Wealth Preservation Programme, Apendix III

Principal Protected Notes

A principal protected note is a way of investing in a risk-related market (stocks, hedge funds, currencies, metals, etc), at a reduced level of risk. It is a bond, issued by a bank, which pays interest at maturity. But rather than a traditional coupon, the interest comes in the form of participation in the return of a linked asset or market. Should the linked asset depreciate in value during the life of the bond, the bond is redeemed at maturity by the bank, at nominal value – thus protecting the client’s investment.

Characteristics:

Current subscriptions for the Wealth Preservation Programme:

  1. 5-year note, linked to a basket of US stocks, USD denominated, 100% protection of nominal investment, 160% participation in the return of the equity basket.
  2. 2. 5-year note, linked to S&P BRIC 40, USD denominated, 100% protection of nominal investment, 90% participation in the return of the index
Market Link Time to maturity Subscription price Participation rate Guarantee at maturity
US stocks 5 years 100 160% 100%
BRIC (SBR 40) 5 years 100 90% 100%

US Stocks

• Pfizer Inc
• Colgate-Palmolive Corporation
• IBM
• Johnson & Johnson
• Coca-Cola

• McDonalds
• H.J. Heinz
• Kimberly-Clark Corporation
• Kraft Foods
• Yum! Brands

Nordica Investment Allocation Model

Portfolio 70
Provides for 70% protection of total investment amount and 17,5% direct exposure to stocks.


Portfolio 80
Provides for 80% protection of total investment amount and 7% direct exposure to stocks.