Index Adjustment Event and Index Disruption Event Notice (ISIN: XS0344931620)

        
     MERRILL LYNCH S.A. 
    société anonyme
    Registered Office: Ballade B2, 4 rue Albert Borschette L-1246 Luxembourg Grand Duchy of Luxembourg
    (Incorporated under the laws of Luxembourg with registration number RCS Luxembourg B-39046)
     NOTICE TO NOTEHOLDERS 
     INDEX ADJUSTMENT EVENT AND INDEX DISRUPTION EVENT NOTICE 
     Merrill Lynch S.A. Series 1359: EUR 10,829,000 Non-Interest Bearing, Index Linked Redemption Notes due 7 February,
2013 - (ISIN: XS0344931620) (the "Notes") 
    We attach a copy of the Index Adjustment Event and Index Disruption Event Notice dated 14(th)November 2008 issued by
Merrill Lynch International, the Index Sponsor in respect of the Notes, informing us that an event falling under the
description in paragraphs 3.1(b) and 3.2(a)(v) of Schedule 5 ( Specific Definitions & Parameters ) of the Final Terms
dated 14 February, 2008 (as amended and restated from time to time) (the "Final Terms") has occurred (the " Notice ").
We hereby give notice to each of you to the same effect as set out in that Notice.
    Unless otherwise defined in this letter, terms used herein shall have the same meaning as defined in the Final Terms
and the Base Prospectus dated 2 April 2007 relating to the Notes (as supplemented from time to time).
    Attachment:
    1. Index Adjustment Event and Index Disruption Event Notice dated 14(th)November 2008 issued by Merrill Lynch
International
      Merrill Lynch                      Merrill Lynch
                                         InternationalMerrill Lynch
                                         Financial Centre
                                         2 King Edward Street
                                         London EC1A 1HQ
                                                                    
 To:  Merrill Lynch S.A. 
      Ballade B2, 4 rue Albert
      Borschette
      L-1246 Luxembourg
      Grand Duchy of Luxembourg
       
      Tel: [phone]
      Fax: [phone]
      Email: [e-mail]
       
      Attention: Treasurer
 CC:  Standard Chartered Bank (China)
      Limited23rd Floor, UC Tower
      500 Fushan Road
      Shanghai Pudong
      P.R. China 200122
       
      Tel: [phone]
      Fax: [phone]
       
      Attention: Mr. Steven Fan
    14 November 2008
    Dear Sir or Madam
     INDEX ADJUSTMENT EVENT AND INDEX DISRUPTION EVENT NOTICE 
     Merrill Lynch S.A. Series 1359: EUR 10,829,000 Non-Interest Bearing, Index Linked Redemption Notes due 7 February,
2013 - (ISIN: XS0344931620) (the "Notes") 
    Unless otherwise defined in this letter, terms used herein shall have the same meaning as defined in the Final Terms
dated February 14, 2008 (as amended and restated from time to time) (the "Final Terms") and the Base Prospectus dated
April 2, 2007 relating to the Notes (as supplemented from time to time).
    We hereby give you notice that an "Index Adjustment Event" and/ or an "Index Disruption Event" (collectively
referred to as "Index Event") has occurred with respect to Permal Fixed Income Holdings N.V. (the "Affected Fund"), a
Component Fund in respect of the Notes. The Index Event was triggered by a letter from the Affected Fund dated October
28, 2008, informing us that effective immediately, the Affected Fund requires a 95-day prior notice of redemptions, an
increase from the current 20-day notice period. The next available redemption date for redemption requests (in respect
of the Affected Fund) received after October 14, 2008 is scheduled for February 28, 2009.
    This event constitutes Index Adjustment Event under paragraph 3.1(b) and / or an Index Disruption Event under
paragraph 3.2(a)(v) of the Schedule 5 ( Specific Definitions & Parameters )  of the Final Terms. According to this
Schedule,
    (1) following the Index Adjustment Event, we shall determine the value of the relevant Component Fund Unit on the
basis of our estimate of the reasonable market value of such Component Fund Unit as of the Business Day immediately
following such event (the "Closing Unit Value"), having regard to then prevailing market conditions, the last reported
NAV and such other conditions which we determine relevant on the valuation of such Component Fund Unit, and such Closing
Unit Value shall be used as the basis of the calculation of the Component Fund Unit value until the Final Valuation
Date;
    (2) following the Index Disruption Event, we may either:
    (i) replace the Affected Fund with:
    (a) units or shares of a successor fund(s) or index, which in our sole determination, uses a similar selection
methodology to that used by the Affected Fund; or
    (b) an asset, index, financial instrument or a basket of financial instruments, in each case which in our sole
determination has a similar market exposure to the Affected Fund;
    (ii) remove the Affected Fund from the Reference Basket and adjust the weight between the remaining unaffected
Component Funds or Component Indices; or
    (iii) redeem the Notes in accordance with Schedule 2 ( Special Conditions ) of the Final Terms.
    We are in the process of determining the appropriate course of action and will inform you about our decision in due
course.