Citigroup launches a six-year capital-protected income product, Snowball, into the Italian marketplace next Monday.
The product is the fourth issue from Citigroup’s Equity First brand, which launched in Italy in 2005. The highly innovative products are divided into three ranges: Protection First for investors keen on protecting their capital, Performance First, which has a greater exposure to equity markets, and Opportunity First for investors ready to risk their capital.
Director of equity derivatives Guido Rizzato said the brand has so far focused on the Protection First range to meet the demand for capital protection made by the majority of investors. Snowball is the last launch in this range.
Citigroup is planning to issue structured products on a monthly basis in 2006, mainly in the Protection First and Performance First ranges. Rizzato said products will be tailored to clients’ requests and market conditions, with specific attention to innovation in underlyings and structures.
Snowball is linked to a basket of six international indices and has an early maturity feature. It pays a 3% coupon in the first year and a 5% coupon in subsequent years provided none of the indices has fallen by more than 10% since inception.
If in any year the conditional coupon is not attributed then it is reimbursed if the above condition is met. If the 5% coupons are not attributed by the end of the investment period, the product guarantees a minimum capital return of 103% at maturity. The product matures once the sum of the conditional coupons has reached 10%.
Snowball will be available until 23 February. Minimum investment is €1,000.
This product will be available soon in Recent Additions (Italy).
