NH Investment & Securities Issues 2821st Foreign Currency ELB Linked to Hyundai Motor with Principal Protection Features Investor Risk Analysis
NH Investment & Securities issues the 2821st Equity-Linked Bond ELB worth USD 9.95 million approximately KRW 15.39 billion with Hyundai Motor common stock as the single underlying asset.
This product is classified as low risk offering a maximum pre-tax return of 8.10% per annum subject to monthly coupon payments triggered when the underlying stays above 65% of the initial strike and full principal repayment upon auto-call or maturity if the underlying is above 75% of the initial strike.
Even if the underlying falls below 75% at maturity the bond guarantees 100% principal repayment but investors face issuer credit risk potential principal loss upon early redemption and currency exchange risk.
The ELB is not listed on the Korea Exchange resulting in limited liquidity and while the issuer NH Investment & Securities holds a AA+ credit rating it is not protected by the depositor protection scheme.
Proceeds will be used for hedging transactions and purchases of high-grade bonds and deposits with no direct impact on capital changes or shareholder dilution.
[AI Summary]NH Investment & Securities foreign currency ELB issuance is a debt financing without capital change posing no dilution to existing shareholders but investors must consider issuer credit risk and exchange rate risk. Although the structure guarantees principal at maturity potential loss from early redemption exists and the underlying Hyundai Motor stock volatility of 80.55% is a notable risk factor.