Post on 18-Mar-2018
Equity-Linked Notes
Product Catalogue
v 27 Dec 2016 1
v 27 Dec 2016
This document is solely for information and general circulation/discussion only and may not be published, circulated, reproduced or distributed in whole or in part to any other person without our written consent. This document should not be construed as an offer or solicitation for the subscription, purchase or sale of the securities mentioned herein. Whilst we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. Any opinion or estimate contained in this document is subject to change without notice. We have not given any consideration to and we have not made any investigation of the investment objectives, financial situation or particular needs of the recipient or any class of persons, and accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the recipient or any class of persons acting on such information or opinion or estimate. You may wish to seek advice from a financial adviser regarding the suitability of the securities mentioned herein, taking into consideration your investment objectives, financial situation or particular needs, before making a commitment to invest in the securities. You should consider carefully and exercise caution in making any trading decision whether or not you have received advice from any financial adviser. If you choose not to seek independent financial advice, please consider whether the trade or product in question is suitable for you. Opinions, conclusions and other information in this document that do not relate to the official business of OCBC Securities Private Limited and their respective connected and associated corporations shall not be understood as either given nor endorsed.
Disclaimer
2
Contents
v 27 Dec 2016
Page Number
Overview 4
• Issuers, Currencies, Tenors
Description of Notes and Illustrations 5 – 29
• Equity Linked Note (ELN) 5 – 8
• Knock-Out Equity Linked Note (KOELN)
9 – 12
• Reverse Equity-Linked Note (RELN) 13 – 16
• Fixed Coupon Note (FCN) 17 – 23
• Bonus Enhanced Note (BEN) 24 – 29
3
This Product Catalogue contains information on OCBC Securities Private Limited’s (OSPL’s) Equity-Linked Notes. All terms of the Notes may be customised by an investor upon request. Please check with your Trading Representative (TR) if you have any queries. Alternatively, you can contact our Customer Service at 1800 338 8688 or through email to cs@ocbcsec.com. Only Accredited Investors are eligible to trade in Equity-Linked Notes. For more information on Accredited Investors, please click here.
Overview
v 27 Dec 2016
Available Issuers This list will be expanded as OSPL increases the issuers we work with. • OCBC Bank • Societe Generale • BNP Paribas • Commerzbank • Royal Bank of Canada
Available Currencies • SGD, USD, EUR, GBP, CHF, JPY, HKD, CAD,
AUD
Available Tenors 1-12 months. Typical tenors for ELNs, KOELNs and RELNs are 1-3 months, FCNs are 3-6 months, BENs are 6-12 months.
4
Equity Linked Note (ELN)
Market View • An Equity-Linked Note is designed for clients with a stable or moderately bullish
market outlook
Description
• An Equity-Linked Note is issued at a discount to the Principal Amount
• The difference between the amount investors pay and the amount received at
maturity is the investor’s profit, and is reflected in the annualised yield
• If at Valuation Date the underlying stock price remains above or equal to the Strike
Price at inception, investors receive 100% of the Principal Amount at maturity
• If the underlying stock performs below the Strike Price, investors are exposed to the
stock’s negative performance
v 27 Dec 2016 5
Equity Linked Note (ELN)
Risks* • ELNs are not principal protected • Gains are limited to the yield of the
ELN • Investors are exposed to credit risk of
the issuer and the market movement of the underlying stock
• If underlying stock and ELN are in different currencies, investors are exposed to FX risk in the event of conversion
Benefits • Enjoy higher returns than a direct
investment in the underlying stock, in the event that the stock price trades sideways
• Buy the underlying stock at a discount to market price at inception
*Not exhaustive. Please consult the respective offer documents and term sheets for the risk factors
v 27 Dec 2016 6
•Choose your Stock, Strike price
•Place your order with Products Desk
Trade Date
•Client pays a discount to Principal Amount
Settlement Date
• Products Group sends your TR a daily list of stock names and yields.
• Please contact your TR for that list.
• We are able to customise terms and stocks to suit your needs.
If the stock price closes AT or ABOVE its Strike
Price on Valuation Date, client gets back Principal
Amount in cash
If the stock price closes below its Strike Price on
Valuation Date, client gets back Principal Amount in shares
2
Client pays a discount to Principal Amount and gets back 100% of Principal Amount on Maturity. The difference is the client’s profit, and is reflected in the quoted annualised yield.
Pick the stock you like, at the price you don’t mind collecting (the strike price).
Customise your own stock, tenor & strike price.
How does an Equity-Linked Note (ELN) work?
•Principal Amount: Cash or Shares?
Valuation Date
v 27 Dec 2016
1
7
Trade Date
Settlement Date
Valuation Date
Condition: Singpost closes
at or above strike on
Valuation Date. Outcome:
Client gets cash
How does an ELN work? – Example
Client pays SGD198,080 (99.04% of Note Price)
Issue Date
Maturity Date
Client receives SGD200,000 (Scenario )
or 142,196 Singpost shares
(Scenario )
1
2
1.43
1.4065
1.39
1.41
1.43
1.45
1.47
Trade Date Valuation Date
Scenario
Stock Price
Strike Price
1
1.39
1.4065
1.39
1.41
1.43
1.45
1.47
Trade Date Valuation Date
Scenario
Stock Price
Strike Price
2 Condition:
Singpost closes below strike on Valuation Date.
Condition: Client gets
shares
Client decides on stock, price
levels
COUNTER Singpost
Spot Price SGD1.45
Strike Price (97% of Spot Price)
SGD1.4065
Principal Amount
SGD200,000
Client pays SGD198,080
Yield pa 11.16%
Trade Date 21 Nov 2016
Settlement Date
25 Nov 2016
Issue Date 28 Nov 2016
Valuation Date
27 Dec 2016
v 27 Dec 2016 8
Knock-Out Equity Linked Note (KOELN)
Market View • A Knock-Out Equity-Linked Note is designed for clients with a stable or moderately
bullish market outlook
Description
• A Knock-Out Equity-Linked Note is issued at a discount to the Principal Amount
• The difference between the amount investors pay and the amount received at
maturity, or earlier if Knocked Out, is the investor’s profit, and is reflected in the
annualised yield
• If at Valuation Date the underlying stock price remains above or equal to the Strike
Price at inception, investors receive 100% of the Principal Amount at maturity
• If the underlying stock price trades at or above the Knock-Out Price, investors will
receive 100% of the Principal Amount early
• If the underlying stock performs below the Strike Price, investors are exposed to the
stock’s negative performance
v 27 Dec 2016 9
Knock-Out Equity Linked Note (KOELN)
Risks* • KOELNs are not principal protected • Gains are limited to the yield of the
KOELN • Investors are exposed to credit risk
of the issuer and the market movement of the underlying stock
Benefits • Enjoy higher returns than a direct
investment in the underlying stock, in the event that the stock price trades sideways
• Chance to realise profits early in the event market is bullish
• Chance to buy the underlying stock at a discount to market price
*Not exhaustive. Please consult the respective offer documents and term sheets for the risk factors
v 27 Dec 2016 10
•Choose your Stock, Strike Price, Knock-Out Price
Trade Date
•Client pays a discount to Principal Amount
Settlement Date
If the stock price closes AT or ABOVE its Strike Price on
Valuation Date, client gets back Principal Amount in cash
If the stock price closes below its Strike Price on Valuation Date,
client gets back Principal Amount in shares
2
3
Client pays a discount to Principal and gets back 100% of Principal on Maturity or earlier if there is a Knock-Out. The difference is the client’s profit.
Pick the stock you like, at the price you don’t mind collecting (the strike price).
Customise your own stock, tenor & strike price.
How does a KOELN work?
•Principal Amount: Cash or Shares?
Valuation Date, if
Knock-Out has not
occurred
v 27 Dec 2016
If stock trades AT or ABOVE Knock-Out Price, client gets back Principal Amount in cash on Issue Date + 4 or Knock Out Date
+ 4, whichever is later
Anytime from Trade Initiation
to Valuation Date
1
• Products Group sends your TR a daily list of stock names and yields.
• Please contact your TR for that list.
• We are able to customise terms and stocks to suit your needs.
11
Trade Date
Settlement Date
Valuation Date
How does a KOELN work? – Example
Client pays SGD198,080 (99.04% of Note Price)
Issue Date
Maturity Date
Note is not redeemed early. Client receives
SGD200,000 (Scenario ) or 142,196 Singpost shares
(Scenario )
2
3
1.43
1.495
1.4065 1.39
1.49
Trade Date Valuation Date
Scenario
Stock Price
Knock Out Price
Strike Price
2
1.39
1.4935
1.4065 1.39
1.49
Trade Date Valuation Date
Scenario
Stock Price
Knock-Out Price
Strike Price
3
Condition: Singpost trades at or above Knock-
Out Price. Outcome:
Client gets cash
Condition: No Knock-Out, Singpost closes
below Strike Price on Valuation Date.
Outcome: Client gets shares
Singpost trades at 1.495 after client purchases KOELN.
Client receives SGD200,000 and Note ends
(Scenario ) 1
1.495
1.4935
1.4065 1.39
1.49
Trade Date Anytime tillValuation Date
Valuation Date
Scenario
Stock Price
Knock Out Price
Strike Price
1
Condition: No Knock-Out,
Singpost closes at or above Strike
Price on Valuation Date.
Outcome: Client gets cash
Client decides on stock, price
levels
COUNTER Singpost
Spot Price SGD1.45
Strike Price (97% of Spot Price)
SGD1.4065
Knock-Out Price (103% of Spot Price)
SGD1.5225
Principal Amount
SGD200,000
Client pays SGD198,080
Yield pa 11.16%
Trade Date 21 Nov 2016
Settlement Date
25 Nov 2016
Issue Date 28 Nov 2016
Valuation Date
27 Dec 2016
v 27 Dec 2016 12
Reverse Equity Linked Note (RELN)
Market View • A Reverse Equity-Linked Note is designed for clients with a stable or moderately
bearish market outlook
Description
• A Reverse Equity-Linked Note is issued at par
• If, on Valuation Date, the underlying stock price closes above the Strike Price,
investors will receive the Principal Amount in cash, together with an Interest
Amount
• If the underlying stock performs below the Strike Price, investors receive the stock
deposited at inception, together with an Interest Amount
v 27 Dec 2016 13
Reverse Equity Linked Note (RELN)
Risks* • RELNs are not principal protected • Gains are limited to the yield of the
RELN • Investors are exposed to credit risk of
the issuer and the market movement of the underlying stock
Benefits • Unlock more returns from the stock,
especially during periods where the stock does not give dividends
• Sell your shares at a pre-agreed price in the event the market turns bullish
*Not exhaustive. Please consult the respective offer documents and term sheets for the risk factors
v 27 Dec 2016 14
•Choose your Stock, Strike price
Trade Date
•Client pays Principal Amount
Settlement Date
If the stock price closes ABOVE its Strike Price
on Valuation Date, client gets back Principal +
Interest Amount in cash
If the stock price closes AT or BELOW its Strike
Price on Valuation Date, client gets back
Principal in shares + Interest Amount in cash
1
2
Pick the stock you like, at the price you don’t mind selling at (the strike price). Customise your own stock, tenor & strike price.
How does a RELN work?
•Principal Amount: Cash or Shares?
•Interest Payment
Valuation Date
Client pays by depositing shares of
the underlying as payment. For other ELN types, client has
to pay by cash
v 27 Dec 2016
• Products Group sends your TR a daily list of stock names and yields.
• Please contact your TR for that list.
• We are able to customise terms and stocks to suit your needs.
15
Trade Date
Settlement Date
Valuation Date
Singpost closes above strike on Valuation Date. Client gets cash
+ interest
How does a RELN work? – Example
Client pays by depositing
135,000 shares of Singpost
Issue Date
Maturity Date
Client receives SGD205,537.50 + SGD2027.22 (Scenario ) or
135,000 Singpost shares + SGD2027.22 (Scenario )
1
1.53 1.5225
1.39
1.44
1.49
1.54
Trade Date Valuation Date
Scenario
Stock Price
Strike Price
1
1.39
1.5225
1.39
1.44
1.49
1.54
Trade Date Valuation Date
Scenario
Stock Price
Strike Price
2 Singpost closes below strike on Valuation Date.
Client gets shares + interest
Client decides on Stock, Spot and Strike
Prices 2
COUNTER Singpost
Spot Price SGD1.45
Strike Price (105% of Spot Price)
SGD1.5225
Principal Amount
135,000 shares of Singpost
Client pays 135,000 shares of Singpost
Yield pa 10%
Trade Date 21 Nov 2016
Settlement Date
25 Nov 2016
Issue Date 28 Nov 2016
Valuation Date
27 Dec 2016
Interest Amount: Principal* Strike Price*Yield
SGD2027.22
v 27 Dec 2016 16
Fixed Coupon Note (FCN)
Market View • A Fixed Coupon Note is designed for clients with a stable or moderately bullish
market outlook
Description
• A Fixed Coupon Note is issued at par. Clients receive regular coupon payouts until
the Note is redeemed
• Typical number of underlying stocks range from 2 to 4, typical tenor is 3-12 months
• If the underlying stocks perform at or above the Knock-Out levels, investors will
receive 100% of the principal in cash, together with the latest coupon payment.
Knock-In levels act as a safety valve; if underlying stocks never trade below these
levels, investors will never receive shares
• If underlying stocks perform below the Knock-In levels and Strike levels, investors
receive the worst performing stock at Final Valuation Date
• Knock-Out and Knock-In levels may be observed on a monthly or daily basis
v 27 Dec 2016 17
Risks* • FCNs are not principal protected • Gains are limited to the coupon of the
FCN • Investors are exposed to credit risk of
the issuer and the market movement of the underlying stocks
Benefits • Receive regular coupon payouts
regardless of outcome • Chance to get Knocked Out if
markets are bullish and capture upside by reinvesting directly in the market
• Chance to buy shares of the underlying stocks at Strike Prices, which are typically lower than for ELNs
*Not exhaustive. Please consult the respective offer documents and term sheets for the risk factors
v 27 Dec 2016
Fixed Coupon Note (FCN)
18
•Coupon Payment
•If No Early Redemption, Note continues
Valuation Date 1 and
2
On Valuation Date 1 or 2, If ALL stock prices close AT or
ABOVE their Knock Out prices, client gets back
Principal Amount + coupon payment & Note ends. If
not, Note continues.
If ALL stocks prices close AT or ABOVE their Knock-In prices
every day, client gets back Principal Amount + coupon
payment.
If ANY stock price closes BELOW its Knock-In price
during the tenor AND closes BELOW its Strike Price on
Final Valuation Date, client gets the shares of the worst
performer + coupon payment.
If ANY stock price closes BELOW its Knock-In price during the tenor BUT ALL stock prices close AT or
ABOVE their Strike Price on Final Valuation Date, client
gets back Principal Amount + coupon payment.
2
3
4
Collect FIXED COUPON every month regardless of outcome. Potential for early redemption every month. Knock-In levels are a safety valve: If closing prices never go below these levels, you will not be delivered shares. See If closing prices go below these levels, you can be delivered shares of the worst performer at strike price. See Pick the stocks you like and don’t mind collecting. Customise your own coupon, tenor & price levels.
How does a FCN work? (3 Months, Monthly Knock-Out, Daily Knock-In)
•Principal Amount: Cash or Shares?
•Coupon Payment
Final Valuation
Date
2
4
v 27 Dec 2016
•Choose your Stocks, Strike levels and Knock-In levels
Trade Date
•Client pays Principal Amount
Settlement Date
1
19
Fixed Coupon Note (FCN) (Monthly Knock-Out, Daily Knock-In) Example of Scenario : Knock-Out occurs, Early Cash Redemption
COUNTERS DBS SING POST
(SPOST)
SEMBCORP IND (SCI)
Spot Prices / Knock-Out Prices
SGD 16.06
SGD 1.47
SGD 2.89
Strike Prices (95.25% of Spot Prices)
SGD 15.257
SGD 1.397
SGD 2.746
Knock-In Prices (85% of Spot Prices)
SGD 13.651
SGD 1.250
SGD 2.457
Trade Date 29 Jul 2016
Issue Date 12 Aug 2016
Valuation Dates
12 Sep 2016, 10 Oct 2016, 8 Nov 2016
Principal Amount
SGD200,000
Coupon per month
SGD1666.67
Return per month
0.8333%
Total Coupon , if no Early Redemption
SGD5,000
Yield pa 10%
16.06
15.257
13.651
13
14
15
16
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
DBS Stock Price
DBS Knock Out Price
DBS Strike Price
DBS Knock-In Price
1
1.5 1.47
1.397
1.25 1.2
1.4
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SPOST Stock Price
SPOST Knock Out Price
SPOST Strike Price
SPOST Knock-In Price
1
2.91 2.89
2.746
2.457
2.3
2.8
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SCI Stock Price
SCI Knock Out Price
SCI Strike Price
SCI Knock-In Price
1
DBS SPOST SCI Knock-Out Outcome
Closing prices on 12 Sep
15.80 1.40 2.40 No Client receives SGD1666.67, Note
continues to 10 Oct
Closing prices on 10 Oct
16.06 1.50 2.91 Yes Client receives SGD200,000 +
SGD1666.67, Note is redeemed
1
v 27 Dec 2016
20
COUNTERS DBS SING POST
(SPOST)
SEMBCORP IND (SCI)
Spot Prices / Knock-Out Prices
SGD 16.06
SGD 1.47
SGD 2.89
Strike Prices (95.25% of Spot Prices)
SGD 15.257
SGD 1.397
SGD 2.746
Knock-In Prices (85% of Spot Prices)
SGD 13.651
SGD 1.250
SGD 2.457
Trade Date 29 Jul 2016
Issue Date 12 Aug 2016
Valuation Dates
12 Sep 2016, 10 Oct 2016, 8 Nov 2016
Principal Amount
SGD200,000
Coupon per month
SGD1666.67
Return per month
0.8333%
Total Coupon , if no Early Redemption
SGD5,000
Yield pa 10%
14
16.06
15.257
13.651 13
14
15
16
Trade Date 12-Sep 10-Oct 08-Nov
Scenario DBS Stock Price
DBS Knock Out Price
DBS Strike Price
DBS Knock-In Price
2
1.43
1.47
1.397
1.25 1.2
Trade Date 12-Sep 10-Oct 08-Nov
Scenario SPOST Stock Price
SPOST Knock Out Price
SPOST Strike Price
SPOST Knock-In Price
2
2.55
2.89 2.746
2.457
2.3
Trade Date 12-Sep 10-Oct 08-Nov
Scenario SCI Stock Price
SCI Knock Out Price
SCI Strike Price
SCI Knock-In Price
2
Fixed Coupon Note (FCN) (Monthly Knock-Out, Daily Knock-In) Example of Scenario : No Knock-In, Cash Redemption at Maturity 2
DBS SPOST SCI Knock-Out Knock-In Outcome
Closing prices on 12 Sep 15.80 1.38 2.48 No No Client receives SGD1666.67,
Note continues to 10 Oct
Closing prices on 10 Oct 15.00 1.42 2.49 No No Client receives SGD1666.67,
Note continues to 08 Nov
Closing prices on 08 Nov 14.00 1.43 2.55 No No
Client receives SGD1666.67 and SGD200,000
Lowest closing prices on any trading day
14.00 1.38 2.48 No No
v 27 Dec 2016
21
KNOCK-IN, CASH REDEMPTION AT MATURITY: DBS never closes below 13.651, SPOST never closes below 1.25, BUT SCI closes below 2.457 on at least one trading day. Knock-In occurs. Client
continues to receive SGD1666.67 every month. On 8 Nov, DBS closes above 15.257, SPOST closes above 1.397, and SCI closes above 2.746. Client receives SGD200,000 and SGD1666.67 on maturity.
COUNTERS DBS SING POST
(SPOST)
SEMBCORP IND (SCI)
Spot Prices / Knock-Out Prices
SGD 16.06
SGD 1.47
SGD 2.89
Strike Prices (95.25% of Spot Prices)
SGD 15.257
SGD 1.397
SGD 2.746
Knock-In Prices (85% of Spot Prices)
SGD 13.651
SGD 1.250
SGD 2.457
Trade Date 29 Jul 2016
Issue Date 12 Aug 2016
Valuation Dates
12 Sep 2016, 10 Oct 2016, 8 Nov 2016
Principal Amount
SGD200,000
Coupon per month
SGD1666.67
Return per month
0.8333%
Total Coupon , if no Early Redemption
SGD5,000
Yield pa 10%
3
15.5 16.06
15.257
13.651
13
14
15
16
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
DBS Stock Price
DBS Knock Out Price
DBS Strike Price
DBS Knock-In Price
3
1.43
1.47
1.397
1.25 1.2
1.4
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SPOST Stock Price
SPOST Knock Out Price
SPOST Strike Price
SPOST Knock-In Price
3
2.77
2.89
2.746
2.457
2.3
2.8
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SCI Stock Price
SCI Knock Out Price
SCI Strike Price
SCI Knock-In Price
3 Knock-In occurs
Fixed Coupon Note (FCN) (Monthly Knock-Out, Daily Knock-In) Example of Scenario : Knock-In, Cash Redemption at Maturity
DBS SPOST SCI Knock-Out Knock-In Outcome
Closing prices on 12 Sep
15.80 1.38 2.40 No No Client receives SGD1666.67, Note
continues to 10 Oct
Closing prices on 10 Oct
15.00 1.42 2.60 No No Client receives SGD1666.67, Note
continues to 08 Nov
Closing prices on 08 Nov
15.50 1.43 2.77 No No Knock-In is ‘Yes’, all stocks above
Strike Prices, Client receives SGD1666.67 and SGD200,000
Lowest closing prices on any trading day
15.00 1.38 2.40 No Yes
v 27 Dec 2016
22
KNOCK-IN, CASH REDEMPTION AT MATURITY: DBS never closes below 13.651, SPOST never closes below 1.25, BUT SCI closes below 2.457 on at least one trading day. Knock-In occurs. Client
continues to receive SGD1666.67 every month. On 8 Nov, DBS closes above 15.257, SPOST closes above 1.397, and SCI closes above 2.746. Client receives SGD200,000 and SGD1666.67 on maturity.
COUNTERS DBS SING POST
(SPOST)
SEMBCORP IND (SCI)
Spot Prices / Knock-Out Prices
SGD 16.06
SGD 1.47
SGD 2.89
Strike Prices (95.25% of Spot Prices)
SGD 15.257
SGD 1.397
SGD 2.746
Knock-In Prices (85% of Spot Prices)
SGD 13.651
SGD 1.250
SGD 2.457
Trade Date 29 Jul 2016
Issue Date 12 Aug 2016
Valuation Dates
12 Sep 2016, 10 Oct 2016, 8 Nov 2016
Principal Amount
SGD200,000
Coupon per month
SGD1666.67
Return per month
0.8333%
Total Coupon , if no Early Redemption
SGD5,000
Yield pa 10%
15
16.06
15.257
13.651
13
14
15
16
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
DBS Stock Price
DBS Knock Out Price
DBS Strike Price
DBS Knock-In Price
4
DBS is worst performer
1.43
1.47
1.397
1.25 1.2
1.4
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SPOST Stock Price
SPOST Knock Out Price
SPOST Strike Price
SPOST Knock-In Price
4
2.77
2.89
2.746
2.457
2.3
2.8
Trade Date 12-Sep 10-Oct 08-Nov
Scenario
SCI Stock Price
SCI Knock Out Price
SCI Strike Price
SCI Knock-In Price
4 Knock-In occurs
Fixed Coupon Note (FCN) (Monthly Knock-Out, Daily Knock-In) Example of Scenario : Knock-In, Shares Conversion at Maturity
DBS SPOST SCI Knock-Out Knock-In Outcome
Closing prices on 12 Sep
15.80 1.38 2.40 No No Client receives SGD1666.67, Note
continues to 10 Oct
Closing prices on 10 Oct
15.00 1.42 2.60 No No Client receives SGD1666.67, Note
continues to 08 Nov
Closing prices on 08 Nov
15.00 1.43 2.77 No No Knock-In is ‘Yes’, worst performer on 08 Nov is DBS. Worst performer is stock which has fallen the most.
Client receives SGD1666.67 and 200,000/15.257= 13,108 shares of
DBS
Lowest closing prices on any trading day
15.00 1.38 2.40 No Yes
4
v 27 Dec 2016
23
Bonus Enhanced Note (BEN)
Market View • A Bonus Enhanced Note is designed for investors with a stable or moderately bullish
market outlook
Description
• A Bonus Enhanced Note is issued at par
• There is only one Valuation Date and it occurs at the end of the tenor
• Typical number of underlying stocks range from 2 to 4, typical tenor is 6-12 months
• If underlying stocks perform at or above the Strike Prices, investors will receive 100% of
the Principal in cash, together with a Bonus Coupon or the gain of the Worst Performer,
whichever is higher
• If underlying stocks perform below the Strike Prices, investors receive shares of the
Worst Performer at Final Valuation Date
v 27 Dec 2016 24
Risks* • BENs are not principal protected • Gains are limited to the gains of Worst
Performer, if above Strike Prices • Investors are exposed to credit risk of
the issuer and the market movement of the underlying stocks
Benefits • Receive a Bonus coupon with no
cap, in the event the underlying stock prices are flat or move up
• Chance to buy shares of the underlying stocks at Strike Prices
*Not exhaustive. Please consult the respective offer documents and term sheets for the risk factors
v 27 Dec 2016
Bonus Enhanced Note (BEN)
25
•Choose your Stock(s), Strike level, tenor
•Place your order with Products Desk
Trade Date
•Client pays Principal Amount
Settlement Date
• For an idea, please refer to the daily indicative lists sent by Products Group.
• Please contact your TR for the lists.
• We are able to customise terms and stocks to suit your needs.
If both stock prices close AT or ABOVE their Strike Prices on Valuation Date, client gets
back: Principal Amount + Bonus Coupon
OR Principal Amount + gain of Worst Performer,
whichever is higher.
If either stock price closes below its Strike Price on Valuation Date, client gets back Principal Amount in shares of the Worst
Performer.
How does a BEN work? (2 underlyings)
•Principal Amount: Cash or Shares?
•Bonus coupon?
Valuation Date
v 27 Dec 2016
Gain from FLAT or UP markets! At the end of the tenor, if: Underlying stocks are FLAT or UP: Note pays out Bonus Coupon OR gain of Worst Performer, whichever is higher. See Underlying stocks are DOWN: Get shares of the Worst Performer at Strike Price. See
1 2
3
2
1
3
26
Bonus Enhanced Note (BEN) Example of Scenario : Bonus Coupon payout
COUNTERS SINGTEL SPH
Spot Prices SGD 3.74
SGD 3.71
Strike Prices (100% of Spot Prices)
SGD 3.74
SGD 3.71
Trade Date 11 Nov 2016
Settlement Date 24 Nov 2016
Issue Date 25 Nov 2016
Valuation Date 25 May 2017
Principal Amount SGD200,000
Coupon Amount SGD30,800
Bonus Coupon (Flat)
15.40%
3.80
3.74
3.50
3.60
3.70
3.80
3.90
4.00
Trade Date 25-May
Scenario
Singtel Stock Price
Singtel Strike Price
1
SINGTEL SPH Worst
Performer
Gain of Worst
Performer
Is Worst Performer at
or above Strike Price?
Is gain of Worst
Performer higher than
Bonus Coupon?
Outcome
Closing price on 25 May
3.80 3.71 SPH (3.71/3.71)-
1 = 0% Yes No
Client receives
SGD200,000 and Bonus Coupon of SGD30,800
1
3.71
3.50
3.60
3.70
3.80
3.90
4.00
Trade Date 25-May
Scenario
SPH Stock Price
SPH Strike Price
1
v 27 Dec 2016 27
Bonus Enhanced Note (BEN) Example of Scenario : Higher Bonus Coupon payout
4.40
3.74
3.50
4.00
4.50
Trade Date 25-May
Scenario
Singtel Stock Price
Singtel Strike Price
2
SINGTEL SPH Worst
Performer
Gain of Worst
Performer
Is Worst Performer at
or above Strike Price?
Is gain of Worst
Performer higher than
Bonus Coupon?
Outcome
Closing price on 25 May
4.40 4.50 Singtel (4.40/3.74)-1=17.647%
Yes Yes
Client receives SGD200,000 and higher
Bonus Coupon of SGD35,294
(17.647%)
2
4.50
3.71
3.50
4.00
4.50
Trade Date 25-May
Scenario
SPH Stock Price
SPH Strike Price
2
COUNTERS SINGTEL SPH
Spot Prices SGD 3.74
SGD 3.71
Strike Prices (100% of Spot Prices)
SGD 3.74
SGD 3.71
Trade Date 11 Nov 2016
Settlement Date 24 Nov 2016
Issue Date 25 Nov 2016
Valuation Date 25 May 2017
Principal Amount SGD200,000
Coupon Amount SGD30,800
Bonus Coupon (Flat)
15.40%
v 27 Dec 2016 28
Bonus Enhanced Note (BEN) Example of Scenario : Shares Conversion
3.00
3.74
2.90
3.40
3.90
Trade Date 25-May
Scenario
Singtel Stock Price
Singtel Strike Price
3
SINGTEL SPH Worst
Performer
Gain of Worst
Performer
Is Worst Performer at
or above Strike Price?
Is gain of Worst
Performer higher than
Bonus Coupon?
Outcome
Closing price on 25 May
3.00 3.50 Singtel (3.00/3.74)-1=-19.786%
No No
Client receives 200,000/3.74 = 53,475 shares
of Singtel
3
3.50
3.71
3.40
3.90
Trade Date 25-May
Scenario
SPH Stock Price
SPH Strike Price
3
COUNTERS SINGTEL SPH
Spot Prices SGD 3.74
SGD 3.71
Strike Prices (100% of Spot Prices)
SGD 3.74
SGD 3.71
Trade Date 11 Nov 2016
Settlement Date 24 Nov 2016
Issue Date 25 Nov 2016
Valuation Date 25 May 2017
Principal Amount SGD200,000
Coupon Amount SGD30,800
Bonus Coupon (Flat)
15.40%
v 27 Dec 2016 29