The Europe Inflation Bonus&Safety 2 Certificate provides for an annual fixed interest rate and an additional interest rate in the amount of the annual inflation rate (HICP excl. tobacco).:
Annual interest payment = 1.9% annual fixed interest rate. + additional interest rate in the amount of the annual inflation rate (HICP excl. tobacco)
The HICP price is determined each May for February and compared with the index level of February of the previous year. The annual interest payment is effected on the ensuing May. Redemption at the end of term (May 2022) depends on the performance of the EURO STOXX 50® index: the certificate is redeemed at 100% of the nominal value (equivalent to EUR 1,000 per certificate) provided that the index never loses 51% or more of its starting value during the observation period.
If the underlying touches or drops below the barrier of 49% of the starting value (59% safety buffer), redemption will be effected according to the performance of the underlying (percent index performance from the starting value to the closing price at the final valuation date). The opportunity for yields is in any case limited by the annual interest payments. Investors do not participate in price increases of the underlying above the starting value.