Market Linked Account (Series 2010-02)
Overview
The MLA 2010 - 02 is a 6 month structured deposit that has been designed to provide Investors with the potential to earn a higher than market Interest Rate of 10% p.a. linked to the performance of the AUD / USD Exchange Rate, whilst providing Capital Protection at Maturity.
Indicative Terms
- Maturity: 27 September 2010 (6 Months)
- Currency: AUD
- 100% Capital Protection at Maturity *
- Type: Deposit
| Term | Description | More Information |
|---|---|---|
| Citi, we, or us | Citigroup Pty Limited | See Section 5 |
| Offer Closes | 19 March 2010 at 5:00 pm (Sydney time) | n/a |
| Issue Date | 25 March 2010 | n/a |
| Maturity Date | 27 September 2010. However, Citi may close the MLA early in its discretion. | n/a |
| Deposit Currency | Australian Dollars (AUD) | n/a |
| Investment | The MLA is a structured deposit with Citi, governed by the Terms. | See Section 1 |
| Deposit Series | The Investor can choose to invest in one of the following two Deposit Series listed below. This choice determines the way in which Interest is calculated on your deposit.
Series A: Exchange Rate Appreciation Under the Exchange Rate Appreciation strategy, the Investor earns Interest only if the Exchange Rate appreciates so that the Final Level is more than the Exchange Rate Appreciation Benchmark Level. An appreciation is where the AUD / USD exchange rate increases, for example from 0.90 to 0.91. Series B: Exchange Rate Depreciation Under the Exchange Rate Depreciation strategy, the Investor earns Interest only if the Exchange Rate depreciates so that the Final Level is less than the Exchange Rate Depreciation Benchmark Level. A depreciation is where the AUD / USD exchange rate decreases, for example from 0.90 to 0.89. |
See pages 4 and 5 |
| Reference Asset | The AUD / USD exchange rate. This is expressed as the amount of USD per one Australian Dollar. | n/a |
| Exchange Rate | For a day, the AUD / USD exchange rate as observed by Citi at 3.00pm (Tokyo time) on that day and as quoted on Reuters as <FXBTFIX01>. | See Section 1 |
| Minimum Deposit Amount | AUD 25,000 and multiples of AUD 1,000 thereafter. | n/a |
| Deposit Amount | The actual amount paid by the Investor to Citi by the time the Offer Closes. | n/a |
| Capital Protection | The Investor will be entitled to receive no less than the Deposit Amount on the Maturity Date or on any date on which the Investor’s MLA is closed prior to the Maturity Date.* However, a Withdrawal Fee may be imposed on an Early Withdrawal at the request of the Investor.
The MLA is not insured by the Australian Government or any governmental agency. The MLA has not been designed to obtain the benefit of any Australian Government Guarantee. Due to the possibility of a Withdrawal Fee being deducted, investors may receive less than the Deposit Amount if the MLA is not held to Maturity. |
See Section 1 and “Early Withdrawal” below |
| Final Level | The Exchange Rate on the Maturity Date. | n/a |
| Initial Level | The Exchange Rate on the Issue Date. To ensure the viability of the MLA, Citi may elect not to proceed with: MLAs that invest in the Exchange Rate Appreciation strategy if the Exchange Rate rises above 0.94 for any day up to and including the day before the Issue Date; and/or. MLAs that invest in the Exchange Rate Depreciation strategy if the Exchange Rate falls below 0.84 for any day up to and including the day before the Issue Date. If Citi decides to not proceed with the MLA you choose, then your Deposit Amount will be credited to your nominated Settlement Account. Citi will notify you in writing if the MLA does not proceed. |
n/a |
| Benchmark Level | Separately determined on the Issue Date for each Deposit Series.
Series A: Exchange Rate Appreciation The Exchange Rate Appreciation Benchmark Level will be set between 104% - 106%of the Initial Level. For example if the Initial Level is 0.90, the Exchange Rate Appreciation Benchmark Level set by Citi could be 106% x 0.90 (i.e. 0.954). The main factors affecting the determination of the Exchange Rate Appreciation Benchmark Level percentage are explained in Section 1 of this PDS. Series B: Exchange Rate Depreciation The Exchange Rate Depreciation Benchmark Level will be set between 94% - 96% of the Initial Level. For example if the Initial Level is 0.90, the Exchange Rate Depreciation Benchmark Level set by Citi could be 94% x 0.90 (i.e. 0.846). The main factors affecting the determination of the Exchange Rate Depreciation Benchmark Level percentage are explained in Section 1 of this PDS. |
See Section 1 |
| Interest Rate | The Interest Rate for each Deposit Series is determined separately.
The Interest Rate is determined by Citi by reference to the performance of the Exchange Rate during the Interest Period. No Interest will be payable if the MLA is withdrawn or is closed before the Maturity Date. Series A: Exchange Rate Appreciation If the Final Level of the Exchange Rate is above the Exchange Rate Appreciation Benchmark Level, then the Interest Rate will be: 10.00% x 6 / 12 (ie 10% on an annualised basis) If the Final Level of the Exchange Rate is at or below the Exchange Rate Appreciation Benchmark Level, then the Interest Rate will be: 0.00% x 6 / 12 (ie 0%) This means that an Investor will receive Interest only if the Final Level is above the Exchange Rate Appreciation Benchmark Level set by Citi. If the Final Level is equal to or below the Exchange Rate Appreciation Benchmark Level, then no Interest is payable on an MLA that invests in the Exchange Rate Appreciation strategy. Series B: Exchange Rate Depreciation If the Final Level of the Exchange Rate is below the Exchange Rate Depreciation Benchmark Level, then the Interest Rate will be: 10.00% x 6 / 12 (ie 10% on an annualised basis) If the Final Level of the Exchange Rate is at or above the Exchange Rate Depreciation Benchmark Level, then the Interest Rate will be: 0.00% x 6 / 12 (ie 0%) This means that an Investor will receive Interest only if the Final Level is below the Exchange Rate Depreciation Benchmark Level set by Citi. If the Final Level is equal to or above the Exchange Rate Depreciation Benchmark Level, then no Interest is payable on an MLA that invests in the Exchange Rate Depreciation strategy. |
n/a |
| Interest Payment Date | Within 10 Business Days after the Maturity Date. | n/a |
| Interest Period | The period of 6 calendar months starting on the Issue Date and ending on the Maturity Date. | n/a |
| Interest | The amount of any Interest will be calculated by Citi. This is the Deposit Amount multiplied by the Interest Rate. | See Section 8 |
| Risks | Risks of investing in the MLA include (but are not limited to): Nil Interest Rate, Early Closure risk, Early Withdrawal risk, Tax and change of law risk, Credit risk, No Government Guarantee, Market risks, and Exchange Rate outperformance risk. | See Sections 1 and 2 |
| Early Closure | Citi may close an MLA at any time before the Maturity Date, even if the Exchange Rate at that time is above the Benchmark Level (for the Exchange Rate Appreciation strategy) or below the Benchmark Level (for the Exchange Rate Depreciation strategy). If that happens, no Interest will be paid on the MLA, regardless of the Exchange Rate at that time, and Citi will transfer to your Settlement Account an amount equal to the Deposit Amount. Examples of where Early Closure may occur include (but are not limited to):
|
See Section 3, and clauses 10, 22, and 24 of the Terms in Section 8 |
| Early Withdrawal | If an Investor requests an Early Withdrawal, Citi may impose a Withdrawal Fee on that Early Withdrawal. In addition, no Interest will be paid on the the MLA, regardless of the Exchange Rate at that time. | See Sections 3 and 4, and clause 22 of the Terms in Section 8 |
| Fees | Distributor Fee – An upfront fee payable by Citi to distributors of up to 0.50% (including GST, if applicable) of the Deposit Amount.
This fee will be paid by Citi at no additional cost to Investors. If an Investor requests closure of the MLA before the Maturity Date, Citi is under no obligation to agree to that Early Withdrawal. If Citi does agree, Citi may impose a Withdrawal Fee on that Early Withdrawal. Any Withdrawal Fee imposed by Citi on an Early Withdrawal will not exceed 10% of the Deposit Amount. |
See Section 4 |
Investment Profile
Time Horizon – In years
| 1 or less |
1-3 |
3-4 |
4-5 |
5 or more |
Open- |
ended | |
Risk
| Very Low |
Low * |
Moderate |
High |
Very High |
Speculative |
| |
Investment Objective
| Full Capital Protection |
Partial Capital Protection |
Conditional Capital Protection |
No Capital Protection |
Potential for Income ^ |
Growth |
| |
^ Potential for income in the form of Interest, but this is not guaranteed and the Investor may receive zero income
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More Information
For further information on structured financial products contact the Citigroup Structured Products Service Centre.| Phone | : | 1300 30 70 70. | |
| : | citifirst.au@citi.com | ||
| : | GPO Box 40, Sydney NSW 1027 | ||
Disclaimer
The Financial Products referred to in this document are issued by Citigroup Pty Limited ABN 88 004 325 080, AFSL No 238098. This information does not take into account the investment objectives or financial situation of any particular person. Investors should be aware that there are risks of investing and that prices both rise and fall. Investors should seek their own independent financial advice based on their own circumstances before making a decision.
The terms set forth herein are intended for discussion purposes only and subject to the final expression of the terms of a transaction as set forth in a definitive agreement and/or confirmation. Although the information contained herein is based upon generally available information and has been obtained from sources believed to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Any prices used herein are historic and may not be available when any order is entered. All opinions and estimates included in this document constitute our judgment as of this date and are subject to change without notice. This material does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Before entering into a derivative transaction, you should ensure that you fully understand the terms of the transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction.
The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor or agent. Therefore prior to entering into the proposed transaction you should determine, without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and independently determine that you are able to assume these risks. In this regard, by acceptance of these materials, you acknowledge that you have been advised that (a) we are not in the business of providing legal, tax or accounting advice, (b) you understand that there may be legal, tax or accounting risks associated with the transaction, (c) you should receive legal tax and accounting advice from advisors with appropriate expertise to assess relevant risks, and (d) you should apprise senior management in your organization as to the legal, tax and accounting advice (and, if acceptable, risks) associated with this transaction and our disclaimers as to these maters. If you are acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. If you believe you need assistance in evaluating and understanding the terms or risks of a particular derivative transaction, you should consult appropriate advisers before entering into the transaction.
We and/or our affiliates may from time to time take proprietary positions and/or make a market in instruments identical or economically related to derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from the issuer(s) of financial products underlying derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or termination of a derivative transaction with you, that may adversely affect the market price, rate, index or other market factors(s) underlying a derivative transaction entered into with you and consequently the value of the transaction. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding.
Past performance is not a guarantee or indication of future results. Any prices provided (other than those that are identified as being historical) are indicative only and do not represent firm quotes as to either price or size. You should contact your local representative directly if you are interested in buying or selling any financial instrument or other product or pursuing any trading strategy that may be mentioned.
Although Citigroup Pty Limited is an affiliate of Citi, you should be aware that none of the financial instruments or other products mentioned (unless expressly stated otherwise) are (i) insured by the Federal Deposit Insurance Corporation or any other governmental authority. This product is not available to U.S. citizens.
Copyright © Citigroup Pty Limited 2010. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citi Inc. or its affiliates and are used and registered throughout the world. Any unauthorized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution."
The Financial Products referred to in this document are issued by Citigroup Pty Limited ABN 88 004 325 080, AFSL No 238098. This information does not take into account the investment objectives or financial situation of any particular person. Investors should be aware that there are risks of investing and that prices both rise and fall. Investors should seek their own independent financial advice based on their own circumstances before making a decision.
The terms set forth herein are intended for discussion purposes only and subject to the final expression of the terms of a transaction as set forth in a definitive agreement and/or confirmation. Although the information contained herein is based upon generally available information and has been obtained from sources believed to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. Any prices used herein are historic and may not be available when any order is entered. All opinions and estimates included in this document constitute our judgment as of this date and are subject to change without notice. This material does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Before entering into a derivative transaction, you should ensure that you fully understand the terms of the transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction.
The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor or agent. Therefore prior to entering into the proposed transaction you should determine, without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and independently determine that you are able to assume these risks. In this regard, by acceptance of these materials, you acknowledge that you have been advised that (a) we are not in the business of providing legal, tax or accounting advice, (b) you understand that there may be legal, tax or accounting risks associated with the transaction, (c) you should receive legal tax and accounting advice from advisors with appropriate expertise to assess relevant risks, and (d) you should apprise senior management in your organization as to the legal, tax and accounting advice (and, if acceptable, risks) associated with this transaction and our disclaimers as to these maters. If you are acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. If you believe you need assistance in evaluating and understanding the terms or risks of a particular derivative transaction, you should consult appropriate advisers before entering into the transaction.
We and/or our affiliates may from time to time take proprietary positions and/or make a market in instruments identical or economically related to derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from the issuer(s) of financial products underlying derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or termination of a derivative transaction with you, that may adversely affect the market price, rate, index or other market factors(s) underlying a derivative transaction entered into with you and consequently the value of the transaction. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding.
Past performance is not a guarantee or indication of future results. Any prices provided (other than those that are identified as being historical) are indicative only and do not represent firm quotes as to either price or size. You should contact your local representative directly if you are interested in buying or selling any financial instrument or other product or pursuing any trading strategy that may be mentioned.
Although Citigroup Pty Limited is an affiliate of Citi, you should be aware that none of the financial instruments or other products mentioned (unless expressly stated otherwise) are (i) insured by the Federal Deposit Insurance Corporation or any other governmental authority. This product is not available to U.S. citizens.
Copyright © Citigroup Pty Limited 2010. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citi Inc. or its affiliates and are used and registered throughout the world. Any unauthorized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution."