Gold certificates

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Gold certificates

  1. 1. Final Terms, 4 November 2010Gold (Troy Ounce) in EUR – Collateralized with physical GoldOpen end as of 11 November 2010These Tracker Certificates are structured financial instruments that offer the investor the opportunity to participate in an efficient and transparent manner in theperformance of gold. In addition to a cash settlement, every investor can also request physical delivery of gold (see "Investors Right of Termination (Physical Delivery)").Investors claims under the Tracker Certificates are protected due to the arrangement under which the Issuer, for the benefit of the investors, transfers physical gold in theform of standard bars as collateral under the terms of a transfer of ownership by way of security ("Sicherungsübereignung") to the Holder of Assigned Collateral, ClaridenLeu Metal Ltd. Acting in its own name but for the account of the investors the Holder of Assigned Collateral holds the physical gold for safekeeping at SIX SIS Ltd in Olten(see "Assignment of physical Gold as Collateral"). The quantity of the Collateral will be reconciled at issuance, with each increase as well as periodically by SIX SIS Ltd.Moreover, SIX SIS Ltd verifies whether the required amount of gold has been deposited. Therefore, the investor is not subject to the risk of an impairment of the Issuerscreditworthiness (see "Risk").These Tracker Certificates do not constitute collective capital investments within the meaning of the Federal Act on Collective Investment Schemes (CISA).Accordingly, they are not subject to the regulations of the CISA or the supervision of the Swiss Financial Market Supervisory Authority (FINMA). Consequently,investors do not have the benefit of the specific investor protection provided by the CISA.Your market expectation: positiveIssuer Clariden Leu Ltd., Zurich (Moody’s Rating: Aa2)Lead Manager Clariden Leu Ltd., ZurichHolder of Assigned Clariden Leu Metal Ltd., ZurichCollateralUnderlying Underlying Bloomberg Initial Fixing Price 1 Troy Ounce of Gold XAUEUR <Curncy> EUR 968.443Swiss Sec. Number / ISIN 11 246 487 / CH0112464877 (WKN: CLA3RZ)Ticker GOLEUProduct Category Complex product. Complex products require specific knowledge regarding the product and its associated risks. Therefore, it is recommended that the investor obtains adequate information regarding the risks associated with the specific product before making an investment decision. For more information on the product’s risks, please see page 4.Product Type Participation Product (Tracker Certificate: category 1300), according to the Swiss Derivative Map of the Swiss Structured Products Association (www.svsp-verband.ch)Issue Price EUR 968.443 (100% of the Initial Fixing Price)Issue Size 30,000 Tracker CertificatesRatio 1 Tracker Certificate corresponds to 1 Underlying on the Initial Fixing Date. Due to the Management Fee the Ratio will be reduced continually during the term of the Tracker Certificates, i.e. 1 Tracker Certificate corresponds to less than 1 Underlying after the Initial Fixing Date.Initial Fixing Price 100% of the official EUR P.M. Fixing of the Underlying (Bloomberg: GOLDECPM <Index>) on the Initial Fixing Date at approx 3:00 p.m. London time, as determined by the London Bullion Market Association (LBMA)Initial Fixing Date 4 November 2010Payment Date 11 November 2010Term Unlimited term ("open end"), subject to the Termination by the Issuer or the occurrence of a Winding-up EventManagement Fee 0.30% p.a. (calculated on the basis of one Troy Ounce of Gold, will be included directly in the value of the Tracker Certificates)Issuers Right of The Issuer has the right to redeem the Tracker Certificates quarterly on the first Friday of March, June, September and December of each yearTermination (the "Termination Date") without giving reasons by giving no less than 30 calendar days notice.Investors Right of In addition to a secondary market sale, the investor may tender his Tracker Certificates for redemption on 30 September of each year (theTermination "Tender Date") by delivering notice to the Calculation Agent at least 5 Business Days before the Tender Date.(Cash Settlement)Redemption After notice of termination has been given (see "Issuers Right of Termination" and "Investors Right of Termination (Cash Settlement)") the investor receives a cash payment in the Redemption Amount for each Tracker Certificate that is being terminated, 10 Business Days after the Tender Date or Termination Date, respectively. The Redemption Amount for each Tracker Certificate corresponds to (i) the official EUR P.M. Fixing of the Underlying on the Final Fixing Date, or (ii) the arithmetic mean of the official EUR P.M. Fixings of the Underlying on the Final Fixing Date and the two Business Days immediately following the Final Fixing Date, as determined by the Calculation Agent on the Final Fixing Date in the investors interests, taking into consideration any supply surplus present during this period (the "Final Fixing Price"), less Management Fee incurred. The Final Fixing Price will be calculated by the Calculation Agent in accordance with the formula set out under "Redemption Amount". The Final Fixing Date corresponds to the Tender Date or the Termination Date, as the case may be.Information / Trading Clariden Leu Ltd. Telephone: +41 (0) 844 844 002* Structured Products E-mail: info@myproducts.ch CH-8070 Zurich Internet: www.myproducts.ch * Please note that conversations on this line are recorded. We will assume your consent. The original version of this termsheet is in German, versions in other languages are non-binding translations only. This termsheet does not constitute a prospectus in the sense of Art. 652a resp 1156 of the Swiss Code of Obligations nor a simplified prospectus within the meaning of Art. 5 of the Collective Investment Schemes Act (CISA). This document is for information purposes only and summarizes the Terms and Conditions of the Tracker Certificates.Tracker Certificates on Gold (Troy Ounce) in EUR – Collateralized with physical Gold Page 1 of 4
  2. 2. Redemption Amount ULt × (1 − MF ) t / 365 where: ULt The Final Fixing Price determined according to the procedure described under "Redemption" MF Management Fee t Number of calendar days from and excluding the Initial Fixing Date up to and including the Final Fixing DateInvestors Right of Investors may tender their Tracker Certificates for physical delivery once per month; delivery is restricted to the following units:Termination - 1-ounce coins embossed with "Clariden Leu" with a fineness of at least 999.9/1000,(Physical Delivery) - bars weighing 1 kg with a fineness of at least 999.9/1000, or - standard bars weighing approx. 12.5 kg with a fineness of at least 995/1000. Physical gold will be delivered at the investors costs. Additional customary units may be provided upon request, subject to availability and at the Calculation Agents sole discretion; production surcharges will be due on the date of delivery and are borne together with other costs by the investor. The delivery date may be postponed in such cases. Notice of tender must be received by the Calculation Agent no later than 10 Business Days before the 10th calendar day of the month (the "Request Date") in each case and must be combined with a request for physical delivery. After receipt of the notice of tender and the request for physical delivery the investor will be notified of the date, the location, and the cost of the delivery. The desired unit is delivered no more than 10 calendar days following the Request Date to the principal registered office or a branch of the Calculation Agent in Switzerland or to third party banks in Switzerland. Depending on the quantity to be delivered, delivery may be delayed. Deliveries cannot be made to locations outside of Switzerland. Further information about deliveries to third party banks in Switzerland can be found in the terms and conditions of the Tracker Certificates (the "Terms and Conditions"). The right to require redemption (physical delivery) is subject to measures in line with monetary policy or other restrictions which prohibit or prevent or, in the view of the Calculation Agent, inhibit the delivery of physical gold in an unreasonable manner. On the Request Date, the Calculation Agent calculates the quantity of gold to be delivered for redemption of the tendered Tracker Certificates on the basis of the weight and fineness of the unit chosen, taking into account the Management Fee incurred. With respect to the unit chosen, there may be a range of fineness which will result in a minor price difference. The Calculation Agent determines the allocation of the standard bars. Fractions, if any, will be paid out in cash. The cost of delivery depends on the value of the gold to be delivered and on the cost of embossing the required quantity of gold, and has to be settled by the investor prior to delivery. The charge for deliveries within Switzerland is subject to Swiss value added tax.Early Termination In case of a Winding-up Event, all Tracker Certificates will become due automatically and with immediate effect. The Redemption Amount corresponds to the official EUR P.M. Fixing of the Underlying on the date on which the Winding-up Event occurs (the "Winding-up Date"). In the event that a Winding-up Event occurs after Tracker Certificates have been tendered by investors (see "Issuers Right of Termination" and "Investors Right of Termination") but before the respective Tender Date and the Request Date, respectively, the rules on Early Termination apply.Assignment of physical For the benefit of the investors, the Issuer agrees to transfer physical gold in the form of standard bars, each weighing approx. 12.5 kg and withGold as Collateral a fineness of at least 995/1000, as part of a transfer of ownership by way of security («Sicherungsübereignung») to the Holder of Assigned(German: Besicherung) Collateral (acting as trustee in its own name but for the account of the investors) as collateral for the Tracker Certificates (the "Collateral"). This is to ensure that the payment obligations of the Issuer under the outstanding Tracker Certificates are collateralized at all times. The investors do not have a direct security interest in the Collateral but a claim to the proceeds of the liquidation in case of a Winding-up Event. Should the quantity of the Collateral on the issue date and Payment Date, respectively, fall short of the quantity necessary to collateralize the total of the Issuers payment obligations, SIX SIS Ltd is authorized, based on an agreement with the Issuer, to block the issuance or increase of the respective Tracker Certificates as well as the transfer of the respective proceeds for the benefit of the investors. The conditions of the assignment of collateral are set forth in an agreement on the assignment of collateral between the Issuer and the Holder of Assigned Collateral (the "Collateral Agreement"). The sole purpose of transfer of ownership by way of security is to collateralize the investors claims under the Tracker Certificates. The Holder of Assigned Collateral is commissioned jointly by the investors in the Terms and Conditions. It acts as indirect representative for all investors, holding title to the Collateral in its own name but for the account of the investors. Also in the event of a liquidation of the Collateral the Holder of Assigned Collateral acts in its own name but for the account of all investors. Should the Holder of Assigned Collateral file for bankruptcy, the investors are jointly authorized to recover the gold deposited as Collateral from the Holder of Assigned Collaterals bankruptcy estate and have it liquidated in case of a Winding-up Event. The Issuer reserves the right to appoint, under certain conditions, a successor Holder of Assigned Collateral who will hold the Collateral and assume all rights and duties of the Holder of Assigned Collateral under the Collateral Agreement. The quantity of the Collateral will be adjusted accordingly in case of an increase or decrease of the number of Tracker Certificates outstanding. Consequently, in the event of an increase, the Issuer has to transfer physical gold to the Holder of Assigned Collateral in an amount necessary to cover the increase in the Issuers payment obligations under the outstanding Tracker Certificates and increase the Collateral accordingly. In the event of a decrease, the Issuer may request the return of Collateral in the quantity as it ceases to be necessary to cover the Issuers payment obligations.Information / Trading Clariden Leu Ltd. Telephone: +41 (0) 844 844 002* Structured Products E-mail: info@myproducts.ch CH-8070 Zurich Internet: www.myproducts.ch * Please note that conversations on this line are recorded. We will assume your consent. The original version of this termsheet is in German, versions in other languages are non-binding translations only. This termsheet does not constitute a prospectus in the sense of Art. 652a resp 1156 of the Swiss Code of Obligations nor a simplified prospectus within the meaning of Art. 5 of the Collective Investment Schemes Act (CISA). This document is for information purposes only and summarizes the Terms and Conditions of the Tracker Certificates.Tracker Certificates on Gold (Troy Ounce) in EUR – Collateralized with physical Gold Page 2 of 4
  3. 3. The Collateral is held for safekeeping with, and held in accordance with customary diligence at, SIX SIS Ltd in Olten. The Collateral will be deposited outside of the exclusive access of the Issuer. The quantity of the Collateral will be reconciled periodically by SIX SIS Ltd. The Issuer reserves the right, however, to deposit the Collateral with an independent bank in Switzerland for safekeeping. The sole purpose of the Holder of Assigned Collateral in connection with the Tracker Certificates is to receive and hold the Collateral as trustee in its own name but for the account of the investors. In accordance with the purpose of the company and its articles of association, the Holder of Assigned Collateral is in principle not permitted to enter into any material obligations beyond its purpose or to exercise any other activity not related to its function as Holder of Assigned Collateral, except to act as holder of collateral assigned for other financial instruments issued by the Issuer. The claims of the investors against the Holder of Assigned Collateral are limited to the Collateral or to the proceeds from the liquidation of the Collateral, if any, respectively. Investors will have no further claims against the Holder of Assigned Collateral. Should the Collateral or the proceeds from the liquidation of the Collateral, respectively, not be sufficient to cover all payment obligations of the Issuer under the Tracker Certificates, investors may still bring their remaining claims against the Issuer. The Holder of Assigned Collateral is a wholly-owned subsidiary of Clariden Leu Holding Ltd. It is incorporated as a corporation ("Aktiengesellschaft") under Swiss law, having its domicile in Zurich. The board of directors of the Holder of Assigned Collateral will consist of no more than four members, in accordance with the articles of association of the Holder of Assigned Collateral two of which must be fully independent of the Issuer. According to the articles of association of the Holder of Assigned Collateral, the two independent members will be appointed president and vice-president of the board and their consent is required for any and all decisions of the board.Winding-up Event A Winding-up Event has occurred if (i) the Issuer fails to meet its payment or delivery obligations under the Tracker Certificates under the Terms and Conditions within a period of five Business Days after the respective due date; (ii) the Issuer becomes insolvent, declares insolvency, or becomes over indebted as defined in Art. 725 of the Swiss Code of Obligations; (iii) the Issuer has instituted against it a proceeding seeking bankruptcy or certain other proceedings or sanctions based on certain provisions of the Swiss Banking Act; (iv) representations and warranties of the Issuer under the Collateral Agreement turn out to be, or become, inaccurate in a material respect unless the Issuer has taken the appropriate remedies in a timely manner; or (v) the Issuer fails to comply or fails to duly comply with material obligations and duties under the Collateral Agreement. In case of a Winding-up Event, all Tracker Certificates will become due automatically and with immediate effect. The Holder of Assigned Collateral will independently liquidate the Collateral for the account of the investors and independently sell it in the market in order to fulfil the Issuers obligations under the Tracker Certificates. If possible, the Collateral will be sold on the P.M. Fixing of the Underlying on the date on which the Winding-up Event occurs (the "Winding-up Date"). If the Winding-up Event occurs less than one hour before the official P.M. Fixing of the Underlying on that day, the sale will take place on the following official P.M. Fixing of the Underlying. If the quantity of Collateral to be sold is significant compared to the average trading volume in the respective P.M. Fixing of the Underlying, the Holder of Assigned Collateral may, in the interest of the investors, elect to sell the Collateral over several days (generally over no more than 10 Business Days) by breaking up the total quantity of Collateral and selling it in equal parts in the respective P.M. Fixings. After the liquidation, the Holder of Assigned Collateral will make a cash payment to the investors. This procedure, in principle, will not be affected by the effects of a Winding-up Event on the Issuer.Minimum Trading Lot 1 Tracker CertificateSettlement Cash settlement in EUR / physical deliveryListing SIX Swiss Exchange listing will be applied for.Calculation Agent Clariden Leu Ltd., ZurichPaying Agent Clariden Leu Ltd., ZurichPublications www.myproducts.ch, Bloomberg <CLZH>, Reuters <CLARIDENLEU>, SIX Telekurs LtdClearing SIX SIS Ltd, Clearstream Banking, EuroclearSecondary Market Under normal Market conditions, secondary trading will be maintained throughout the term of the product, during which the bid and offer prices may differ (spread).Sales Restrictions USA, U.S. Persons, UK, European Economic AreaGoverning Law / Swiss law; exclusive place of jurisdiction is ZurichJurisdictionTaxes No Swiss withholding tax; no stamp tax at issuance (primary market) and on secondary market transactions. This product is qualified as derivative for Swiss tax purposes and is not subject to income tax upon buying, holding and selling for Swiss resident private investors. The payments made by Swiss paying agents to EU resident individuals with respect to these Tracker Certificates will not be subject to EU withholding tax (TK-Code 14; "out of scope"). The charges for physical delivery in Switzerland are subject to Swiss value added tax. The afore mentioned taxes are valid at the time of launch of the issue and are not exclusive. Any taxation will depend on the investors personal circumstances. The relevant tax laws or the regulations of the tax authorities are subject to change. Clariden Leu Ltd. expressly excludes all liability in respect of any tax implications.Information / Trading Clariden Leu Ltd. Telephone: +41 (0) 844 844 002* Structured Products E-mail: info@myproducts.ch CH-8070 Zurich Internet: www.myproducts.ch * Please note that conversations on this line are recorded. We will assume your consent. The original version of this termsheet is in German, versions in other languages are non-binding translations only. This termsheet does not constitute a prospectus in the sense of Art. 652a resp 1156 of the Swiss Code of Obligations nor a simplified prospectus within the meaning of Art. 5 of the Collective Investment Schemes Act (CISA). This document is for information purposes only and summarizes the Terms and Conditions of the Tracker Certificates.Tracker Certificates on Gold (Troy Ounce) in EUR – Collateralized with physical Gold Page 3 of 4
  4. 4. Risk This investment product is a complex structured financial instrument and involves a high degree of risk. It is intended only for investors who understand and are capable of assuming all risks involved. Before entering into any transaction, investors should determine if this product suits their particular circumstances and should independently assess (with the assistance of any professional advisers) the specific risks (maximum loss, currency risks, etc.) and the legal, regulatory, credit, tax and accounting implications. The Issuer and/or its affiliates make no representation as to the suitability or appropriateness of this investment product for any particular investor or as to the future performance of this investment product. This document does not replace a personal conversation with your relationship manager, which is recommended by Clariden Leu Ltd. before any investment decision. Please note that the information regarding risks below is not exhaustive. Additional information on risks associated with an investment in these Tracker Certificates can be found in the Terms and Conditions. Tracker Certificates are derivative financial instruments and do not constitute collective capital investments within the meaning of the Federal Act on Collective Investment Schemes (CISA). Accordingly, they are not subject to the regulations of the CISA or the supervision of the Swiss Financial Market Supervisory Authority FINMA. Investors do not have the benefit of the specific investor protection provided by the CISA. Investors should note that regardless of the collateralization the Tracker Certificates still represent claims against the Issuer. The issuers obligation to redeem the Tracker Certificates is a direct, unsubordinated, unconditional, but collateralized obligation of the Issuer, and ranks pari passu with all of its other obligations of the equivalent type. The rating of Clariden Leu Ltd. is Aa2 (Moodys). This rating may change over the term of the Tracker Certificates. Clariden Leu Ltd. is subject to the supervision of FINMA. The Holder of Assigned Collateral has no rating and is not subject to the direct supervision of FINMA. The investor should note that not all risks connected to an investment in these Tracker Certificates are covered by the Collateral held by the Holder of Assigned Collateral. The Collateral only protects against risks related to the Issuer, the manifestation of which may constitute a Winding-up Event which will result in the sale of the collateral assigned in the Collateral Agreement. There is a risk that official decrees against the Issuer will impede or prevent the enforcement and/or liquidation of the Collateral. There is no protection against any other risks associated with the Tracker Certificates and the Collateral does not mitigate those other risks. The Issuer reserves the right to trade in gold at any time and for its own account or that of third parties. Sales transactions in gold by the Issuer or any of its affiliates may under certain circumstances adversely affect the Redemption Amount. If a Winding-up Event occurs, the Tracker Certificates will become due automatically and the Redemption Amount will be calculated on the basis of the price of gold as of the Winding-up Date. There is a risk that the Redemption Amount will be higher than the pro-rata claim of an investor to the proceeds of the liquidation of the Collateral. The claims of the investors to the proceeds of the liquidation of the Collateral are limited on a proportional basis to their holding in the Tracker Certificates. Should the proceeds of the liquidation of the Collateral not suffice to fully satisfy all claims of the investors under the Tracker Certificates, their claims will be satisfied on a pro-rata basis for each Tracker Certificate. There is a risk that the proceeds from the liquidation of the Collateral will be lower than the Redemption Amount, in particular if the value of the Collateral (i.e. the price of gold) decreases between the Winding-up Date and the date on which the Collateral is liquidated. The liquidation of the Collateral may have an adverse impact on the price of gold. Even in case the Collateral and the proceeds from the liquidation of the Collateral, respectively, are not sufficient to cover the payment obligations of the Issuer, investors will be barred from bringing their remaining claims against the Holder of Assigned Collateral. However, investors may still bring such claims against the Issuer. For this limited amount investors are theoretically exposed to a counterparty risk. The liquidation of the Collateral and the payment of the proceeds may be delayed for practical reasons or on legal grounds. Measures have been taken to eliminate the occurrence of an event of bankruptcy or incapability of action on the part of the Holder of Assigned Collateral. The investor may be exposed to a currency risk, if the product is denominated in another currency than that of the country in which the investor is resident. Currency fluctuations may therefore have an impact on the value of the investment. Investments in commodities and derivatives or indices thereof are subject to particular risks and high volatility. The performance of such investments is dependent on unpredictable factors such as natural catastrophes, climate influences, hauling capacities, political unrest, seasonal fluctuations and strong influences of rolling-forward particularly in futures and indices. Before entering into any transaction, an investor should carefully assess the terms of the investment, its risk profile and its Underlying and consult his bank or investment adviser. The Tracker Certificates are not capital-protected. This investment bears the market risk of a direct investment in the Underlying, which may lead to a severe or even complete loss of the investment made. The Tracker Certificates do not entitle to any claim to interest payments and do not provide any current income. In connection with the product, the Issuer and/or its affiliates may pay to or receive from third parties one- time or recurring payments (e.g. placement or holding fees). Please contact Clariden Leu Ltd. for further information.Details This document constitutes Marketing Material and is not the result of a financial analysis or research and therefore not subject to the Swiss Bankers Associations "Directives on the Independence of Financial Research". This document has been produced by Clariden Leu Ltd., Zurich, solely for information purposes and does not constitute an offer or a solicitation of an offer to purchase or to sell any securities. The information contained in this document has been compiled as the date of creation of this document and is subject to change. The legally binding terms may be obtained directly from Clariden Leu Ltd.Listing Prospectus / The listing prospectus and the binding Terms and Conditions may be obtained free of charge from Clariden Leu AG, XLAP 1, 8070 ZurichTerms of Certificate (tel. +41 58 205 76 08; fax +41 58 205 71 42).Information / Trading Clariden Leu Ltd. Telephone: +41 (0) 844 844 002* Structured Products E-mail: info@myproducts.ch CH-8070 Zurich Internet: www.myproducts.ch * Please note that conversations on this line are recorded. We will assume your consent. The original version of this termsheet is in German, versions in other languages are non-binding translations only. This termsheet does not constitute a prospectus in the sense of Art. 652a resp 1156 of the Swiss Code of Obligations nor a simplified prospectus within the meaning of Art. 5 of the Collective Investment Schemes Act (CISA). This document is for information purposes only and summarizes the Terms and Conditions of the Tracker Certificates.Tracker Certificates on Gold (Troy Ounce) in EUR – Collateralized with physical Gold Page 4 of 4

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