Martin Lee @ Sg
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Citrine All Weather Booster Notes

The Citrine All Weather Booster Notes is a 3-year structured product offered by Citrine Global Finance. It is on offer until 12th September 2008 and has a minimum subscription of $5000.

The notes offer a coupon payout of 3% p.a. every three months. At the end of every year, there could also be an equity linked payout depending on the performance of 5 companies listed on SGX:

  • DBS
  • City Development Limited
  • Keppel Corp
  • OCBC
  • Singtel

The issuer will first determine an upper and lower coupon barrier for all 5 stocks. These are set at 110% and 90% of their initial price.

Just for illustration, these are the lower and upper coupon barrier if we take yesterday’s closing price as the initial price:

  • DBS – 16.38, 20.02
  • CDL – 8.78, 10.74
  • Keppel – 8.15, 9.97
  • OCBC – 7.26, 8.88
  • Singtel –  3.13, 3.83

How the equity linked payout works is that on every business day where the closing price of ALL 5 shares fall between their lower and upper coupon barrier, the equity linked coupon will accured at the rate of 7% p.a. The final payout will be the sum of the total less 3%.

For example, assuming the prices fall within the range for 180 out of 250 business days, the equity linked payout is determined as follows:

(180/250 x 7) – 3 = 2.04% p.a

Based on the formula, it means you will only receive an equity linked payout if the prices fall within the lower and upper coupon range for more than 107 business days.

In current market conditions where volatility is high, the risk is that if just one of the 5 counters falls outside the lower and upper coupon barrier, you will not get any equity linked coupon payout.

If you are considering investing in the Citrine All Weather Booster Notes, remember to read carefully the risk factors from page 8 of the pricing document below:

Citrine All Weather Booster Notes Document

Note that while the principal is protected upon maturity, redemption of the notes at 100% of the principal value is not guaranteed. There could be certain events that could trigger an early redemption. Again, read the risk factors in the pricing document for more details.

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Leave a Comment:

bukem says 12 years ago

Hi lioninvestor, good job here.

Another product of concern looks like GE greatlink choice. CDO like product. The indicative prices have dropped by alot.

Check the factsheets; all the names are inside:

Wasington Mutual
Bradford & Bingley
Bear Stearns

This looks like another minibomb unless GE investors are more savvy than DBS’s etc..

lioninvestor says 12 years ago

It depends on their terms of their offer. Most probably they will take over.

You might want to get a confirmation from the distributor you bought it from.

Lee Marn Seng says 12 years ago

Now that Merrill Lynch is sold to BOA, how will investment in the All Weather booster notes affected? Is BOA obliged to take over the obligations of Merrill Lynch?

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