Five-way collateralisation

Investec has taken collateralisation one step further by structuring a a five-year at-risk kickout product linked to the FTSE 100 that is supported by the bonds of five banks. While credit risk is diversified across five institutions, if one goes bankrupt investors’ capital will be impaired

 

This is a five-year at-risk kickout that kicks out if the FTSE 100 is above the strike level on one of the first four anniversaries. Kickout will not occur if the index is equal to or below the strike level, and the product will continue until the trigger level is reached on one of the anniversaries.

If kickout occurs on the first anniversary, investors will receive a 10% return. If kickout occurs on second anniversary, investors will receive a 20% return, and if it occurs on the third or