Reyker Dual Index Quarterly Conditional Income Plan June 2019
The notes issued by Citigroup Global Markets Funding Luxembourg S.C.A. will be unconditionally and irrevocably guaranteed by Citigroup Global Markets Limited (A+ rated by S&P, A1 rated by Moody’s and A rated by Fitch, April 2019).
This investment could potentially return a quarterly income of 1.8125%. This will only occur if both underlying indices, in this case the FTSE 100 and S&P 500, close at or above 75% of their starting levels on the quarterly observation dates. Investors will not expect either index to fall below this level on any observation date
Yes. It is possible for this investment to end early and this could happen from the end of year 2 and quarterly thereafter. This will occur if both underlying indices close at or above 105% of their starting levels on the relevant quarterly observation dates. If this does occur, investors may face a reinvestment risk.
At maturity, this investment has a capital at risk barrier feature that will determine how much, if any, of your initial invested capital you will receive. In this case, if the worst performing index has fallen by more than 35% from its starting level, you will lose capital. This will be at least 35% of your initial invested capital and potentially all of it. This is because a barrier breach will result in you losing capital on a 1 to 1 basis equal to the percentage fall in the worst performing index. For example, if the worst performing index has fallen by 70% at maturity, you will lose 70% of your initial invested capital. This barrier feature is known as a 65% European barrier and it poses a risk to your capital.
The capital at risk barrier feature gives your investment a degree of protection against a fall in the worst performing index at maturity. However, it makes this investment riskier than, for example, a bank deposit. As such, investors will not expect either index to fall by more than 35% in 10 years’ time.
Direct, Stocks & Shares ISA (new or transfer in), SIPPs/SSAS, Corporate, Charities and Trusts.
This plan offers no Financial Services Compensation Scheme protection except when Reyker holds client money pre-investment and at maturity. For more information please see the frequently asked questions section on Reykers website, or visit www.fscs.org.uk.
English law governed notes
Citigroup Global Markets Limited (http://www.citigroup.com/). The product issuer is Citigroup Global Markets Funding Luxembourg S.C.A. with a guarantee by Citigroup Global Markets Limited.
The product is designed to provide a return in the form of (1) conditional interest payments and (2) a cash payment on termination of the product. The timing and amount of these payments will depend on the performance of the underlyings. The product has a fixed term and will terminate on the maturity date, unless terminated early. If, at maturity, the worst performing underlying has fallen below its barrier level, the product may return less than the product notional amount or even zero.
Early termination following an autocall: The product will terminate prior to the maturity date if, on any autocall observation date, the reference level of the worst performing underlying is at or above its autocall barrier level. On any such early termination, you will on the immediately following autocall payment date receive, in addition to any final interest payment, a cash payment equal to the autocall payment of GBP 1,000.00. No interest payments will be made on any date after such autocall payment date.
Interest: If the product has not terminated early, on each interest payment date you will receive an interest payment of GBP 18.125 if the reference level of the worst performing underlying is at or above its interest barrier level on the immediately preceding interest observation date. If this condition is not met, you will receive no interest payment on such interest payment date.
Termination on the maturity date: If the product has not terminated early, on the maturity date you will receive:
1. if the final reference level of the worst performing underlying is at or above its barrier level, a cash payment equal to GBP 1,000.00; or
2. if the final reference level of the worst performing underlying is below its barrier level, a cash payment directly linked to the performance of the worst performing underlying. The cash payment will equal (i) the product notional amount multiplied by (ii) (A) the final reference level of the worst performing underlying divided by (B) its strike level.
Under the product terms, certain dates specified below will be adjusted if the respective date is either not a business day or not a trading day (as applicable). Any adjustments may affect the return, if any, you receive.
The product terms also provide that if certain exceptional events occur (1) adjustments may be made to the product and/or (2) the product issuer may terminate the product early. These events are specified in the product terms and principally relate to the underlyings, the product and the product issuer. The return (if any) you receive on such early termination is likely to be different from the scenarios described above and may be less than the amount you invested.
When purchasing this product during its lifetime, the purchase price does not include accrued interest on a pro rata basis
The product is intended to be offered to retail investors who fulfil all of the criteria below:
♦ they have the ability to make an informed investment decision through sufficient knowledge and understanding of the product and its specific risks and rewards, with experience of investing in and/or holding a number of similar products providing a similar market exposure, either independently or through professional advice;
♦ they seek income, expect the movement in the underlying to perform in a way that generates a favourable return, have an investment horizon of the recommended holding period specified in the key information document and understand that the product may terminate early;
♦ they accept the risk that the issuer or guarantor could fail to pay or perform its obligations under the product and they are able to bear a total loss of their investment; and
♦ they are willing to accept a level of risk to achieve potential returns that is consistent with the summary risk indicator shown in the key information document.
The product is not intended to be offered to retail clients who do not fulfil these criteria.
New investment closing date: 26 June 2019
ISA transfer closing date: 14 June 2019
> Appropriateness Questionnaire
(Please complete and return with your application form)
Please print and complete your application form together with our appropriateness questionnaire. Please send your completed forms to us at Moneyworld, 34 High Street, High Wycombe, Bucks, HP11 2AG.
1. Type of clients: retail investors who have the ability to make an informed decision through sufficient knowledge and understanding of the product and its specific risks and rewards, with experience of investing in and/or holding a number of similar products providing a similar market exposure, either independently or with professional advice
2. Investors who are seeking potential income on a quarterly basis
3. Investors will be willing and able to have their capital invested for 10 years
4. Investors will not expect the FTSE 100 or S&P 500 to fall below 75% of their starting levels on the quarterly observation dates
5. Investors will be able to bear a 100% capital loss in the worst case
6. Investors, with or without the aid of a regulated financial adviser, will ensure the product is suitable. They will also have knowledge and experience in:
– Direct investment in structured and other capital at risk products
– Understanding of what factors drive the underlying indices, in this case the FTSE 100 and S&P 500, and how movement in the underlying indices impacts the value of the investment
– Understanding the benefits and consequences of the barrier feature of this investment
– Understanding Counterparty bank risk, in this case the risk that Issuer and/or Guarantor defaults at any point during the investment term, and how this would impact any potential return from this investment
7. Targeted investors will have a well-diversified portfolio. This investment will be one component of this portfolio
8. Investors will be willing and able to take risk. They will understand that any potential return is contingent upon the performance of the worst performing index on the relevant observation dates
9. Investors will realise it is not guaranteed that this investment will return an income.