its overall investment
portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the relevant Instruments,
includin
g
where principal or interest is payable in one or more currencies, or where the currency for principal or interest
p
a
y
ments is different from the
p
otential investor’s currenc
y
;
(iv) understand thorou
g
hly the terms of the relevant Instruments and be familiar with the behaviour of any relevant indices and
financial markets; and
(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and
other factors that ma
y
affect its investment and its abilit
y
to bear the a
pp
licable risks.