2.00% and the CPI percent change were -1.00%, the interest rate in that period would be 1.00%, and if the CPI percent change were -2.00%, the interest rate in that period would be zero. The calculation of the CPI percent change in respect of the CPI incorporates an approximate three-month lag, as described under Description of the
NotesCPI Rate, which will affect the amount of interest payable on CPI rate notes and may have an impact on the trading prices of CPI rate notes, particularly during periods of significant and rapid changes in the CPI.
The yield on CPI rate notes may be lower than the yield on a standard debt security of comparable maturity.
The amounts we will pay you on interest payment dates and the maturity date may be less than the return you could have earned on other
investments. Because the level of the CPI as of each interest payment date may be less than, equal to or only somewhat greater than its value as of the previous interest payment date, the effective yield to maturity on CPI rate notes may be less
than that which would be payable on a conventional fixed-rate, non-callable debt security of Prudential Financial, Inc. of comparable maturity. In addition, any such return may not fully compensate you for any
opportunity cost to you when other factors relating to the time value of money are taken into account.
Changes in CPI May Not Reflect the Actual
Levels of Inflation Affecting You.
The CPI is just one measure of price inflation in the U.S. and, therefore, may not reflect the
actual levels of inflation affecting holders of the notes. Accordingly, your investment in the notes should not be expected to fully offset any costs of inflation actually experienced by you during the term of your notes.
An Investment in Indexed Notes Entails Significant Risks Not Associated with a Similar Investment in Fixed or Conventional Floating Rate Notes
An investment in notes that are indexed, as to interest and/or principal, to commodities, securities, baskets of securities or
securities indices, interest rates, financial, economic or other measures or other indices, either directly or inversely, entails significant risks that are not associated with similar investments in a fixed rate or conventional floating rate note,
and investors in certain indexed notes may lose their entire investment.
These risks include the possibility that an index or indices may
be subject to significant changes, that the resulting interest rate will be less than that payable on a fixed or conventional floating rate debt security issued by us at the same time, that the repayment of principal and/or premium, if any, can
occur at times other than that expected by the investor, and that you, as the investor, could lose all or a substantial portion of principal and/or premium, if any, payable on the maturity date. Depending on the terms of an indexed note, investors
may not receive any periodic interest payments or receive only very low payments on an indexed note. These risks depend on a number of interrelated factors, including economic, financial and political events, over which we have no control.
Additionally, if the formula used to determine the amount of principal, premium, if any, and/or interest payable with respect to such notes
contains a multiplier or leverage factor, the effect of any change in the applicable index or indices will be magnified. In recent years, values of certain indices have been highly volatile, and such volatility may be expected to continue in the
future. Fluctuations in the value of any particular index that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur in the future.
The secondary market, if any, for indexed notes will be affected by a number of factors independent of our creditworthiness and the value of
the applicable index or indices, including the complexity and volatility of the index or indices, the method of calculating the principal, premium, if any, and/or interest in respect of indexed notes, the time remaining to the maturity of such
notes, the outstanding amount of such notes, any redemption features of such notes, the amount of other debt securities linked to such index or indices and the level, direction and volatility of market interest rates generally. Such factors also
will affect the market value of indexed notes.
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