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| Home>Investments>Structured notes |
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| Citibank offers to retail investors structured notes - hybrid securities that combine the advantages of safe investment instruments (bonds) and of risky investment instruments serving as underlying assets (stocks, equity indexes, commodities). Depending on the trends in global equity markets, you can benefit from the returns on underlying assets and protect the principal at the same time. |
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| Why invest in structured notes? |
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- Principal protection of structured products with 100% protection of the invested amount if the structured note is held until maturity.
- Growth potential provided by the derivative on the underlying asset, which makes it possible to benefit to some extent from the returns on the underlying asset.
- A wide range of underlying assets.
- Various maturity of structured products.
- Structured products denominated in the main currencies - CZK, EUR, and USD.
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| How do structured notes work in general? |
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- At the beginning, the issuer of the structured note (the issuer) buys a discount bond (zero-coupon bonds), i.e., a bond which is sold at a discount on the primary market. At the maturity of the structured note, the issuer pays the bondholder 100% of the nominal value - the principal (if the issuer offers 100% protection of the capital invested).
- The issuer then uses the discount to purchase a derivative (usually an option) on a specific underlying asset.
- The price of the derivative usually does not exhaust the whole discount. The resulting difference between the discount and the price of the derivative is the margin (spread), which represents profit for the issuer (or distributor) of the structured note.
- If the value of the underlying asset changes in a way that triggers the payment of option premiums (the change in value needed to trigger the payment of the premium varies from product to product), the investor obtains the principal plus an additional payment that depends on the price movement of the underlying asset and on the formula used to calculate the premium (option payment).
- The investor may also obtain a minimum guaranteed return (coupon), if applicable.
- If, at the maturity, the value of the underlying assets has not changed sufficiently to trigger the option payment, the investor obtains the original principal (if the issuer offers protection of the invested amount) and the minimum guaranteed coupon, if applicable.
- The protection of the invested principal is subject to credit risk of the issuer and guarantee provider, if any.
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| Which assets can be the underlying assets of structured notes? |
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- Individual shares or share baskets
- Equity indexes
- Foreign exchange rates and interest rates
- Commodities and commodity indexes
- Mutual funds
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| The offer of structured notes can take the form of: |
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- A public offer under which it is possible to offer the structured note to a wide range of investors within a given territory, often accompanied by advertisements in publicly available media.
- Offers where a prospectus of the security need not be published because the offer of structured notes is limited in terms of scope and the number of potential investors.
According to existing legislation, such cases may occur particularly if:
- The lowest possible investment for one investor is equal to or greater than the amount corresponding to EUR 50,000
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- the structured product is offered to a limited range of persons whose number does not reach 100 in any Member State of the European Union, not counting qualified investors.
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| The list of issuers of structured notes is reviewed on a regular basis and includes an analysis of quantitative factors, in particular: |
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- Quality of public rating by major agencies (Moody's, S&P, Fitch)
- Development of spreads on credit default swaps (credit default swaps - CDS)
- Expected trajectory of the CDS spreads
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| Current offer |
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| We are preparing the current offer. |
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| How do I apply? |
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| Call Telebranch at +420 233 061 901, Monday - Friday 8.30 a.m. to 5.00 p.m. and arrange a meeting with a Citibank investment banker. |
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| The investment banker can meet with you at a Citibank branch or at a place of your choosing, upon mutual agreement. |
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Click on  to expand and on  to minimise the details. |
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| Important concepts: |
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| Subscription period |
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| The period during which it is possible to sign the purchase and custody agreement with an investment banker at a Citibank branch, i.e., submit a written instruction to arrange the purchase of a structured note. This period is always specified in the Information Sheet for that structured note. |
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| Principal protection |
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| Usually provided by the issuer, it is subject to the note being held until maturity (unless specific conditions for the structured bond state otherwise). |
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| Product guarantee |
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| It is provided for certain structured notes, usually by a third party, which guarantees that the issuer will pay all amounts due in relation to the structured product. |
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| Answers to other questions can be found here |
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| Notice |
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| Important notice |
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| Investment instruments are not bank deposits and are insured neither by any governmental institution nor by the Deposit Insurance Fund. They do not represent liabilities of and are not in any way guaranteed or insured by Citibank Europe plc, Citigroup Inc, or by any affiliated company directly or indirectly controlled by Citigroup Inc, unless expressly stated otherwise under a valid statute/prospectus or other binding constitutive document specifying terms and conditions for a particular investment instrument. Investment instruments are subject to investment risks and entail the risk of possible loss, including the risk of loss of the invested principal. Past or expected returns or performance of an investment instrument are neither a guarantee nor a reliable indicator of future income. The value of investment instruments can go up and down. The return of principal invested in investment instruments is not guaranteed, and expected or possible income on investment instruments is not guaranteed. Investment instruments may be subject to currency or foreign exchange fluctuations, including the risk of loss of the invested principal. This is not an exhaustive list of risks - please contact your personal banker for more information. |
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| Investment services provided by Citibank Europe plc through its branch located in the Czech Republic are provided exclusively in this territory, and generally only to tax-paying residents of the Czech Republic (within the meaning of the provisions of Section 2 of Act 586/1992 Coll., on income tax, as amended). |
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| Investment instruments must not be offered to individual persons of: |
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- The United States (U.S. Persons) which means: citizens of the U.S. or holders of U.S green cards or residents of the U.S. for the purposes of federal income tax assessment.
- Ireland (Irish Persons) which means citizens of Ireland or residents of Ireland for the purposes of income tax assessment, who are physically present in the territory of Ireland when submitting the instruction for subscription/redemption/switch of investment instruments distributed by Citibank Europe plc. Citibank is not allowed to accept from citizens of Ireland any instructions for subscription/redemption/switch of collective investing securities domiciled in Ireland.
- Australia (Australian Persons) which means citizens of Australia who are physically present in the territory of Australia when submitting the instruction for subscription/redemption/switch of investment instruments distributed by Citibank Europe plc.
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