ER Goal with Conditional Coupon on Alibaba
Underlying: Alibaba SSPA/EUSIPA Product Type: Reverse Convertibles (1220) Valor: 34639700 / ISIN: CH0346397000
|Coupon p.a.||8.12% p.a.|
|Sideways return||-- / --|
|Days to expiry||393|
Tax information Switzerland
|Swiss income tax||Yes|
|Last trading date||22.05.2018|
|Coupon payment dates||01.03.2017, 30.05.2017, 29.08.2017, 30.11.2017, 01.03.2018, 30.05.2018|
With UBS GOALs (Money or Equity Delivery), also known as Reverse Convertibles, investors with a moderate-to-high risk tolerance in sideways moving markets can optimize their opportunities to earn yields thanks to a coupon. While the coupon is always paid out, the type and amount of the repayment of the nominal amount on expiration is aligned to the price of the underlying asset (e.g. individual equity, share index, equity basket, currency pair or commodity).
At maturity, investors receive a cash payment of the invested capital (nominal) in full if the price of the underlying asset falls above the pre-defined base price (strike). If the price of the underlying asset falls below that price, however, investors receive either an equity delivery of the underlying asset or the then-applicable value of the underlying asset in cash (adjusted by the respective subscription ratio) at maturity, depending on the structure of the product.
A potential loss is cushioned by the coupons compared to direct investments, as investors are due interest payments on these irrespective of the performance of the underlying asset. If the price of the underlying asset declines, the capital invested may be lost despite the coupon. In addition, the issuer risk must be taken into consideration, since the capital invested could be lost if UBS AG becomes insolvent – irrespective of the performance of the underlying asset.
A more detailed product description is available in our brochure "Knowledge in a nutshell".