Principal Protected Notes
CASH+ Breakfast Notes, Series 3
|Inception Date||June 13, 2008|
|Maturity Date||June 30, 2016|
|Market Price Per Note||$......|
|Investment Exposure as at June 30, 2009||0%|
ONE Financial CASH+ Breakfast Notes™, Series 3 provide participation in the soft commodity marketplace, with the added security of 100% principal protection. The Notes, Series 3 are dynamically linked to the performance of two major soft commodity indices; the S&P GSCI Agricultural Excess Return Index®, and the S&P GSCI Livestock Excess Return Index®.
- Uncapped upside of diversified basket of soft commodities
- Quarterly return of capital distributions linked to Canadian overnight rate (3.01% annually as at March 31, 2008)¹
- The complete security of 100% principal protection
- Enhanced growth and distribution potential (up to 2X exposure)
- Diversification from traditional asset classes, with significant growth drivers
|Style||Index-Linked / Variable Income / Principal-Guaranteed|
|Principal Guarantee||100% of initial principal³|
|Underlying Investment||S&P GSCI™ Commodities Indices
- Agricultural and Livestock
|Guarantor||BNP Paribas S.A. (Rated AA by S&P)|
|Distributions||Quarterly return of capital
distributions linked to
Canadian overnight rate
|Leverage return potential||Yes, up to 200% "performance-based" investment exposure|
|Performance||as at June 30, 2009|
|Returns||as at June 30, 2009|
|Total Return since Inception||-29.32%|
|Total Distribution to-date||$0.0366|
|Underlying Investments||as at June 30, 2009|
|Goldman Sachs Agriculture Excess Return Index||80%|
|Goldman Sachs Livestock Excess Return Index||20%|
The ONE Financial CASH+ Breakfast Notes, Series 3 (the "Notes") are linked to a portfolio of two major soft commodity indices, namely the Goldman Sachs Agricultural Excess Return Index and the Goldman Sachs Live Stock Excess Return Index (the "Portfolio"). The drivers for the growth of soft commodities are 1) indices are near 20 year lows indicating a cyclical buying opportunity, 2) developing countries are creating a supply demand imbalance 3) a loss of land to urban development 4) commodities are a natural hedge against inflation and unforeseen macroeconomic disruptions, and 5) continuing development of biomass fuels. The Goldman Sachs Agricultural Excess Return Index has decreased by 41.8% since the inception of the Notes while the Goldman Sachs Live Stock Excess Return Index is down 31.5% over the same period.
The price of the Notes will not track the performance of a static portfolio invested since inceptions of the Notes according to the Portfolio's targeted allocation, and is affected by many inter-related factors including:
- the Portfolio's "dynamic Asset Allocation" feature,
- the performance of each of the indices in the Portfolio,
- changes in the levels of interest rates,
- time remaining until the Notes' Maturity Date, and
- market demand for the Notes.
The difference between the performance of the Notes and the performance of a static portfolio invested according to the Portfolio's targeted allocation can largely be attributed to the Portfolio's "Dynamic Asset Allocation" feature. This feature is designed to both protect the Portfolio's net asset value (or "NAV") on the downside, and pursuer potentially leverage returns on the upside.
Exposure to the indices is adjusted regularly and systematically according to a non-discretionary re-weighting procedure. Generally, as the value of the Portfolio increases, the Portfolio will potentially leverage its investments according to the targeted allocation up to a maximum of 200 of its NAV in order to pursuer enhanced returns, and as the value of the Portfolio decreases, it potentially (i) de-leverages its investments in order to protect its NAV, and (ii) if the exposure is less than 100%, reallocates it investments from the indexes to a greater weighting in a BNP notional bond. Although the Portfolio will not directly track the performance of an investment in the underlying indices according to a static allocation during the term of the Notes, if the Portfolio is expected to provide solid, consistent performance throughout the term, then investors should benefit from the strong potential for leveraged returns at Maturity.
This Note is not available for purchase at this time.
BNP Paribas was established in 1848, and according to rankings published in July 2005 by The Bank, is the sixth largest banking group in the world and the largest in Europe based on total assets of approximately CAD $1.7 trillion (approximately the size of the Canada's five largest banks combined). As one of the world's leading diversified financial institutions BNP Paribas is present in over 85 countries, and has approximately 100,000 employees worldwide.
The BNP Paribas Group is organized around three core businesses: Retail Banking, Corporate & Investment Banking and Private Banking & Asset Management. Through its 2,200 branches across France and worldwide, BNP has more than twenty million individual and small business customers and 50,000 corporate customers.
BNP Paribas' long term debt ratings are: AA with a stable outlook from Standard & Poor's, Aa2 with a stable outlook from Moody's, and AA with a stable outlook from Fitch.
- Investor Summary
- Bloomberg: Corn, Sugar Lure Goldman, Faber; Subprime Dents Metal
- MarketNotes: "How Corn Became an Energy Play"
- MarketNotes: "Investments to dine for - Soft Commodities"
- Investment Flow of Assets