BNP Paribas Step-Over Bonds, Series 1 launch
ONE Financial introduces unique "step-over" bond product to Canadian market
Equity-linked bonds guarantee principal, pay up to 10% annual income and have a built in hedge to stock market performance
Toronto, Ontario - February 9, 2004
ONE Financial enters RSP season with an exciting new principal guaranteed investment designed to provide investors with an alternative to both traditional GICs and non-guaranteed high income seeking investments. The company announced today the launch of its BNP Paribas Step-Over™ Bonds (Series 1) (the "Bonds"), representing another new addition to its growing suite of innovative principal guaranteed, equity-linked products. This unique investment vehicle provides the potential for an attractive semi-annual income stream and the ability to lock in stock market gains every six months. It is one of the first equity-linked bank deposit products in Canada designed to provide investors with a regular income stream. The Bonds, which mature in 2011, provide a variable semi-annual coupon payment of up to 5% every six months (up to 10% annual income). Coupon payments are linked to the level of an index (the "Index") consisting of equally weighted shares of 50 of the world's largest and most successful multinational companies initially selected from the Dow Jones Global Titans 50 Index. "ONE Financial is excited to kick off RSP season with another unique product for investors looking for a secure way to pursue an annual income of up to 10%," said Jeffrey O'Brien, ONE Financial's Chief Executive Officer. "ONE Financial's new Bonds are a smart option for fixed income investors seeking higher returns than they could normally get from principal-protected investments. The Bonds should also be appealing to equity investors who want principal protection and the ability to lock in global market gains every six months.
Principal protection, high income potential
The Bonds, which mature December 30th, 2011, are available through financial advisors until March 15th for a minimum investment of only $2,000. They are issued by BNP Paribas S.A. (Canada) and 100% principal guaranteed at maturity by its parent company BNP Paribas, one of the world's largest banks. With assets of around CDN $1.1 trillion, BNP Paribas is approximately the size of Canada's four largest banks combined. BNP Paribas is rated "AA" by Fitch, "AA-" by Standard & Poor's and "Aa2" by Moody's. The Bonds are equipped with a simple mechanism for determining the semi-annual interest rate payable to investors: if the Index level (starting initially at 100, and adjusted thereafter for the average return, capped at 5%, of each of the shares in the Index) is over 100 on any semi-annual coupon valuation date, investors will receive a coupon. The percentage amount of such coupon will be equal to the Index Level minus 100. If each of the shares in the Index have "stepped over" an index level of 105 on any semi-annual coupon valuation date, investors will receive a 5% coupon payment (up to 10% annual income). Because the performance of the Index shares is calculated from the initial investment date (and not over each 6-month period), a 5% coupon may be paid even after a 6-month period of negative performance of the Index shares.
The phrase "Step-Over" is a trademark owned by ONE Financial Corporation ("ONE Financial"), and the BNP logo is a trademark owned by BNP Paribas S.A. ("BNP"). "Dow Jones" and "Dow Jones Global Titans 50 Index" are service marks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by BNP. The Bonds are not sponsored, endorsed, sold or promoted by Dow Jones, and Dow Jones, ONE Financial, and BNP make no representation or warranty, express or implied, to the owners of the Bonds or any member of the public regarding the advisability of investing in securities generally or in the Bonds particularly.