BNP Paribas issued on the SeDeX (MTF) of Borsa Italiana a new series of Memory Cash Certificates on baskets of shares with a two-year duration, potential premiums with a quarterly memory effect, equal to an annual return between 12% and 13.6% and, at maturity, protection of the nominal capital in the event of discounts of the underlying shares up to 40%.
How certificates work
The Memory Cash Collects on share baskets make it possible to obtain potential quarterly premiums between 3% and 3.40% with a memory effect even in the event of a negative performance of the underlying shares, provided that the price of all the shares making up the basket is equal to or above the Premium Barrier level. This issue in particular is characterized by the coincidence between the value of the Premium Barrier and the value of the Maturity Barrier, fixed for both up to 60% of the initial value of the underlying shares; therefore they allow you to receive quarterly premiums and protect the capital at maturity even in the event of a decline in the underlying shares up to -40% of the respective initial value.
Furthermore, starting from the second trimester, the memory effect comes into play: in particular, thememory effect allows the investor to receive, on a valuation date, a cumulative premium including all previously unpaid premiums, if the conditions for receiving the premium are met on that valuation date. Starting from the sixth month then, if on the monthly valuation dates all the shares making up the basket quote at a value equal to or higher than their respective initial value, certificates expire prematurely. In this case, the investor receives, in addition to the quarterly premium and the nominal value (100 euros), also any previously unpaid premiums.
If the certificates expire (January 17, 2025) however, two possible scenarios are envisaged. In the first case, if the quotation of all the shares making up the basket is equal to or higher than the Maturity Barrier level (60% of the initial value), the product repays the nominal value plus the premium with memory effect.
Otherwise, if the quotation of at least one of the shares in the basket is below the Barrier level at Maturity, the certificate pays an amount commensurate with the performance of the worst share in the basket (with consequent partial or total loss of the invested capital).