For investors who reckon price slumps of the European bank index EURO STOXX® Banks of 51% or more as unlikely during the next five years, the Banks Bonus&Safety 3 certificate represents a suitable investment product without capital protection, but with a substantial risk buffer. This Bonus Certificate offers a yield opportunity of 18 % in 3,5 years (equal to 4,84 % p.a. according to the issue price of 100%).
The underlying EURO STOXX® Banks Index is a benchmark of the banking sector in Europe and is made up of 25 Eurozone banks. The barrier is set at 49% of the index starting value. Therefore the comfortable safety buffer (distance to the barrier) amounts to 51% at the beginning of the term.
At the maturity date (July 2023) the Bonus Certificate will be redeemed at the bonus amount of EUR 1,180 per EUR 1,000 nominal value, provided that the index neither touches nor undercuts the barrier of 49%(continuous observation) at any point in time.
What happens, if the barrier was violated?
In case the barrier was touched or undercut, the bonus mechanism will no longer apply and redemption at the maturity date will be effected according to the performance of the underlying (percentage index performance from the starting value to the closing price at the final valuation date). In this case a major capital loss is possible. Even then the maximum amount remains limited at EUR 1,180 per nominal value and investors do not participate in price increases of the EURO STOXX® Banks index beyond the cap.
Further information as well as the Key Information Document can be found on the product page.
Bonus Certificates – explained shortly:
For any additional information you may require do not hesitate to contact us on +43151520484.
The Structured Products Team of Raiffeisen Centrobank