Airbag certificates offer conditional capital protection against downside losses to a predefined minimum level while allowing unlimited participation in upside movements. They provide protection similar to an airbag in a car, protecting effectively up to a point but not for severe crashes. The protection level does not change over the lifetime of the product. While airbag certificates offer upside potential if the underlying trades sideways or lower, investors must understand the risks, as protection is only provided up to the minimum level and not beyond.

1. STRUCTURED
PRODUCTS
GUIDE
MAKING A
SENSE OUT
OF IT

2. Airbag
Airbag Certificates (Parachute
Certificate, Cushion Certificate)
A certificate that offers protection
against downside losses to a pre-
defined minimum level but allows an
unlimited participation in upside
movements of the underlying.
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3. Participation Products
Airbags is a sub-category of Participation Products.
Participation products offer unlimited participation on the
performance of the underlying. Many participation
products offer conditional capital protection that
deactivates when a certain barrier is reached during the
lifetime of the product.
The downside risk is often the same as a direct
investment in the underlying. These products are
suitable for an investor with a certain risk appetite. The
market expectation may be either bullish or bearish.
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4. Categories
of Participation Products
Tracker
Certificates
Airbag Bonus
Certificates Certificates
Participation
Products
Twin-Win Outperformance
Certificates Certificates
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5. Airbag Structure
Profit Airbag certificates offer
unlimited participation on an
increasing underlying.
They offer conditional
capital protection and an
0 above-average return if the
underlying trades sideways
or slightly lower
underlying
Limited protection level
Loss
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6. Limited Protection
“Airbag certificates” provide partial capital protection.
Just like the real airbags, it will protect you quite effectively
up to a point, but if the crash is a severe one, you can’t count
on it!
E.g., if the index ended up at 70% of the original index level,
within the airbag range, an investor would get 100% of the
issue price back. If it ended up at 60% of the original level,
an investor would get 60% of the original issue price,
because the index level is outside the airbag zone.
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7. The beauty of Airbag
The protection level of the Airbag doesn’t knock-
out. It stays until the maturity of the product no
matter.
Above-average return if the underlying security
trades sideways or slightly lower.
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8. Conclusion
• Airbag structures have their pro
and cons. So understanding
the risk of these products
before investing will be the
most important!
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