UniCredit has recently issued the new Step-Down Cash Collects with memory effect, an evolution of the normal Cash Collects which brings together various elements sought after by investors and which blend well with the current market.
First, the barrier to maturity allows a greater resilience of these products to any phases of volatility that could still characterize the market. In fact, the verification of the level of the underlying with respect to the barrier for the payment of the capital at maturity is carried out only at the maturity of the product. Furthermore, these certificates boast thememory effect which allows you to subsequently recover the unpaid coupons and theautocallability. The latter is the characteristic that the product expires in advance under certain conditions, returning the capital plus the final coupon and any previously unpaid coupons. But theStep-Down effect adds another feature. The trigger level for early redemption decreases over time, making early redemption more likely. An element that, in uncertain market situations, can prove to be very functional.
How do they work?
Step-Down Cash Collect certificates with memory effect allow you to receive quarterly premiums if on the observation dates the underlying has a value equal to or greater than the barrier level set for this issue between 50% and 60% of the initial value. Thanks to the memory effect, the premiums not paid on the respective observation dates are paid after the first observation date in which the value of the Underlying is equal to or higher than the barrier level. Furthermore, starting from the sixth month (2nd quarterly observation date) the certificates can be redeemed early if, on the quarterly observation dates, the value of the underlying is equal to or higher than the early redemption level. Thanks to the Step-Down mechanism, the level of early repayment it decreases by 5% every two observation dates: in this way the certificates can be redeemed early even if the value of the underlying has fallen with respect to the initial reference value, within the limits of the early redemption threshold level.
If the certificate expires (July 17, 2025) two scenarios are possible. If the value of the underlying is equal to or greater than the barrier level, the instrument redeems the Nominal Amount in addition to the premium; if the value of the underlying is below the barrier level, a value equal to the performance of the underlying is paid. In this case, the certificate does not protect the invested capital and the investor will be exposed to the risk of even total loss of the invested capital.
Wide variety of underlyings
The possibilities offered by the new UniCredit Step-Down Cash Collect range are different. Among the underlyings we find some big names in Piazza Affari, the most important European stocks and some big American ones. The products are therefore well diversified by sector in order to allow implementation of various strategies. Quarterly coupons with memorandum effect vary from 1.55% of the certificate with Assicurazioni Generali underlying (ISIN DE000HB8KNM9) up to 9.1% of the product built on Beyond Meat (ISIN DE000HB8KNK3).
You can get product information updated in real time on the site www.investimenti.unicredit.it