PRINCIPAL PROTECTED NOTES

1. PRINCIPAL PROTECTED NOTES Ping Hu Matt Neeve Olena Olenchuk

2. Principal Protected Notes - what are they? • An investment that guarantees a percentageof the principle at maturity i.e. the minimum return will equal the initial investment • Payoff at maturity - no coupons, principal + appreciation

3. Principal Protected Notes - what are they? • Principal protection • High growth potential • Enhanced income potential • Weekly liquidity • The opportunity to invest in a broad range of investments • Potential for leveraged returns • Capital protection regardless of what happens in the markets • Maturity 6-8 years

4. Principal Protected Notes - what are they? Benefits to the Issuer: • Liquidity • Financial leverage • “Callability” strategy – reduced debt when needed

5. Global Equity Index Linked Note • Issued by the Business Development Bank of Canada • Variable interest promissory • Equally weighted in three indexes: S&P 500 Dow Jones ERUO STOXX 50 Nikkei 225

6. Global Equity Index Linked Note • Dec 2000 issues – minimum issue of 10 million dollars with a 7- year maturity. • Each note is valued at 10 dollars (at the time of issue) Risks: • Market Risk • Inflation Risk

7. A portfolio of 5 Basketsof shares Each Basket consists of3 shares, equally-weighted within the Basket. Note term is 7 years Global Blue-Chip RainbowDeposit Notes, Series 1

8. Global Blue-Chip RainbowDeposit Notes, Series 1 • The return is linked to the performance of the portfolio • Amounts payable at the maturity consist of • The principal amount - $100/note regardlessof the portfolio performance • Variable interest – 100 * portfolio return • The Deposit Notes will not be listed on any exchange • Tax consideration

9. Global Blue-Chip RainbowDeposit Notes, Series 1

10. Linked to Nikkei 255 Index – Tokyo Stock Exchange, Japan Note term - 7 years $100 denominated Minimum subscription - 50 Not listed - trade on secondary markets Callable if Index Return equals or exceeds applicable Call Trigger Call feature – risk 2006 – 2007 Index Return 3.06% Nikkei 225 Index Note, Series 1

11. Nikkei 225 Index Note, Series 1

12. Nikkei 225 Index Note, Series 1 Index Performance

13. Nikkei 225 Index Note, Series 1 Nikkei 225 vs. S&P 500, Dow and NASDAQ

14. Principal Protected Notes Risks: • Suitability of Deposit Notes for Investment • Non-Conventional Investment • No Interest May Be Payable • No Ownership of, or Recourse to, Shares • Equity Risk • Secondary Market • Market Disruption or Extraordinary Event • Special Circumstances – Market disruption • Economic and Regulatory Issues

15. PPNs - Who would use them? • Risk adverse investors that want to protect their investment, but still capitalize on positive changes in the market. • Investors that are confident in the market, but still believe that there is speculation

16. Questions?