Kiwoom Securities said on the 21st it will publicly offer a total of 20 billion won of the "Kiwoom 4000th equity-linked securities (ELS)," which uses Samsung Electronics and SK hynix as underlying assets.
The product is designed with a three-year maturity in a step-down structure. Early redemption dates come every six months, and the early redemption barriers decrease stepwise to 85%-85%-85%-80%-75%-70%.
If, on the first early redemption date, the share prices of both Samsung Electronics and SK hynix are at least 85% of their initial reference prices, it is redeemed at a pre-tax annual yield of 32.1% (16.05% on a six-month basis). If the conditions are not met, it moves to the next early redemption date.
The knock-in barrier for the ELS is set at 35%. If either of the two underlying assets falls by 65% or more from the initial reference price, which will be the closing price on the 28th, there is a possibility of principal loss. In general, the lower the knock-in barrier, the lower the risk of principal loss.
However, this product is classified as a high-complexity financial investment product that carries the possibility of a total loss of principal depending on fluctuations in the prices of the underlying assets. The risk grade is "very high risk (grade 1)." In addition, in special situations such as early redemption at the investor's request or the issuer's credit risk, losses may occur even if the knock-in barrier is not reached.
Investors subject to the cooling-off period must subscribe by 5 p.m. on the 26th and confirm their intention to join by 1 p.m. on the 29th.
A Kiwoom Securities official said, "With the recent strength in large-cap semiconductor stocks, supply of domestic stock-type ELSs that use Samsung Electronics and SK hynix as underlying assets is increasing," and added, "Given the significant concerns over market volatility, we are focusing on launching low knock-in products with reduced knock-in barriers."