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For clients in booking center Switzerland only

Equity Conditional Coupon Reverse Convertible (Express Certificate)

Yield enhancement

Examplary Underlying: Equity Index

In general, Equity Conditional Coupon Reverse Convertible (Express Certificate) can provide an attractive payout in stable market conditions. The payout and an early redemption are conditional on the performance of the underlying and may compensate for the risk of being exposed to the downside risk of the underlying.

Factsheet (PDF)
The payout profile is for illustrative purposes only and is based on the assumption that no exceptional cancellation will occur, in accordance with the issuer’s product documentation.

Main features of a sample product

Currency

EUR, cash settled

Term

3 years, subject to early redemption

Return

10% p.a., 5% for each 6-month observation period, payable only in case of an early redemption

Participation

no additional participation

Capital

At risk if underlying closes below barrier level at expiry

You may consider an investment in this product, if

  • You look for a way to enhance yield in sideway markets
  • You are familiar with both structured products and equity markets
  • You are comfortable that the product may end early and being exposed to a reinvestment risk
  • You are comfortable being exposed to the negative performance of the underlying
  • You do not expect the barrier level of the underlying to be touched or breached (barrier event)
  • You wish to be invested in the investment currency of the product. If your reference currency is not equal to the investment currency of the product, the return may increase or decrease in reference currency terms as a result of exchange rate fluctuations

Summary of main product-specific benefits

Summary of main product-specific risks

  • Attractive exit rate for each observation period if redeemed early
  • Redemption will be 100% of nominal value if barrier is not touched or breached
  • Early redemption feature provides a cash-out opportunity at regular intervals
  • Outperforms direct investment in a sideways or slightly positive market

Summary of main product-specific risks

  • Potential return limited to exit rate payment
  • No exit rate payment in case of no early redemption event
  • In the event of an early redemption you might not be able to invest the redemption amount at the same conditions (reinvestment risk)
  • Redemption linked to the underlying if barrier is touched or breached
  • If the currency of the product is different from your reference currency, the return may increase or decrease as a result of currency fluctuations
  • The relatively long tenor increases the likelihood of a barrier event
  • You are fully exposed to the default risk of the issuer. In the worst case a default of the issuer can lead to a loss of the entire invested capital

Scenario Analysis

 

Return on investment (ROI) on the redemption date

Assumptions: Reference price EUR 2'634.39, exit rate 10.00% p.a., early redemption level 100%, barrier level 51.00%

a) ROI in the case of an early redemption event

 

 

 


Observation
date		 Underlying in %
of reference price		 Redemption ROI (redemption + exit
rate)
Strike date + 6 months at or above 100%
below 100%		 Yes
No		 5% (100% + 5%)
Go to next period
Strike date + 12 months at or above 100%
below 100%		 Yes
No		 10% (100% + 10%)
Go to next period
Strike date + 18 months at or above 100%
below 100%		 Yes
No		 15% (100% + 15%)
Go to next period
Strike date + 24 months at or above 100%
below 100%		 Yes
No		 20% (100% + 20%)
Go to next period
Strike date + 30 months at or above 100%
below 100%		 Yes
Yes		 25% (100% + 25%)
Go to next table
Strike date + 36 months (expiration date) at or above 100%
below 100%		 Yes
Yes		 30% (100% + 30%)
Go to next table
For illustrative purposes only. Source: UBS

b) ROI in the case of no early redemption event

 

 

 


Observation
date		 Underlying
in % of reference price		 ROI (redemption +
exit rate) if
barrier is touched		 ROI (redemption
+ exit rate) if
barrier not
touched
Strike date
+ 36
months
(expiration
date)		 99% n.a. 0.00% (100% +
0%)
  90% n.a. 0.00% (100% +
0%)
  80% n.a. 0.00% (100% +
0%)
  70% n.a. 0.00% (100% +
0%)
  60% n.a. 0.00% (100% +
0%)
  51% -49.00% (51% +
0%)		 n.a.
  50% -50.00% (50% +
0%)		 n.a.
  40% -60.00% (40% +
0%)		 n.a.
For illustrative purposes only. Source: UBS