other instruments that they deem appropriate in connection with such hedging. These trading activities, however, could potentially alter the level of a linked rate, linked currency, linked index, or other formula and/or the underlying asset(s) comprising such linked rate, linked currency, linked index, or other formula and, therefore, the value of the notes.
The agents and their affiliates are likely to modify any hedge position they may enter into in respect of the notes throughout the term of the notes by purchasing and selling underlying asset(s) (or options or futures contracts on the underlying asset(s)) that relate to a linked interest rate, linked currency, linked index or other formula, or other instruments that they deem appropriate. Neither AHFC, the agents, nor any of their affiliates can give any assurance that their hedging or trading activities will not affect the level of a linked interest rate, linked index or linked formula or the underlying asset(s) comprising such linked rate, linked currency, linked index or other formula. It is also possible that AHFC, the agents, and any of their affiliates could receive substantial returns from these hedging activities while the value of the notes may decline.
AHFC, the agents, and/or any of their affiliates may also engage in trading the underlying asset(s) (or options or futures contracts on the underlying asset(s)) that relate to a linked interest rate, linked currency, linked index or other formula or options or futures on such linked interest rate, linked currency, linked index or other formula on a regular basis as part of their general broker-dealer activities and other businesses, for proprietary accounts, for other accounts under management or to facilitate transactions for customers, including through block transactions. Any of these activities could adversely affect the level of a linked rate, linked currency, linked index or other formula, the underlying asset(s) comprising a linked rate, linked currency, linked index or other formula and, therefore, the value of the notes linked to such rate, currency, or other index or formula.
AHFC, the agents, and/or any of their affiliates may also issue or underwrite other notes or financial or derivative instruments with returns linked or related to changes in the value of a linked interest rate, linked index or linked formula or the underlying asset(s) comprising a linked rate, linked currency, linked index or other formula. By introducing competing products into the marketplace in this manner, AHFC, the agents, and any of their affiliates could adversely affect the value of the notes.
We are not a bank and investments in the notes are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other source.
Only AHFC is obligated to pay the principal of, and premium, if any, and interest on, the notes, and only its assets are available for this purpose. If AHFC’s assets are insufficient to pay the principal of, and premium, if any, and interest on, the notes, you could lose some or all of your investment. No private or government source guarantees return of your investment in the event of a failure by AHFC to pay interest or any premium on, or the principal of, the notes. The notes are not obligations of or guaranteed by HMC or any other entity. No banking relationship exists between investors and AHFC.
Risks related to exchange rates and exchange controls.
Investment in foreign currency notes entails significant risks that are not associated with an investment in a debt security denominated and payable in U.S. dollars.
If you invest in notes that are denominated and/or payable in a currency or basket of currencies other than U.S. dollars (foreign currency notes), you will be subject to significant risks that are not associated with an investment in a debt security denominated and payable in U.S. dollars. These risks include the possibility of significant changes in rates of exchange between the U.S. dollar and such currency and the possibility that either the United States or foreign governments will impose or modify foreign exchange controls. These risks generally depend on factors over which we have no control, such as economic and political events and the supply of and demand for the relevant currencies. Moreover, if payments on your foreign currency notes are determined by reference to a formula containing a multiplier or leverage factor, the effect of any change in the exchange rates
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