CIMB Structured Deposits/ Structured Deposits questions

[teckgamer]

Hi all, I am currently looking at structured deposits (Just exploring an option). I have some questions with regards to CIMB CapitalGuard - Series 1 (Subscription is already closed)

Redemption Amount at maturity: 100% of principal amount (less any early redemption) by the issuer if held to maturity, subject to any Market Disruption Event.


Principal Guaranteed
CIMB CapitalGuard - Series 1 is a Principal Guaranteed Structured Deposit by CIMB Bank Berhad. The principal is guaranteed by the Bank if held to Maturity Date. There is no other Third Party Principal Protection involved

So is the principal guaranteed? From what I understand from the first line, the principal is not guaranteed because it is subjected to Market Disruption Event.
But the second line says otherwise??

So is it guaranteed?

I understand that DBS High Note 5 was a let down. What are your opinions about structured deposits?

 

[Shiny Things]

Hi all, I am currently looking at structured deposits (Just exploring an option). I have some questions with regards to CIMB CapitalGuard - Series 1 (Subscription is already closed)

Redemption Amount at maturity: 100% of principal amount (less any early redemption) by the issuer if held to maturity, subject to any Market Disruption Event.


So is the principal guaranteed? From what I understand from the first line, the principal is not guaranteed because it is subjected to Market Disruption Event.
But the second line says otherwise??

So is it guaranteed? I understand that DBS High Note 5 was a let down.

This is a different sort of structure to High Notes 5. In the High Notes structure, you bought what was called a "first-to-default CDS", where your entire principal gets wiped out if any one of a selection of companies defaults. This one is a structure where you buy an exotic option on a couple of companies - so the only thing at risk is the amount you've paid for the option.

The "market disruption event" language refers to how they get their sources for the final fixing - the share prices on the observation dates. It doesn't refer to the principal.

That said, if CIMB defaults - then, yes, you'll have to line up with the rest of the unsecured creditors.

What are your opinions about structured deposits?

They're a giant fücking ripoff, and I should know.

I wrote this a few hundred posts back, but it bears repeating: I've sold (as a trader) and bought (as a customer) structured deposits. The markups for the bank are GIGANTIC - as much as 5% of the amount you deposit. The only winner is the bank.