Tel Aviv-headquartered First International is marketing two capital-protected knockout products five years after it marketed its last autocall structure in the retail market.
The Structured Product linked to the China and Brazil indices 31 months (233061800) - USD is an 18-month structured deposit linked to the performance of the iShares MSCI Brazil Index and the iShares FTSE China 25 Index. This US dollar-denominated structure will pay 101.2% if the product knocks out on the first knockout date, and 102.5% if the final underlying level is above 135% of its initial level. Otherwise, the product will pay a participation of 45% in the rise of the underlying basket.
The Structured Product linked to the China and Brazil indices 31 months (243061803) - ILS is also a structured deposit, although it is an Israeli shekel-denominated product. The product will knock out after 18 months and pay out 102.7% of initial capital if both indices in the underlying basket have risen by 35% or more compared to their strike levels. If the final levels of both indices have risen by 35% or more compared to their respective initial levels, the product will pay 105% capital return. If the final levels of both underlyings are above their initial levels by no more than 35%, the product offers 100% capital return plus 100% participation in the rise of the basket. In all other cases, the product will return the initial investment.
Both products, which also feature a sharkfin payoff profile, will strike on 18 June.
Prior to these two products, the knockout payoff type had been absent in the Israeli market since 2005. According to SRP data, a total of seven knockout products have been recorded in the Israeli market.
First International Bank has issued only one product in the past while Bank Hapoalim issued three products between 2007 and 2008, and Bank Leumi issued one product in 2004.