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INDICATIVE TERM SHEET

1-YEAR FR MATERIALS SECTOR LINKED


INDEXED PRINCIPAL PROTECTED NOTE

MARCH 20, 2018


STRICTLY PRIVATE & CONFIDENTIAL
DISCLAIMER
This document has been prepared by Sagicor Investments Jamaica Limited (“Sagicor”) for discussion
and/or information purposes only. This document is an indicative summary of the terms and conditions of
the transaction described herein. It may be amended, superseded or replaced by subsequent summaries
and should not be relied on as the indicative indicator of the terms and likely performance of the Security.
Should a transaction ultimately be entered into between an investor and the Issuer, the final terms and
conditions of the transaction will be set out in full in a binding transaction document and reference should
be made only to such document and not this indicative term sheet for definitive information.

This document shall not constitute an underwriting commitment, an offer to sell, or a solicitation of an
offer to buy any securities, commodities or other instruments, or a recommendation to enter into any
transaction by any Sagicor entity. Nor is it an official or unofficial confirmation of terms. Although the
indicative information set forth herein is reflective of terms, as of the date of this communication, under
which we believe an issuance of securities or other transactions might be structured, no assurance can be
given that such an issuance or transaction could in fact be executed, nor is any entity obligated to issue
such securities or obligations or enter into any transaction. To the extent that you subsequently enter into
a transaction with Sagicor and / or any of its affiliates this would be on the basis that you were transacting
with us as principal (and not as agent or in any other capacity, fiduciary or otherwise) and no other person
would have an interest herein.

All information, terms and pricing set forth herein is indicative and subject to change prior to issuing the
note. Any opinions expressed herein reflect our judgment at the date and time hereof and are subject to
change prior to issuing the note. Prior to issuance of the note, any changes in the terms of this document
will be communicated to subscribers before confirming their participating in the new terms. The
information contained in this document has been internally developed or taken from trade and statistical
services and other sources which we deem reliable, but no warranty is made that such information is
accurate or complete and it should not be relied upon as such.

Transactions of the type described herein may involve a high degree of risk, and the value of such
instruments may be highly volatile. Such risks may include without limitation risk of adverse or
unanticipated market developments, risk of issuer default and risk of illiquidity. In certain transactions
Investors may lose their entire investment or incur an unlimited loss. This brief statement does not
disclose all the risks and other significant aspects in connection with transactions of the type described
herein, and Investors should ensure that they fully understand the terms of the transaction, including the
relevant risk factors and any legal, tax, regulatory and accounting considerations applicable to them, prior
to transacting. No representation is made concerning the legal, tax, regulatory or accounting implications
in any applicable jurisdiction and we are not advising you in respect of such matters. Accordingly you must
independently determine, with your own advisors, the appropriateness for you of the transaction before
transacting.

This document is confidential, and no part of it may be reproduced, distributed or transmitted without the
prior written permission of Sagicor Investments Jamaica Limited.

SELLING RESTRICTIONS AND SPECIAL CONSIDERATIONS


Potential investors are urged to consult with their legal, regulatory, investment, accounting, tax and other
advisors with regard to any proposed or actual investment in these Securities. The Financial Services
Commission (“FSC”) has not approved the Security nor has the FSC given any warranty as to the accuracy
or adequacy of this Term Sheet or any other documents related to the Security.

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SELLING RESTRICTIONS AND SPECIAL CONSIDERATIONS CONTD
The Securities described herein have not been registered under the Securities Act, 1993 and have been
issued pursuant to Section 3.1 and Section 3.2 (Accredited Investor and Minimum Subscription Amount) of
the Financial Services Commission Guidelines for Exempt Distributions (Guidelines SR-GUID-08/05-0016).
The holder of a Security issued and purchased pursuant to an Exempt Distribution may not trade the
Security except to another person qualified to purchase the Security or pursuant to an exemption by the
Financial Services Commission pursuant to Section 6.1 of the Financial Services Commission Guidelines for
Exempt Distributions.

The information contained in this Term Sheet is not intended to be, and shall not constitute, an offer to sell
securities to the public nor the solicitation of any offer by the public to buy any security. The
information presented is provided for informational purposes only and is not to be treated as advice to
make any specific investment. The issuer may withdraw this Indicative Term Sheet and decline to issue the
Note in the event that the Minimum Issue Size is not achieved on the Issue Date or for any other reason
whatsoever. Please consult with an independent investment advisor before making an investment
decision.

RISK CONSIDERATIONS
Investing in the Security entails certain risks including, but not limited to, the following:

100% Principal Protection only at Maturity: The Security is 100% principal protected only if held to maturity.
If an investor wishes to sell or trade the Security prior to the Maturity Date, the investor may lose part of or
the entire amount invested.

Credit Risk: The Security constitutes unsecured debt obligations of the Issuer. As such, all payments to the
investor (principal, interest or otherwise) are the responsibility of the Issuer and the likelihood that such
payments are received by the investor will be dependent on the financial health and
creditworthiness of the Issuer. All equity returns will be hedged using options purchased on the
international markets. Therefore, investors’ will assume the risk of any default thereof relating to
payment of equity returns.

Liquidity Risk: There is currently no established trading market for the Security and the Issuer does not
intend to apply for the Security to be listed on any organized exchange in Jamaica or any other
jurisdiction.

No Shareholder Rights: A holder of the Security will have no beneficial interest in either Reference Index
nor any voting rights and will not have the right to receive dividends or other distributions with respect to
either Reference Index.

Underlying Risk: The additional pay-off on the Security will be redeemed at an amount determined by
reference to the performance of the Individual Index and such performance will therefore affect the
nature and value of the investment return on the Security. Holders of the Security and prospective
purchasers of the Security should conduct their own investigations and, in deciding whether or not to
purchase the Security, prospective purchasers should form their own views of the merits of an investment
related to the Index based upon such investigations and not in reliance on any information given in the
Term Sheet.

Exchange Rate Risk: The indexation feature of this Note means that Investors subscribing in Jamaican
Dollars will be exposed to currency risk as a result of any adverse movements in the exchange rate of the
Jamaican Dollar versus the United States Dollar". Currency rate movements are affected by local and
international market conditions, the applicable BOJ Weighted Average Selling rate will be used in all
calculations for interest payments and at maturity.
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TERMS & CONDITIONS
Structured Solutions
Indicative Term Sheet
Investment Name 1-Year FR Materials Sector Linked Indexed Principal Protected Note
Issuer & Arranger Sagicor Investments Jamaica Limited (SIJL)
Key Terms
Offer Amount Up to J$ equivalent of US$10 Million
Minimum Issue Size J$ equivalent of US$2 Million
Issue Currency JMD
Subscription Period March 21, 2018 to March 28, 2018
Early Closure Sagicor Investments reserves the right to close on or before the closing date
Minimum  J$ equivalent of US$10,000, multiples of US$1,000 thereafter – Accredited Investor
Subscription  J$ equivalent of US$80,000, multiples of US$1,000 thereafter – Minimum Subscription
Issue Price Par
Tenure 12 Months
Issue Date March 29, 2018
Maturity Date March 29, 2019
Principal Guaranteed by Sagicor Investments Jamaica Limited at maturity
2.25% p.a.
Coupon
Paid semi-annually
Interest Payment September 29, 2018
Dates March 29, 2019
Principal Payment
March 29, 2019
Date
Principal and Interest paid on payment dates.
Settlement Date
Participation paid six (6) business days after maturity.
Underlying Index Materials Select Sector SPDR Fund (Ticker: XLB UP EQUITY)
Redemption
Principal + (Principal x Index Participation)
Payment

Index Participation Participation x Index Return


𝐹𝑖𝑛𝑎𝑙 𝐼𝑛𝑑𝑒𝑥 𝐿𝑒𝑣𝑒𝑙 𝑋𝐿𝐵 −𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑑𝑒𝑥 𝐿𝑒𝑣𝑒𝑙 (𝑋𝐿𝐵)
Index Return {Max, [0, ( 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑑𝑒𝑥 𝐿𝑒𝑣𝑒𝑙 (𝑋𝐿𝐵)
)]}

Participation 15%

Initial Index Level TBD at Issue Date

Final Index Level Values of respective index as at March 29, 2019

Taxation Withholding tax shall apply to coupon payments in accordance with applicable laws
Paying & SIJL, whose determinations and calculations shall be binding in the absence of manifest
Calculation Agent error Page 3 of 10
TERMS & CONDITIONS
Structured Solutions
Indicative Term Sheet Cont’d
Conditions Pertinent to Issue
Allocation Basis First come first serve
1. The Issuer may withdraw this Term Sheet and decline to issue the Note in the
event that the Minimum Issue Size is not achieved on the Issue Date or for any
other reason whatsoever. Alternately, the Issuer may extend the subscription
period.
Other Terms & Conditions
2. Prior to Closing, the Issuer is entitled to make reasonable changes to the
pricing, structure and other terms and conditions of the Note, if taking into
consideration any material unforeseen change in the prevailing domestic or
international market fundamentals.
Indexation
Investors’ JMD investment will be executed at the base exchange rate, which is
Rate of Exchange for JMD
defined as the Bank of Jamaica (BOJ) US$ to JMD Weighted Average Selling Rate
Investment
in effect one (1) business day prior to closing.
Investors will be paid in JMD at the base exchange rate, which is defined as the
Rate of Exchange for JMD Bank of Jamaica (BOJ) US$ to JMD Weighted Average Selling Rate in effect one
Payments (1) business day prior to respective payment days. Principal Protection will be
based on the equivalent US dollar initial investment.
Investors may opt to make subscriptions in USD, for which all final payments will
USD Subscription Option
be made in USD (interest payments and redemption payment)

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PRODUCT DESCRIPTION
PRODUCT OVERVIEW
This Note is a US$ indexed Investment Note structured towards providing investors with exposure to the
US Materials Sector.

This is a Principal Protected Note, which means that investors are guaranteed to receive at maturity, at
least the principal amount that was invested irrespective of the performance of the Materials Select Sector
SPDR Fund. This Structured Note will also provide investors with a guaranteed coupon of 2.25% p.a. paid
semi-annually.

PRODUCT FEATURES
The Note has the following features:
 Principal Protection - 100% guarantee of principal at maturity
 Cash Flow - Guaranteed 2.25% coupon paid semi-annually
 Potential Upside - Potential to earn enhanced returns (free of withholding tax)

PAY-OFF ILLUSTRATION
The scenarios set out below are included for illustration purposes only (they are not intended as estimates
or forecasts of the price movement of the XLB index). In both scenarios the principal amount is
US$100,000 and the price of XLB on the Issue Date is assumed to be US$58.10.

Scenario 1
XLB price increases and closes at $64.90, on the date of maturity; the investor would receive an index
participation of 1.76% plus 2.25% p.a. of coupon payments for throughout the 1 year which equates to an
overall return of 4.01% over the duration of the Structured Note.

Principal Protection

Principal Amount $100,000.00 $100,000.00

Guaranteed Cash Flow (2.25% p.a.)*


12 Months 2.25000% $2,250.00
Derivative-Linked Return (Upside)**
Security Initial Price Final Price % Change

XLB UP EQUITY 58.10 64.90 11.70396%

Index Return 11.70396%

Index Participation 1.75559% (15% x 11.70396%) $1,755.59

Total Return 4.00559% $4,005.59


* Guaranteed Coupon of 2.25% p.a. is subject to withholding tax
** Index Return of 1.76% is free of withholding tax

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PRODUCT DESCRIPTION CONT’D
PAY-OFF ILLUSTRATION CONT’D

Scenario 2
XLB price decreases and closes at $56.40 on the date of maturity; the investor would not participate in any
of the negative index return but would have still received coupon payments of 2.25% p.a. for throughout
the 1 year which equates to an overall return of 2.25% over the duration of the Structured Note.

Principal Protection

Principal Amount $100,000.00 $100,000.00

Guaranteed Cash Flow (2.25% p.a.)*


12 Months 2.25000% $2,250.00
Derivative-Linked Return (Upside)**
Security Initial Price Final Price % Change

XLB UP EQUITY 58.10 56.40 --2.92599%

Index Return --2.92599%

Index Participation 0.0000% -

Total Return 2.25000% $2,250.00


* Guaranteed Coupon of 2.25% p.a. is subject to withholding tax

BACK TESTED RESULT

The illustration below considers the basket participation an investor would have received if this
Structured Note was issued in March 2017 (1 year prior to today).

Principal Protection

Principal Amount $100,000.00 $100,000.00

Back tested 1 Year Basket Participation Performance


Security Initial Price Final Price % Change

XLB UP EQUITY 52.34 58.30 11.38708%

Index Return 11.38708%

Index Participation 1.70806% (15% x 11.38708%) $1,708.06

Total Return 1.70806% $1,708.06

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INVESTMENT RATIONAL
MATERIALS SELECT SECTOR SPDR FUND (XLB) OVERVIEW

Materials Select Sector SPDR Fund is an exchange-traded fund incorporated in the USA. The Fund's
objective is to provide investment results that correspond to the price and yield performance of the
Materials Select Sector Index.

The Index includes companies in the chemicals, construction materials, containers and packaging
industries.

MATERIALS SELECT SECTOR SPDR FUND (XLB) HOLDINGS AND ALLOCATION

Top 10 Fund Holdings* (68.92% of Total Fund)

DownDuPont Inc. 22.14%


Monsanto Co 7.99%
Praxair Inc. 6.62%
Air Products & Chemicals 5.62%
LyondellBassell Industries 5.32%
Ecolab Inc. 4.76%
PPG Industries Inc 4.58%
Sherwin-Williams Co 4.52%
Freeport-McMoRan Inc 3.87%
International Paper Co 3.50%
*As at March 19, 2018

MATERIALS SELECT SECTOR SPDR FUND (XLB) PERFORMANCE

Historical Performance (as at March 19, 2018)

1-YEAR 3-YEAR 5-YEAR

Materials Select Sector SPDR Fund 13.49% 8.15% 10.38%

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INVESTMENT RATIONAL CONT’D
MATERIALS SELECT SECTOR SPDR FUND (XLB) 1 YEAR PRICE HISTORY

Source: Bloomberg

MATERIALS SELECT SECTOR SPDR FUND (XLB) 5 YEAR PRICE HISTORY

Source: Bloomberg

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INVESTMENT RATIONAL CONT’D
OVERVIEW
Global output is estimated to have grown by 3.7% in 2017, which is ½ percentage point higher than in 2016.
The pickup in growth has been broad based, with notable upside surprises in Europe and Asia. Global
growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9%. The revision
reflects increased global growth momentum and the expected impact of the recently approved U.S. tax
policy changes.

The U.S. tax policy changes are expected to stimulate activity, with the short-term impact in the United
States mostly driven by the investment response to the corporate income tax cuts. The effect on U.S.
growth is estimated to be positive through 2020, cumulating to 1.2% through that year, with a range of
uncertainty around this central scenario.

THE SECTOR
The current cyclical upswing provides an ideal opportunity for the specific sectors that will benefit from
the broad based growth. Base metals — such as iron ore, copper, aluminium and nickel — are the lifeblood
of global industrial production and construction. These commodities benefit directly from a healthy global
economy. The growing demand amidst moderate supply (given the low investment in recent years) should
fuel higher prices for commodities.

Prices of industrial commodities should continue to strengthen in the near term, while most agricultural
prices remained broadly stable. With the exception of iron ore, metals prices are expected to increase
moderately in 2018. Agricultural prices are seen broadly unchanged in 2017 and are anticipated to gain
marginally in 2018. Additionally, Gold and platinum prices are expected to recorded modest increases in the
near term owing largely to solid investment demand stemming from a weaker U.S. dollar and escalating
geopolitical tensions between the United States and the Democratic People’s Republic of Korea. Silver
prices fell 2.0%.

The favourable effects of stronger commodity prices and easier financing conditions on some commodity-
exporting countries should boost the returns of companies operating within the sector. The material
sector ETF Materials Select Sector SPDR Fund (XLB) provides an opportunity for investors to benefit from
the improved near-term outlook for commodity prices.

THE ASSET - Select Sector SPDR Fund (XLB)


The XLB seeks to provide precise exposure to companies in the chemical, construction material, containers
and packaging, metals and mining, and paper and forest products industries. This ETF allows investors to
take strategic or tactical positions at a more targeted level than traditional style based investing.

THE RISK & OUTLOOK


Despite the favourable outlook for the sector, and in particular the XLB, there are risks. This includes, the
downside, high asset valuations which raise the possibility of a financial market correction. This could
dampen growth and confidence. Additionally, a faster-than-expected increase in advanced economy core
inflation as a result in demand accelerating, could drive interest rates higher and impact asset pricing.
Further, the inward-looking policies, geopolitical tensions, and political uncertainty in some countries could
also pose downside risks.

These risks are assessed to be low, as the stronger momentum experienced in 2017 is expected to carry
into 2018 and 2019. This is to be supported by the favourable global financial conditions and strong
sentiment which is to help maintain the recent acceleration in demand.

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