UniCredit recently issued the new Step-Down Cash Collect Worst Of on baskets of Italian and international indices and shares which offer quarterly bonuses with memorandum effect. It is an evolution of the normal Cash Collects that brings together different 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.
Operation
Step-Down Cash Collect Worst Of certificates with memory effect allow you to receive quarterly premiums from 0.90% to 5.15% if on the observation dates the underlying of the basket with the worst performance has a value equal to or greater than the premium barrier, mail for this issue at 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 worst underlying is equal to or higher than the barrier. Furthermore, starting from March 2023, the certificates can be redeemed early if, on the quarterly observation dates, the value of the underlying is equal to or above the early redemption level. Thanks to the Step-Down mechanism, the level of early repayment it decreases by 5% every two observation dates up to 80% of the initial value: 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 (September 2026) three scenarios are possible. If the value of the worst performing underlying is equal to or greater than the premium barrier (60% of the initial value), the instrument redeems the nominal amount in addition to the premium and any previously unpaid premiums; if the worst value is lower than the premium barrier but equal to or higher than the capital barrier (set between 40% and 50% of the initial value), the instrument redeems only the nominal amount; if the worst value is below the capital barrier, 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.
Baskets for all tastes
In this new issue from UniCredit, the baskets have been conceived both from a sectoral and non-sectoral perspective, therefore built on a particular investment theme. You can point to the banking sector with the certificate (ISIN DE000HC0DFP9) on the basket formed by BNP Paribas, Deutsche Bank and Intesa Sanpaolo. The product has a 60% premium barrier and offers a 3.3% quarterly conditional premium. The capital barrier is 50%. Another interesting certificate (ISIN DE000HC0DFQ7) on the basket linked to the automotive sector consisting of Ferrari, Ford Motor and Tesla, which has a premium barrier of 60% and a quarterly coupon of 5.15%.
Finally, there are certificates with underlying equity indices (ISIN DE000HC0DFU9) like the one on Dax, Ftse Mib and Nasdaq 100. The product has a premium barrier placed at 60% and offers a quarterly coupon of 0.9%.
You can get product information updated in real time on the site www.investimenti.unicredit.it