Illustration on Bond Linked Investment3)
|
Investment Currency
|
:
|
Rupiah (IDR)
|
|
Placement principal (Investment Currency)
|
:
|
IDR10,000,000,000
|
|
Underlying Asset
|
:
|
FR 95
|
|
ISIN No.
|
:
|
IDG000020702
|
|
Purchase Amount of Underlying Asset
|
:
|
IDR10,000,000,000
|
|
Interest Rate (Indicative BLI yield)
|
:
|
7.00% p.a.
|
|
Tenor
|
:
|
6 months (184 days)
|
|
Indicative Market Price
|
:
|
98.50
|
|
Indicative Clean Strike Price
|
:
|
98.50
|
|
% Accrued Interest of Underlying Asset
|
:
|
1.50
|
|
Indicative Gross Strike Price
|
:
|
100.00
|
Possible scenarios that Customer may have:
Scenario 1
If on the fixing date (commonly maturity date of Bond Linked Investment) market price for bond FR95 is above the Strike Price (99.50), you will receive the principal and interest in investment currency (IDR) with calculation as follows:
| Principal |
= |
IDR10,000,000,000 |
| Interest |
= |
IDR10,000,000,000 x 7.00% x 184 days / 360 days |
| |
= |
IDR357,777,778 |
| Interest |
= |
IDR71,555,556 |
| Principal + Net Interest |
= |
IDR10,286,222,222 (after tax) |
In scenario 1, You will receive 100% principal return and net interest payments after tax in Investment Currency.
Scenario 2
If the opposite happens, i.e. on the fixing date, the Underlying Asset (Bond) is exactly or below the Strike Price (≤ 98.50), then your principal funds in the base currency (IDR) will be converted to the Underlying Asset using the Gross Price @100 (Strike Price 98.50 plus accrued interest of 1.50). You will receive the Underlying Asset (Bond) 2 business days after fixing date.
| Principal (FR95) |
= |
IDR10,000,000,000 |
| Interest |
= |
IDR286,222,222 (after tax) |
In scenario 2, you receive principal in the form of the Underlying Asset according to Strike Price and net interest payments after tax in Investment Currency. If you wish to convert back into the Investment Currency, you must use the prevailing market price which could potentially incur loss to you. However, the interest you receive will help reduce the risk of possible loss when converted to the Investment Currency.
3)Any figure, data and information used is only for illustrative purposes and does not represent the exact proceed which may be received by the Customer and does not explain all possibilities which may arise and affect the proceed from this Bond Linked Investment transaction. Should the Customer have any inquiry or need additional information, the Customer can contact UOB Global Markets Sales or the Bank’s Marketing.
Withdrawal/Drawdown Prior to the Maturity Date
- Bond Linked Investment product is highly not recommended to be withdrawn or drawn down prior to the maturity date as Customer will not be entitled to the corresponding Bond Linked Investment interest and there may be fee/penalty to be incurred to Customer, namely:
- Bond Option Derivative Termination/Unwind Fee
- Bond Linked Investment Break Penalty
- The Customer must submit a formal letter of request in free format to the Bank to make Withdrawal/Drawdown Prior to the Maturity Date.
Calculation Illustration
On the 60th day, the Customer requests for withdrawal/drawdown prior to the maturity date.
| Unwind fee of Customer's Bond Option Position* |
= |
IDR (-30,000,000) |
| Bond Linked Investment Break Penalty* |
= |
2.0% |
| Calculation of fund to be received |
| Placement in Bond Linked Investment |
= |
IDR10,000,000,000 |
| Unwind fee of Customer’s Bond Option position |
= |
IDR(-30,000,000) |
| Bond Linked Investment Break Penalty (2.0%) |
= |
IDR(-200,000,000) |
| Amount to be received by Customer |
= |
IDR9,770,000,000 |
| Total Customer Loss |
= |
IDR230,000,000 |
*Bond Option Derivative Termination Fee and Bond Linked Investment Break Penalty will be determined by the Bank.
