Term sheet
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Term Sheet to
Product Supplement No. 144-A-I Registration Statement No. 333-155535 Dated March 11, 2009; Rule 433 |
Structured |
JPMorgan
Chase & Co. $ Quarterly Review Notes Linked to the iShares® MSCI Emerging Markets Index Fund due September 23, 2009 |
General
Key Terms
Index Fund: |
The iShares® MSCI Emerging Markets Index Fund (the Index Fund) |
Automatic Call: |
If the closing price of one share of the Index Fund on any Review Date is greater than or equal to the Trigger Price, the notes will be automatically called for a cash payment per note that will vary depending on the applicable Review Date and call premium. |
Trigger Price: |
80% of the Initial Share Price for the first Review Date. 90% of the Initial Share Price for the final Review Date. |
Payment if Called: |
For every $1,000 principal amount note, you will receive one payment of $1,000 plus a call premium calculated as follows:
*The actual percentage applicable to the first and final Review Dates will be determined on the pricing date but will not be less than 7.00% and 14.00%, respectively. |
Payment at Maturity: |
If the notes are not called and a mandatory redemption is not triggered, you will lose 1.1111% of the principal amount of your notes for every 1% that the closing price of one share of the Index Fund declines beyond the Initial Share Price minus the buffer of 10%. In these circumstances, your payment at maturity per $1,000 principal amount note will be calculated as follows: $1,000 + [$1,000 x (Share Return + 10%) x 1.1111] Assuming the notes are not called, you will lose some or all of your investment at maturity. |
Buffer Amount: |
10% |
Share Return: |
Final Share Price Initial Share Price |
Initial Share Price: |
The closing price of one share of the Index Fund on the pricing date, divided by the Share Adjustment Factor. |
Final Share Price: |
The closing price of one share of the Index Fund on the final Review Date. |
Review Dates: |
June 18, 2009 (first Review Date) and September 18, 2009 (final Review Date). |
Share Adjustment Factor: |
Set equal to 1.0 on the pricing date and subject to adjustment under certain circumstances. See Description of Notes Payment at Maturity and General Terms of Notes Anti-Dilution Adjustments in the accompanying product supplement 144-A-I for further information about these adjustments. |
Maturity Date: |
September 23, 2009 |
CUSIP: |
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Subject to postponement in the event of a market disruption event and as described under Description of Notes Payment at Maturity or Description of Notes Automatic Call, as applicable, in the accompanying product supplement no. 144-A-I. |
Investing in the Quarterly Review Notes involves a number of risks. See Risk Factors beginning on page PS-6 of the accompanying product supplement no. 144-A-I and Selected Risk Considerations beginning on page TS-3 of this term sheet.
JPMorgan Chase & Co. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this term sheet relates. Before you invest, you should read the prospectus in that registration statement and the other documents relating to this offering that JPMorgan Chase & Co. has filed with the SEC for more complete information about JPMorgan Chase & Co. and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, JPMorgan Chase & Co., any agent or any dealer participating in this offering will arrange to send you the prospectus, the prospectus supplement, product supplement no. 144-A-I and this term sheet if you so request by calling toll-free 866-535-9248.
You may revoke your offer to purchase the notes at any time prior to the time at which we accept such offer by notifying the applicable agent. We reserve the right to change the terms of, or reject any offer to purchase, the notes prior to their issuance. In the event of any changes to the terms of the notes, we will notify you and you will be asked to accept such changes in connection with your purchase. You may also choose to reject such changes in which case we may reject your offer to purchase.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy or the adequacy of this term sheet or the accompanying prospectus supplement and prospectus. Any representation to the contrary is a criminal offense.
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Price to Public |
Fees and Commissions (1) |
Proceeds to Us |
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Per note |
$ |
$ |
$ |
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Total |
$ |
$ |
$ |
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(1) | Please see Supplemental Plan of Distribution in this term sheet for information about fees and commissions. |
The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank. The notes are not guaranteed under the Federal Deposit Insurance Corporations Temporary Liquidity Guarantee Program.
JPMorgan
March 11, 2009
You should read this term sheet together with the prospectus dated November 21, 2008, as supplemented by the prospectus supplement dated November 21, 2008 relating to our Series E medium-term notes of which these notes are a part, and the more detailed information contained in product supplement no. 144-A-I dated March 11, 2009. This term sheet, together with the documents listed below, contains the terms of the notes and supersedes all other prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth in Risk Factors in the accompanying product supplement no. 144-A-I, as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
Product supplement no.
144-A-I dated March 11, 2009:
[LINK TO BE INCLUDED]
Prospectus
supplement dated November 21, 2008:
http://www.sec.gov/Archives/edgar/data/19617/000089109208005661/e33600_424b2.pdf
Our Central Index Key, or CIK, on the SEC website is 19617. As used in this term sheet, the Company, we, us or our refers to JPMorgan Chase & Co.
Supplemental Terms of the Notes
The description of the payment at maturity on the notes as set forth in this term sheet differs from the description of the payment at maturity as set forth in the accompanying product supplement no. 144-A-I. For purposes of this offering, for every $1,000 principal amount note, if the notes are not automatically called, you will receive at maturity a variable amount that is less than the $1,000 principal amount, depending on how much the closing price of one share of the Index Fund declines, as compared to the Initial Share Price, beyond 10% on the final Review Date.
Accordingly, for purposes of these notes, you should refer to the description of the payment at maturity as set forth in this term sheet, which supersedes the section entitled Key Terms Payment at Maturity (Notes with a Buffer) on the cover page and the section entitled Description of Notes Payment at Maturity Notes with a Buffer on PS-4 of the accompanying product supplement no. 144-A-I.
Hypothetical Examples of Amounts Payable upon Automatic Call or at Maturity
The following table illustrates the hypothetical simple total return (i.e., not compounded) on the notes that could be realized on the applicable Review Date for a range of movements in the closing price of one share of the Index Fund as shown under the column Closing Price Appreciation/Depreciation at Review Date. The following table assumes an Initial Share Price of $22.00 and a hypothetical Trigger Price of $17.60 on the first Review Date and a hypothetical Trigger Price of $19.80 on the final Review Date. The table assumes that the percentages used to calculate the call price applicable to the first and final Review Dates are 7.00% and 14.00%, respectively, regardless of the appreciation of the closing price of one share of the Index Fund, which may be significant; the actual percentages will be determined on the pricing date. There will be only one payment on the notes whether called or at maturity. An entry of N/A indicates that the notes would not be called on the applicable Review Date and no payment would be made for such date. The hypothetical returns set forth below are for illustrative purposes only and may not be the actual total returns applicable to a purchaser of the notes.
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Closing Price |
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Appreciation / |
Total Return at |
Total Return at |
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Depreciation at |
First |
Final |
Closing Price |
Review Date |
Review Date |
Review Date |
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$39.600 |
80% |
7.00% |
14.00% |
$37.400 |
70% |
7.00% |
14.00% |
$35.200 |
60% |
7.00% |
14.00% |
$33.000 |
50% |
7.00% |
14.00% |
$30.800 |
40% |
7.00% |
14.00% |
$28.600 |
30% |
7.00% |
14.00% |
$26.400 |
20% |
7.00% |
14.00% |
$24.200 |
10% |
7.00% |
14.00% |
$22.000 |
0% |
7.00% |
14.00% |
$21.9780 |
-0.1% |
7.00% |
14.00% |
$20.900 |
-5% |
7.00% |
14.00% |
$19.800 |
-10% |
7.00% |
14.00% |
$18.700 |
-15% |
7.00% |
-5.56% |
$17.600 |
-20% |
7.00% |
-11.11% |
$15.400 |
-30% |
N/A |
-22.22% |
$13.200 |
-40% |
N/A |
-33.33% |
$11.000 |
-50% |
N/A |
-44.44% |
$8.800 |
-60% |
N/A |
-55.56% |
$6.600 |
-70% |
N/A |
-66.67% |
$4.400 |
-80% |
N/A |
-77.78% |
$2.200 |
-90% |
N/A |
-88.89% |
$0.000 |
-100% |
N/A |
-100.00% |
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JPMorgan
Structured Investments |
TS-1 |
The following examples illustrate how the total returns set forth in the table on the previous page are calculated.
Example 1: The closing price of one share of the Index Fund decreases from the Initial Share Price of $22.00 to a closing price of $20.90 on the first Review Date. Because the closing price of one share of the Index Fund on the first Review Date of $20.90 is greater than the corresponding Trigger Price of $17.60, the notes are automatically called, and the investor receives a single payment of $1,070 per $1,000 principal amount note.
Example 2: The closing price of one share of the Index Fund decreases from the Initial Share Price of $22.00 to a closing price of $13.20 on the first Review Date and $19.80 on the final Review Date. Because (a) the closing price of one share of the Index Fund on the first Review Date ($13.20) is less than the corresponding Trigger Price of $17.60, and (b) the closing price of one share of the Index Fund on the final Review Date ($19.80) is equal to the corresponding Trigger Price of $19.80, the notes are automatically called on the final Review Date, and the investor receives a single payment of $1,140 per $1,000 principal amount note.
Example 3: The closing price of one share of the Index Fund decreases from the Initial Share of $22.00 to a closing price of $15.40 on the first Review Date and $17.60 on the final Review Date. Because the closing price of one share of the Index Fund on each of the first Review Date ($15.40) and the final Review Date ($17.60) is less than the corresponding Trigger Price of $17.60 and $19.80, respectively, the notes are not automatically called and the investor receives a payment at maturity that is less than the principal amount for each $1,000 principal amount note, calculated as follows:
$1,000 + [$1,000 x (-20% + 10%) x 1.1111] = $888.89
Selected Purchase Considerations
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JPMorgan
Structured Investments |
TS-2 |
An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Index Fund, the Underlying Index or any of the equity securities held by the Index Fund or included in the Underlying Index. These risks are explained in more detail in the Risk Factors section of the accompanying product supplement no. 144-A-I dated March 11, 2009.
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JPMorgan
Structured Investments |
TS-3 |
Historical Information
The following graph sets forth the historical performance of the Index Fund based on the weekly closing price of one share of the Index Fund from January 2, 2004 through March 6, 2009. The closing price of one share of the Index Fund on March 10, 2009 was $22.37. We obtained the closing prices of the Index Fund below from Bloomberg Financial Markets. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg Financial Markets. The historical prices of the Index Fund should not be taken as an indication of future performance, and no assurance can be given as to the closing price of one share of the Index Fund on any Review Date. We cannot give you assurance that the performance of the Index Fund will result in the return of any of your initial investment.
Supplemental Plan of Distribution
JPMSI, acting as agent for JPMorgan Chase & Co., will receive a commission that will depend on market conditions on the pricing date. In no event will that commission, which includes structuring and development fees, exceed $15.00 per $1,000 principal amount note. See Plan of Distribution beginning on page PS-34 of the accompanying product supplement no. 144-A-I.
For a different portion of the notes to be sold in this offering, an affiliated bank will receive a fee and another affiliate of ours will receive a structuring and development fee. In no event will the total amount of these fees exceed $15.00 per $1,000 principal amount note.
An unaffiliated hedging agent may earn additional income as a result of arrangements to hedge our obligations under the notes.
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JPMorgan
Structured Investments |
TS-4 |