Rainbow call on Japanese equity

Product Rationale

This product has a bullish view, which takes advantage of the effect of diversification: the basket diversifies the idiosyncratic risk of any individual stock. Investors always have the largest weight (50%) and second largest weight (30%) on the best two performing stocks

Product Description
  • Issuer: Commerzbank AG
  • Maturity: 24 months
  • Currency: USD
  • Underlyings:

Underlying name

Bloomberg ticker

8306 JP Equity

Mitsubishi UFJ Financial Group

7203 JP Equity

Toyota Motor Corporation

8031 JP Equity

Mitsui & Co. Ltd

  • Rainbow weights: 50%/30%/20%
  • Participation: 100%
  • Strike: 100%
  • Floor: 15%
  • At maturity:
    • If rainbow performance is greater than strike:
      100% + participation x Max (0%, rainbow performance – strike)
    • If rainbow performance is lesser than strike:

      100% – Min (floor, strike – rainbow performance)
    • Rainbow performance = (best performing stock x 50% + second best performing stock x 30% + worst performing stock x 20%)

Key Benefits
  • Larger exposure to the best performing stocks up to 80%, and 20% exposure to worst stock in the basket
  • Downside floored at 15% negative performance
Key Risks
  • No capital guarantee
  • The investor is subject to the issuer risk of Commerzbank
  • Please also refer to Additional Risk Disclosures below

Dear readers
Commerzbank AG, Tokyo Branch has not participated in its preparation. This document and its distribution do not constitute and should not be construed as a ‘solicitation’ under the Financial Instruments and Exchange Act of Japan (FIEA). This document may be distributed from outside Japan solely to ‘professional investors’ as defined in Section 2(31) of the FIEA and Section 23 of the Cabinet Ordinance Regarding Definition of Section 2 of the FIEA. It is not intended for distribution to individual investors.

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.