The USDNetflix Express 2 certificate combines the opportunity to generate an attractive yield with the possibility for an early redemption. The share of Netflix Inc. serves as underlying for the investment product without capital protection. The Express Certificate offers an attractive profit opportunity for those investors who expect the Netflix share to quote at or above its current level within the forthcoming three years.
The certificate has a minimum term of1year and a maximum term of 3 years. If the closing price of the Netflix share quotes at or above its redemption level (equal to the share’s closing price at the initial valuation date) at one of the annual valuation dates, (early) redemption is effected according to the predefined redemption price.
If the share quotes below the starting value at the annual valuation date, the term extends by another year (up to a maximum term of three years). At the same time, the potential annual termination price rises by 8% of the nominal value annually (up to a maximum of 124%).
In case no early redemption was effected from the first to the third year and if the underlying quotes below the termination level at the third and final valuation date, an additional safety mechanism applies: in case the closing price of the Netflix Inc. share quotes above the barrier of 60% at the final valuation date, redemption is effected at 100% of the nominal value. This means investors do not generate profit and the nominal value of USD 1,000 is redeemed.
Currency risk/opportunity: This certificate is not currency hedged. If the cash flows from the certificate (repayment) are later converted into another currency, additional risks as well as opportunities arise from possible fluctuations of the currency price in relation to the nominal value.
If the barrier is touched or undercut at the final valuation date physical delivery applies. Then the investor gets the Netflix Inc. shares in the amount predefined at the issue date (nominal value/strike). The difference to the integral number is paid out. In this case, the lower share price of the delivered shares may result in the loss of a large part of the capital.
Express Certificates – explained shortly:
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The Team Structured Products of Raiffeisen Centrobank