Voestalpine bonds with 5.00 to 8.30% interest – columns

Voestalpine bonds with an interest rate of 5.00 to 8.30%

Although the Austrian steel and technology group Voestalpine, which had to contend with problems even before the corona crisis, had to announce a drastic drop in sales and a high loss in the first half of the financial year, the Voestalpine share (ISIN: AT0000937503) has been around since the summer of 2020 in a solid upward trend. In an analysis published by the experts at Erste Group, the share is rated as worth holding.

For investors who want to achieve disproportionately high returns in the next 12 months with the help of a reasonably stable price development for the Voestalpine share, the Erste Group is currently offering three new, short-term, differently structured bonds on the steel share.

8.30% interest without protection

Investors willing to take risks with bullish market expectations for Voestalpine shares will primarily take a look at the bond with the coupon of 8.30 percent. If the share is quoted on 12/28/21 at or above the exercise price fixed on 12/29/20, the bond, ISIN: AT0000A2LCE1, will be repaid with an issue price of 100 percent and an interest coupon of 8.60 percent. On the other hand, if the share price on December 28, 21 is below the exercise price, the bond will be redeemed by means of share allocation.

6.90% interest with 20% protection

The Protect Reverse Convertible Bond on Voestalpine shares, ISIN: AT0000A2LCF8, has an interest coupon of 6.90 percent and a 20 percent safety buffer. If the share price always remains above the barrier of 80 percent of the exercise price within the observation period (12/29/20 to 12/28/21), the bond will be repaid at the end of the term at 100 percent. If the share price falls below the barrier during the observation period, the bond will be redeemed at the end of the term – unless the share price is then again above the exercise price – also by means of share allocation.

5.00% interest with 20% protection

The 5.00% Protect Pro reverse convertible bond on Voestalpine shares, ISIN: AT0000A2LCG6, will be repaid at 100 percent if the share is quoted on December 28, 21 at or above the barrier at 80 percent of the exercise price. Otherwise, this bond will also be repaid by means of the share allocation. The three bonds can currently be subscribed to with an investment amount of EUR 3,000 or more in denominations of EUR 1,000 at 100 percent plus up to 1.5 percent issue surcharge.

CertificatesReport conclusion: The new reverse convertibles on Voestalpine shares give investors opportunities for gross returns of 5.00 to 8.30 percent in the next 12 months with price drops of up to 20 percent.


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