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Who is Banca IMI?

Banca IMI is the investment bank of the Intesa Sanpaolo Group. Created in October 2007 by the merger between Banca Caboto and Banca IMI, with its 800 professionals, Banca IMI is an investment bank working on major domestic and international markets in Investment Banking, Capital Markets and Structured Finance. Banca IMI has offices in Milan, London and New York, through its subsidiary Banca IMI Securities Corporation. It is one of the leading Italian financial operators, with a strong presence in equity and debt placements, corporate finance transactions and securities trading. It structures and creates investment products for both private and institutional retail customers. Additionally, through Market Hub, the platform for access to markets, it actively researches MiFID compliant Best Execution of orders and provides access to more than 70 domestic and international markets for equities, derivatives and bonds.
The Banca IMI's creditworthiness is rated by the major credit rating agencies. The short and long term ratings in terms of outlook, Moody's, S&P’s and Fitch are available on this internet link: https://www.bancaimi.com/en/bancaimi/chisiamo/documentazione/rating.

Who are Banca IMI products suitable for?

Banca IMI has a very rich and wide product offering to satisfy a large number of investment needs. Banca IMI products are suitable for all investors meeting the diverse risk tolerances and different time horizons of investors.

Where are Banca IMI products listed and traded?

The products issued by Banca IMI are listed and can be traded on the MOT and SeDeX of the Italian Stock Exchange and on the MTF EuroTLX. The trading may take place in the days the markets are open from 9:00am to 5:25pm on SeDeX and from 9:00am to 5:30pm on EuroTLX. In both markets, liquidity is ensured by the constant presence of the Market Maker / Liquidity Provider and obligations of the listing market.

How do I subscribe to or purchase Banca IMI products?

Banca IMI products can be taken out with the placement agent. After they have been issued, the products can be traded on the secondary market: MOT and SeDeX of the Italian Stock Exchange and on the MTF EuroTLX.

What is the minimum investment amount?

There are minimum amounts to suit all budgets, in the case of Certificates between 100 and 1000 Euros depending on the issue prospectus, making Banca IMI products suitable for all types of investors.

How do I find Banca IMI products that interest me?

On the website http://www.bancaimi.prodottiequotazioni.com/EN you can search for the desired product by entering the ISIN code in the search field on the Home page

What is the ISIN?

The Instrument Security Identification Number (ISIN) is the 12-digit alphanumeric code that uniquely identifies a financial instrument. The first two letters of the code identify the country of reference and the figures represent the local code attributed to the title.

What is the MOT?

An acronym for the electronic bond market, the MOT is the market organised and managed by La Borsa Italiana where Government and Non-convertible bonds are negotiated. The MOT is divided into two segments, DomesticMOT and EuroMOT: first is used for trading Italian government bonds and other debt securities, while the second is used for the trading of foreign bonds, Supranational Bonds and Eurobonds.

What is the SeDeX of the Italian Stock Exchange?

The SeDeX, acronym for Securitised Derivatives Exchange Italian Stock Exchange, is the regulated market of securitised derivatives of the Italian Stock Exchange. A wide range of Covered Warrants and Certificates are listed on the SeDeX. Market segmentation divides the instruments listed in classes of homogeneous products based on the investment objectives and characteristics fixed at the time of issue.  The segments under the Regulation of the Italian Stock Exchange are: Covered Warrants; Leverage Certificates and Investment Certificates. Negotiations on the SeDeX of the Italian Stock Exchange takes place on market days open from 9:00am to 5:25pm.

What is EuroTLX?

EuroTLX is a Multilateral trading facility, an alternative to the regulated market of the Italian Stock Exchange that offers the possibility of trading an extensive range of financial instruments, especially bonds. Liquidity is ensured by a continuous competitive auction mechanism and the presence of at least one Liquidity Provider during the trading hours of the market for any financial instrument. For all financial instruments, trading hours are from 9:00am to 5:30pm.

What are Bonds?

Bonds are debt securities of an issuer, whether a public entity, sovereign state, supranational, listed company or other legal entity. Issued for the purpose of raising funds, the repayment of the principal and interest payments in the manner prescribed in the issue phase is required at maturity. Bonds may pay coupons with a fixed or variable interest rate. Some types of bonds do not provide for the payment of interest in the form of coupons and the remuneration for the investor is the difference between the purchase price and the settlement amount at maturity. The degree of solvency of the issuer is measured by the rating assigned by specialised agencies. A high reliability corresponds to a high rating. The non-repayment of the bonds results in a "default" by the issuer and a loss for the investor.

What are Plain Vanilla Bonds?

The Plain Vanilla Bonds are debt securities issued by sovereign states, government agencies, supranational entities, listed and non-listed companies that give the holder the right to be repaid at maturity the nominal value of the Bond and interest, through the payment of periodic coupons or at maturity. The main feature of these instruments is their simplicity in fact the term 'plain vanilla' refers to the basic version of the ice cream. The structure of Plain Vanilla Bonds makes these products suitable for investors who prefer to have a simple structure on the flows of interest and capital from the investment.

What are Structured Bonds?

Structured Bonds are financial products with a variable return that arise from the combination of a traditional debt instrument, fixed or variable rate, with one or more derivative contracts. They allow the investor to benefit from the movement of the underlying asset and are generally linked to the performance of equities, indices, currencies, interest rates or bonds. The bond component provides the repayment at maturity of the nominal value and, if provided, the receipt of periodic coupons. The derivative component affects the variability of the final performance of the investment.

What are the Inflation Linked Bonds?

Inflation-linked bonds are financial products which on the one hand guarantee the repayment of the nominal value at maturity and the other offer a return indexed to the performance of the inflation rate. Typically the time horizon of this type of investment is medium term.

What are Bonds with Cap and Floor?

Bonds with Cap and Floor are floating rate securities that guarantee a minimum and maximum coupon rate. The Floor indicates the minimum interest rate that will be paid by the bond even in the event the reference rate falls below this level. The Cap indicates the value of the maximum interest rate that will be paid by the bond: increases in market rates over this threshold do not translate into a higher return to the investor; in this case the bond behaves like a 'fixed rate bond.

What are the Fixed-rate bonds?

Fixed-rate bonds are the simplest bonds available on the market. After purchasing the bonds, the investor knows the flow of coupons received from holding the bond due to the presence of a predetermined interest rate for the duration of the loan. The fixed rate bonds, however, are affected by movements in market interest rates: an increase in the cost of money causes a reduction in the price of the bond on the secondary market. The price of bonds tends to rise in the event of a reduction in the cost of money.

What are Variable rate bonds?

Variable rate bonds are financial instruments in which the value of the rate recognised by the periodic coupon changes over time and does not remain constant throughout the life of the bond (as in the case of fixed-rate bonds). Typically, the coupon settlement is determined by adding an excess return to a market rate such as Libor or Euribor. The excess return is given by the spread, i.e. the interest rate added to the market that the issuer pays the bondholder.

What are Step Up and Step Down Bonds?

Step Up and Step Down Bonds are a special category of plain vanilla bonds in which the coupons are fixed and predetermined but vary over the years. Specifically, Step Down bonds are bonds with coupons that decrease over time whereas Step Up bonds are where the coupon rate rises during the life of the bond.

What Zero Coupon Bond?

Zero Coupon bonds, also known by the acronym ZCB, are instruments that do not pay interest in the form of coupons. The remuneration for the investor is only the difference between the redemption price and the purchase price of the security. This is why it is said that the performance is "implicit" because it is embedded in the difference between the two prices.

What are Callable Bonds?

Callable bonds are bonds having a provision giving the issuer the right to prepay the loan. The option allows the investor to receive a higher interest rate than the current market for similar without this option.

What is rating?

Rating is the judgment given by an independent specialist, expressed by an alphanumeric code, which indicates the creditworthiness of a debtor or a particular issue of securities. Standard & Poor's, Moody's and Fitch are the major rating agencies (also called "the three sisters"). The rating is issued as a result of a detailed analysis of the company's financial situation being valued and the overall context in which it operates. The rating is subject to periodic review.

What is a Certificate?

A Certificate is a financial instrument issued by a financial intermediary that allows the investor to take a position on an underlying financial asset, such as a share, a share index, a currency, a commodity or an interest rate. The obligation of payments flows due to the holder of the Certificate is with the issuer, which details the specific features of each financial instrument into the appropriate prospectuses prepared in issue phase.

What is an Underlying?

An underlying is a financial or real asset that is connected to the value of another financial instrument, such as a Certificate, a Bond or a Covered Warrant. Depending on the characteristics determined in the process of issuing the bond, the underlying asset can be a share, share index, a commodity, a currency, interest rate or bond. The underlying asset can be a single or several financial assets, such as a basket of shares, a basket of indices or a basket of commodities.

What is a Leverage Certificate?

A Leverage Certificate is a financial instrument that provides more than proportional exposure to changes in the price of the underlying financial asset. Having no capital protection, these instruments are generally suitable for investors with higher risk tolerance.

What are Investment Certificates?

Investment Certificates are financial instruments suitable for the implementation of medium/long term investment strategies. On average, the mean duration of this type of Certificate is approximately between 3 and 5 years. Depending on whether the Investment Certificate replicates linearly the performance of the underlying or is characterised by the presence of one or more accessory options, the Investment Certificates are, in turn, divided into two types:

  • Type A Investment Certificate, i.e. a Certificate that replicate linearly and without leverage the performance of the underlying;
  • Type B Investment Certificate, i.e. a Certificate characterised by the presence of one or more accessory options making the structure of the certificate more complex.

What are Capital Protected Certificates?

Capital Protected Certificates are financial instruments that offer the opportunity to invest upward or downward on the underlying financial assets ensuring investor protection at maturity of all or part of the issue price of the Certificate. For this reason they are suitable for investors with a propensity to lower risk.

What are Conditional Capital Protected Certificates?

Conditional Capital Protected Certificates are financial instruments that offer protection at maturity of the issue price of the Certificate provided that the value of the underlying financial asset does not reach certain levels established at the time the Certificate is issued. This level is called the Barrier Level and is fixed as a percentage of the value of the initial evaluation of the underlying financial asset.

What are Non-capital protected Certificates?

Non-capital Protected Certificates are financial instruments that replicate the dynamic evolution of the value of the underlying financial asset. Depending on the type of Certificate, they benefit from the bullish or bearish movements of the underlying asset. By replicating the trend in value of an underlying financial asset, the investor is exposed to a lack of capital protection just as if he were investing directly in the asset. Depending on the conditions set at the time the certificate was issued, they can replicate more or less proportional linear movements. This affects the participation factor set by the issuer, i.e. the percentage by which the investor participates in the movements of the underlying. The movements of the underlying factors are amplified by the Certificate with the participation of over 100%. They are reduced proportionally with participation factors less than 100%.

What are Equity Protection Certificates?

Equity Protection Certificates are financial instruments belonging to the category of Capital Protected Certificate allowing investments upward or downward on the underlying financial asset, such as a share, a share index, a currency, a commodity or an interest rate. Their peculiarity is to protect at maturity, in whole or in part, the value of the issue price of the Certificate in case the underlying financial asset were to move in the opposite direction compared to the expectations of the investor. The Equity Protection Certificate can be Long or Short. The long version allows the investor to participate in the rising trend of the underlying financial asset and falling trends in the underlying in the short version.

What are Benchmark Certificates?

Benchmark Certificates are financial instruments without capital protection that allow the investor to invest upward or downward on underlying financial asset, such as a share or sector index, a commodity, an exchange rate, an ETF or fund. These are instruments that replicate, upwards or downwards, the performance of the underlying financial asset without leverage and allow investment in the entire basket of securities comprising the index or the financial asset referenced.

What are Digital Conditional Capital Protected Certificates?

Digital Conditional Capital Protected Certificates are financial instruments that allow the investor to invest in an underlying financial asset such as a share, a share index, a currency, a commodity or an interest rate. The peculiarity of this type of instrument provides the investor with the possibility of periodic income determined at the issue phase. The protection of the issue price of the Certificate is contingent upon the trends of the underlying financial asset.

What are Digital Capital Protected Certificates?

Digital Capital Protected Certificates are financial instruments that allow investment in an underlying financial asset, such as a share, a share index, a currency, a commodity or an interest rate. Two peculiarities of this type of instrument: the opportunity for the investor to receive a regular income determined at time of issue and the protection of all or part of the issue price of the Certificate.

What are Express Certificates?

The Express Certificate are financial instruments belonging to the category of Conditional Capital Protected Certificate to that allows for investment  in an underlying financial asset such as a share, a stock  index, a currency, a commodity or an interest rate. Their distinctive feature is that it can expire prematurely redeeming to the investor a pre-defined premium paid at the occurrence of predetermined default conditions established at the time the certificate was issued.  This premium is called the Premature Exercise Amount. The capital protection of the issue price of the Certificate is subject to the failure to reach a certain value set in the process of issuing the Certificate, from the underlying financial asset. This threshold is called the Barrier Level

What are Credit Linked Certificates?

The Credit Linked Certificates are financial instruments belonging to the category of Conditional Capital Protected Certificates that offer investors the opportunity to achieve regular premiums related to the ability of one or more reference company to meet its obligations.  These are called Reference Entities. These amounts, called regular premiums, are paid only if a Credit Event affecting the Reference Entity does not occur during the life of the Certificate. The credit event can be, for example, failure or non-payment of coupons or debt restructuring of one or more Reference Entities of the Certificate. In the event of a Credit Event, the capital protection is lost and at maturity the investor will receive only a fixed percentage of the issue price of the Certificate. The Credit Linked certificates expose the investor to the risk of insolvency of the Certificate's reference company or companies as well as issuer risk that characterises all Certificates.

What are Twin Win Certificates?

Twin Win Certificates are financial instruments belonging to the category of Conditional Capital Protected Certificates that offer investment in an underlying financial asset such as shares, a stock index, a currency, a commodity or an interest rate. Their peculiarity is to enable investors, at maturity and within certain limits set during the issue of the Certificate, to participate in the performance, in absolute value, registered by the underlying asset. The extent of participation in the performance of the underlying financial asset is fixed at the time the Certificate was issued. In order for this to happen, the underlying asset, at maturity, must be worth more than a certain level which was determined at the time the certificate was issued. This threshold level is called Barrier level and its breach, cause the capital protection to be lost, resulting in the loss of the investment value for the holder of the Certificate.

What are Accelerator Certificates?

Accelerator Certificates are financial instruments belonging to the category of Conditional Capital Protected Certificates and allow for upward investment in an underlying financial asset, for example a stock or sector index, a commodity, an exchange rate, an ETF or a Fund. Their peculiarity is to replicate the underlying performance trend more than proportionally.

What are Bonus Certificates?

Bonus Certificates are derivative financial instruments belonging to the category of Conditional Capital Protected Certificates.  These allow for investment in an underlying financial asset such a share, a stock index, a currency, a commodity or an interest rate. A feature of this type of tool is the ability to redeem to the investor, at maturity, a return through the payment of a premium, the bonus, even in the event of a moderate fall in the underlying asset if the underlying does not reach the level barrier. These are used when a positive/rising or lateral market is expected.

What are the options?

The Options are derivative contracts that give the buyer the right to buy or sell an underlying asset at a fixed price.

What are Call type options?

Call type options are options that allow the holder, without obligation, to purchase a specific underlying asset at a predetermined value at the time it is issued, or within a set period. If the right to exercise is continuous and within a fixed period established at the issue phase of the certificate the call option is an American style right'. If the rights are fixed on certain dates of the year, is said to be a European style option. Call options provide for the development of strategies with bullish or moderately bullish market expectations.

What are Put type options?

Put type options are options that allow the holder, without obligation, to sell a certain underlying asset at a predetermined value in the process of being issued, or within a set period. If the right to exercise is continuous and within a fixed period established at the time of issue phase of the certificate the call option is an American style right'.  If the rights are fixed on certain dates of the year, is said to be a European style option Put options allow you to develop strategies with market expectations provide for the development of strategies with downward to moderately bearish market expectations.

What is a Covered Warrant?

Covered Warrants are financial instruments that give the right but not the obligation, to buy or sell a specific underlying asset at a predetermined value in the process of being issued, or within a set period. If the right to exercise is continuous and within a fixed period in issue phase, the Covered Warrants is called an 'American' style warrant. If the right to exercise is fixed on certain dates of the year, the Covered Warrants is called a 'European' style warrant. They are derived instruments because their value is attributable to the trend in value of another asset, known as the underlying asset (any asset traded on a regulated stock exchange, usually stocks, indices, currencies, bonds and commodities). Covered Warrants are divided into two categories, the Covered Call Warrant and Covered Put Warrants. The first are suitable for investors with bullish expectations, the second are for those who anticipate a fall of the underlying asset.

What are Greeks?

Greeks are indices of sensitivity that summarise the impact of the value of some variables on the market value of a financial asset. They are called Greeks as they are represented by the letters of the Greek alphabet. The Delta coefficient measures the sensitivity to the variation of the value of that of the underlying. The Vega coefficient influences the value of the volatility of the underlying component. Rho represents the sensitivity of the value of the financial asset to the change in interest rates. Gamma expresses the variation of the Delta to the variation of a unit of the underlying. Finally, Theta is the index indicating the decline of the time value, i.e. the way in which the value of the underlying changes with decreasing residual life.

Text modified: 13.04.2015