Head start digital coupon note on Hong Kong blue chips

Product Rationale

Global markets experienced a noticeable correction in early February, and it seems unclear what the future holds.

The following product has a positive intrinsic value at inception (+10%) from the 10% coupon on a 95% digital barrier. This is a slightly defensive strategy, suitable for investors who are uncertain, yet still mildly bullish. On the other hand, it is a short-term product, with possibility of realising a 10% coupon in just six months.

Product Description
  • Issuer: Commerzbank AG
  • Maturity: 6 months
  • Currency: qUSD
  • Digital coupon: 10% flat
  • Put strike/digital barrier: 95%
  • At maturity: 
    • If the worst performing underlying closes above the put strike/digital barrier (observation at maturity), then the investor receives:
       100% + digital coupon
    • Else, the investor receives: Max(Wof(f) / Wof(i), Floor)
      Wof(f) is the final level of the worst performing underlying
      Wof(i) is the initial level of the worst performing underlying
  • Underlyings:

Underlying name

Bloomberg ticker

HSBC Holdings

5 HK Equity

Tencent Holdings

700 HK Equity

Key Benefits
  • Partial principal protection at 90%

  • Key Risks
    • In a strongly trending equity market, the investor potentially receives a lower return from the note than compared to investing in the underlying stock
    • The investor is subject to the issuer risk of Commerzbank
    • Please also refer to Additional Risk Disclosures below

Additional Risk Disclosures
Before investing in this product, investors should carefully consider its appropriateness and suitability, and the following additional risks: 1. Issuer Risk: Any failure by the issuer to perform its contractual obligations, when due, may result in the loss of all or part of the invested capital. 2. Counterparty Risk: Any failure by Commerzbank AG to perform its contractual obligations, when due, may result in the loss of all or part of the invested capital. 3. Market Risk: Various market factors may affect the value of the investment or the underlying assets, including but not limited to the impact of volatility, interest rates, dividends (if any), foreign exchange. 4. Liquidity/Secondary Market Risk: Under normal market conditions Commerzbank will endeavour to provide a secondary market price. However, Commerzbank has no obligation to make a secondary market in the instruments concerned. Accordingly, under some circumstances, the secondary market for the investment may be limited and subject to wide bid/offer spreads. 5. Reinvestment Risk: The risk that the investment redeems prior to maturity at a time when reinvestment opportunities are not favourable for the investor. 6. Redemption Risk: The risk that the investor may receive substantially less than the amount invested, if they liquidate the investment prior to maturity. 7. Tax Risk: There may be tax implications based on where the investor resides. Please consult a tax professional before investing. 8. Legal Risk: There may be legal restrictions depending on where the investor is domiciled. It is advised to seek legal guidance prior to investing. When specified, the terms ‘guaranteed’ and ‘protected’ are subject to the creditworthiness and solvency of Commerzbank and although financially strong there is the possibility that returns may not be met in the unlikely event of a Commerzbank failure. For additional information on the product features and key risks, please contact your sales advisor or refer to the contacts page.