To respond to the growing attention of investors towards sustainability issues, Societe Generale has built a new certificate that allows you to take a stand on the MIB ESG, the equity index dedicated to blue-chips listed on the Italian Stock Exchange that present the best practices in environmental, social and governance (ESG) matters.
It is a certificate Autocallable Bonuses which will be placed on the primary market from today 24 January until 25 February 2022 with various placement intermediaries and will subsequently be traded on the secondary market of Euro TLX. The new Societe Generale certificate is categorized by Acepi as partially protected capital certificate and has a duration of three years.
The underlying is the ESG MIB. The index, managed and calculated by Euronext Paris, provides exposure to 40 companies selected according to ESG criteria, defined by the leading European ESG rating agency Vigeo Eiris (Moody’s), starting from the 60 most liquid Italian companies and excluding companies engaged in activities not compatible with ESG investments. The composition of the index is reviewed on a quarterly basis and weighted on the basis of free-float adjusted market capitalization.
How the certificate works
Here is the mechanism of operation of the Bonus Autocallable certificate. At the end of the first year of the product’s life, if the ESG MIB Index Level, observed on the Early Redemption Valuation Date (i.e. at the end of the first year), is equal to or higher than the Early Redemption Barrier, the certificate is liquidated. in advance for a refund amount equal to 100% of the Nominal Value plus a gross premium of 5%. Otherwise, the investment continues until maturity.
At the end of the third year, in the absence of an early settlement at the end of the first year, the certificate provides three possible liquidation scenarios at maturity. If the Final Level of the MIB ESG index is equal to or higher than the Final Barrier (100%), the certificate pays a gross settlement amount equal to 100% of the Nominal Value plus the Final Performance of the underlying multiplied by the Participation (150%) ;
Or, if the Final Level of the MIB ESG index is lower than the Final Barrier but equal to or higher than the Capital Barrier (70%), the certificate pays a gross settlement amount equal to 100% of the Nominal Value. Otherwise, if the Final Level of the underlying is lower than the Capital Barrier (70%), the certificate pays a gross liquidation amount commensurate with the Final Level of the Underlying index, with consequent loss on the invested capital.