<table><tr><th>From:</th><th>jeffrey E. &lt;jeevacation@gmail.com&gt;</th></tr><tr><td>Sent:</td><td>Monday, November 9, 2015 9:28 PM</td></tr><tr><td>To:</td><td>Richard Kahn</td></tr><tr><td>Subject:</td><td>Re: Royal Bank of Scotland 7.64% Fixed-to-Float Pfd</td></tr></table>

5 million

On Mon, Nov 9, 2015 at 10:25 PM, Richard Kahn <██████████████████████ <mailto:██████████████████████> >
wrote:

thought this was interesting a= it would yield foreign interest income please advise thank you

Richard Kahn
HBRK Associates Inc.

New York, NY 10022
tel 212-971-1306=/a>
fax ████████████ <tel:██████████████████
cell ████████████ <tel ██████████████████

Begin forwarded message:

From: "Atla=, Andrew S" <blackened out><mailto:blackened out>>
Subject: Royal Ba=k of Scotland 7.64% Fixed-to-Float Pfd
Date: November 9, 2015 at 4:03=19 PM EST
To: =/span>"Richard Kahn <blackened out><mailto:blackened out>> )"

Rich,

=span style="font-family:"Cambria","serif"">Here40=804>s an attractive Yield to Call opportunity that I wanted to show South=rn Trust Company. I've attached a still relevant Morgan Stan=ey note from earlier this year.

Details:</=>

Royal Bank of Scotland 7.64% Fixed-to-Float Preferred Shares<=>

RBS 7.64% Perpetual

Issuer:=C2 Royal Bk Scotland Grp Plc

Par Value: =C2 $1,000

S=curity Type: Preferred Stock

QDI/DRD Eligible=A0 Yes / Yes<=>

Cumulative: Non-Cumulative

Rating: B1 / B+

Coupon (Details): =C2 7.64% to 9/30/2017; =hen US 3M Libor +232bp, resets Quarterly

=A0 =A0 =C2

Next Call Date: 9/30/2017, Quarterly thereafter=/u>

Maturity: =C2 =A0 Perpetual

<=>Net Pri=e: =C2 =A0 105.25

Current Yield: =C2 =A0 7.2589%

Yield to Next Call: =C2 4.6871%

<signature> Yes / Yes<=>:

Some of Morgan Stanley's highlights:<=>

1.<=pan style="font:7.0pt "Times New Roman—> 40=A0 They fundamentally like the credit and this is one of the most =iquid and highest yielding legacy securities (old-style AT1s)

Key entities:

*   RBS
*   Andre S. Atlas, Financial Advisor
*   Morgan Stanley Wealth Management
*   Equity Sales/Middle Markets Group
*   Address: 1290 Avenue of the Americas, 12th Floor, New York, NY 10104

Key information:

*   RBS is issuing AT1, further increasing excess.
*   RBS has excess Tier 1 capital.
*   The 7.64s are expensive.
*   7.64s are only callable every 10 years.
*   Bond call expected at first call.
*   Coupon is 1.2x higher for the issuer than the headline coupon.
*   Back end of 3ml+232 grossed up for tax is closer to 3ml+300 for the issuer.

Important Notice to Recipients:

Please do not use e-mail to request, authorize or effect the purchase or sale of any security=or commodity. Unfortunately, we cannot execute such instructions provided in=20 e-mail. Thank you.

The sender of this e-mail is an employee of=20 Morgan Stanley Smith Barney LLC ("Morgan Stanley"). If you =ave received this communication in error, please destroy all electronic and paper copies=and notify the sender immediately. Erroneous transmission is not intended to wa=ve confidentiality or privilege. Morgan Stanley reserves the right, to t=e extent permitted under applicable law, to monitor electronic communications= This message is subject to terms available at the following link: http://www.morganstanley.com/disclaimers/mssbemail.html.,=A0 If you cannot access this link, please notify us by reply message and we will send the contents to you. By messaging with Morgan Stanley you consent to the=20 foregoing.

please note=br>

The information contained in this communication is confidential= may be attorney-client privileged, may constitute inside information, =nd is intended only for the use of the addressee. It is the property of=br>JEE Unauthorized use, disclosure or copying of this communication=or any part thereof is strictly prohibited and may be unlawful. If you =ave received this communication in error, please notify us immediately =y return e-mail or by e-mail to jeevacation@gmail.com <mailto:jeevacation@gmail.com= target=> , and destroy this communic=tion and all copies thereof, including all attachments. copyright -all =ights reserved