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Wolf Theiss Advises Raiffeisen Centrobank on Reinvesting Certificates Introduction

Wolf Theiss Advises Raiffeisen Centrobank on Reinvesting Certificates Introduction

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Wolf Theiss has advised Raiffeisen Centrobank Ag on introducing reinvesting certificates — an updated base prospectus for Raiffeisen Centrobank’s Structured Securities Program published on May 11, 2018.

According to Wolf Theiss, the program foresees an innovative new category of certificates, i.e., reinvesting certificates. "These securities are designed to enable investors to follow specific investment strategies," the firm reports. "For example, a Capped Bonus Certificate aims at enabling investors to generate a fixed but limited profit in upward, sideway, and partially in downward trending markets for the relevant underlying, with the risk of a total loss of the investment. Another strategy is a Winner Guarantee Certificate that provides a full capital protection without any profits in downward or sideway trending markets for the relevant underlying."

According to Wolf Theiss, "most investment strategies are linked to the performance of the underlying during a specific and limited time period; hence, any security reflecting such a strategy is usually issued with a fixed term. Therefore, investors with the intention to pursue such a strategy over an extended or even indefinite time period need to actively reinvest the proceeds of a security at the end of its term."

Thus, the firm claims, "in order to provide investors with a possibility to invest in a specific, time-limited investment strategy, without the need to continuously and actively reinvest the proceeds (upon maturity as is the case for securities which are not reinvesting), securities, issued with a fixed term, can be issued as 'reinvesting' securities under Raiffeisen Centrobank Structured Securities Program with a prolonged or even unspecified term/open-end."

The Wolf Theiss team was led by Partner Alex Haas.