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MLI Coupon Plus - Australian Resources Shares
Deferred Purchase Agreement
AUD Series 2008-07
USD Series 2008-07
This product is not available for subscription.
Click here for Product Performance Updates.
MLI Coupon Plus offers Investors exposure to Australia's fastest
growing sector with an attractive fixed coupon paid quarterly until a Call
Event occurs. Your return is linked to the performance of 3 of Australia's
largest resource stocks these being: BHP Billiton Limited ("BHP"), Lihir Gold
Limited ("LGL") and OZ Minerals Limited ("OZL").
The MLI is a short-term investment linked to the performance of the above
three Australian resources companies ("Reference Shares"). The Coupon Amounts
are paid quarterly regardless of the performance of the Reference Shares until
a Call Event occurs. A Call Event is deemed to have occurred on a quarterly
Call Event Observation Date if all three Reference Shares close at or above 90%
(the "Call Event") of the Initial Price. If a Call Event occurs, the MLI
matures and the Final Value per MLI will be 100% of the Issue Price. The
investor will also receive the Coupon Amount due on that date. Should one or
more Reference Shares close below 90% of the Issue Price, a Call Event will not
occur but the quarterly Coupon Amount will be paid.
If on maturity a Call Event
has not occurred on any Call Event Observation Date prior to maturity, whether
the Final Value per MLI of 100% of the Issue Price is repaid depends on three
factors:
- If all three Reference Shares close at or above 90% of the Issue Price on
the scheduled Maturity Date then a Call Event will occur on the Maturity
Date and the Final Value per MLI will be 100% of the Issue Price. In
addition, the investor will also be entitled to the final Coupon Amount due
on the Maturity Date.
- If one or more reference shares close below 90% of the issue price on the
scheduled Maturity Date and no Knock-In Event has occurred (i.e. a 40% or
greater drop from the Initial Price) at any time during the investment
term, the Final Value per MLI will be 100% of the issue price. In addition,
the Investor will also be entitled to the initial Coupon Amount due on the
Maturity Date.
- If a Call Event does not occur on the Maturity Date and a Knock-In Event
has occurred (i.e. a 40% or greater drop from initial share price) at any
time during the investment term, the Final Value per MLI will reflect the
fall in value on the Maturity Date of the Worst Performing Reference Share.
The investor will also be entitled to the final Coupon Amount due on the
Maturity Date.
Investment Profile
| Time Horizon - In Years |
1 or Less |
2 |
3
|
4
|
5 or more |
Open-ended |
| Risk |
Very Low |
Low
|
Moderate |
High |
Very High |
Speculative |
| Investment
Objective |
Full Protection
|
Partial Protection |
Conditional Protection |
No Protection |
Income |
Growth
|
Investment Objectives
| Investor Seeks |
Investor Can
Accept |
| Enhanced yield and 3 Coupon Payments
only if the structure reaches the Maturity Date. |
The possibility of having exposure to
the Worst Performing Reference Share if a Knock-In Event (closing
Reference Price falls below 60% of Initial Price) occurs and a Call
Event does not occur (all Reference Shares exceeding 90% of Initial
Price on a Call Event Observation Date).* |
| A short-term investment. |
The risks associated with investing in
equities and equity linked investments.* |
| The possibility of a Call Event
occurring and receiving the Investment Amount if the Official Closing
Price of each Reference Share is equal to or greater than 90% of the
Issue Price on a Call Event Observation Date. |
The risks associated with investing in
short-term financial products.* |
|
The possibility that returns could be
less than the return you could earn on other investments including the
actual return on the Reference Shares.* |
|
An investment structured as a deferred
purchase agreement and the ability to accept delivery of shares of BHP
Billiton. |
|
Currency exposure if investing in the
USD denominated MLI. |
|
No dividends to be received on the
Reference Shares if any are offered. |
|
No secondary market will exist for the
MLI. |
* For more details on risks on investing in the MLI, please refer to Section 2
of the PDS.
Offer Summary
To view a summary of the Offer click
here
Risk Factors
There are a number of risks associated with the MLI and investments in equity
markets generally. Some of the key risks include:
- Conditional Protection
- Market Risk & Economic Factors
- Credit worthiness of the Issuer
- Early Maturity Risk
- Event Risk
- Liquidity Risk
- Interest Rates
- Tax
- Potential conflicts of Interest
- Performance and factors affecting the Reference Shares
- Potential Conflicts of interest
- Currency Risk
- Investment Decisions
A more detailed explanation of the risks associated with an investment in
the MLI are set out in the PDS dated 20 August 2008. Investors should read the PDS and consider the Risk Factors before making a decision to invest.
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More Information
For further information on Structured Financial Products contact the Citigroup Equity Structured Products Service Centre.
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