Overseas Structured Notes | DBS TW Corporate Banking

Overseas Structured Notes

Customized for client needs to grasp investment opportunities in various markets

Overseas Structured Notes

Customized for client needs to grasp investment opportunities in various markets

Main features

Offshore structured notes (SN) refer to bonds issued outside the jurisdiction of R.O.C., which are hybrid products using fixed income products combined and linked with the financial derivatives of equity, interest rate, exchange rate, index, commodities, credit incidents and other benefits etc. Product conditions of linked targets and terms can be customized. Product return is linked to various financial instruments, or a basket of financial products. If the linked target asset's performance is consistent with the client's view, the client may have the opportunity to enjoy the potential return from the linked target's performance. The degree of principal guarantee can be designed according to client needs and product structure. For example: 100% of principal guaranteed at maturity (in the investing currency), partial or non-principal guaranteed.

An overseas structured note’s return rate may be affected by the changes in the linked target assets. Meanwhile, investors' final return rate will be different due to the design structure of different options. It features customization for investors. Overseas structured bonds normally are issued by financial institutions, so they have relevant credit risks, as well as higher investment risks. They are suitable for investors with professional knowledge of financial products or those with investing experience and higher risk tolerance.

DBS Taiwan offers various structures and can customize products with different degrees of principal guarantee according to the investors’ risk preferences.

The rate of return can be customized to meet the individual needs of investors.

Diversified target portfolio to grasp opportunities in different markets.

The product duration is flexible so that investment duration can be set up according to investors’ funding needs.

Find out more

To inquire about more product-related information, please visit the Bank’s branches or call our client service center at 02-6612 9889.

Risk disclosure

	Minimum Return Risk
	The minimum return risk shall include the maximum loss amount, which means the investor might lose the entire principal and interest in the worst case.

	Early Redemption Risk
	If an investor redeems the structured notes earlier than maturity, the investor might get back less amount than the original investment amount (the amount could even be zero in the worst case) or not be able to redeem.

Interest Risk

After a structured note is officially issued and delivered, its mark to market value during the product duration will be affected by the changes of interest rate in the denominated currency; when the interest rate of the currency goes up, the mark to the market price of the overseas structured notes may fall, and may be lower than the coupon price, which would damage the original investment amount; when the currency interest rate goes down, the mark to market price of the overseas structured notes may increase and may be higher than the coupon price and bring additional revenue.

Liquidity Risk

The secondary market of the overseas structured notes does not have sufficient market liquidity, so transactions can not be guaranteed for investors’ early redemption orders. In the case of lack of liquidity or insufficient trading volume, the actual deal price of overseas structured notes may have a significant spread from its own value of unit, which will result in the investors’ early redemption of the products prior to maturity may damage the trust's original investment amount. Even worse, once the market completely loses liquidity, investors must hold the product to maturity.

Credit Risk

The investors shall bear the credit risk of the issuer or guarantor of the structured overseas note. The evaluation of “credit risk” depends on the investors’ evaluation of the credit rating value of the issuer or guarantor of the structured overseas note; if there is a guaranteed dividend income or guaranteed principal protection rate during the holding period of the structured overseas note, it is guaranteed by the issuer or guarantor, rather than by the trustee.

	Foreign Exchange Risk
	Overseas structured notes may be denominated in foreign currencies. If the investor invests in TWD or other non-denominated currencies at the beginning of the investment, he/she shall note that when the interest and original investment amount in foreign currency are returned, there exists a foreign exchange risk that converting them to TWD asset might result in damaging the investment principal.

	Incident Risk
	Suppose a material incident occurs in the issuer or guarantor. In that case, it may result in the issuer or guarantor and the overseas structured notes rating downgrades, default or the price of overseas structured notes falling.

	Country Risk
	If force majeure events such as wars and others occur in the country where the issuer or guarantor of the structured overseas note is registered, it will cause losses to investors.

	Settlement Risk
	In case of special emergencies or market, changes occur in the country where the issuer or guarantor of the structured notes is registered, it may cause temporary delivery failure or delivery delay.

The risks disclosed above merely represent a summary and are not exhaustive of all the trading risks and factors affecting market conditions. Individual products may also involve risks such as early redemption by the issuer, reinvestment risk, risks related to change the linked target, inflation risk, principal conversion risk, and lock-up period risk. Investors shall consider carefully before investing.

Cautions for investment

The transaction of overseas structured notes is carried out by DBS Bank Taiwan (hereinafter referred to as the Bank) in accordance with the investor's (settlor's) operation instructions, and the Bank, in the name of the trustee, conducts the investment transaction on behalf of the settlor with the counterparty. The Bank does not share any investment risks, nor does it guarantee any return. Investors shall bear all risks of this product.
This type of product is a complex financial product and must be explained by dedicated personnel before investing. If investors can not fully understand the product, please do not invest.
This type of product is an investment rather than a deposit, and is not protected by deposit insurance. The risks it involves are different from bank deposits. Investors shall not deem overseas structured notes as the replacement of general current, savings or time deposits.
Before investing, investors shall carefully read the product prospectus and notice to investors to fully understand the product nature, content, risks and relevant finance, accounting, taxation or legal matters, as well as consider their own financial status and risk tolerance, and then decide whether or not to invest.
The Bank reminds investors that the overseas structured notes shall not account for the vast majority of their investment portfolios.