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4-Year Note linked to DB Commodity Harvest Index seeking 80% Capital-protection through Sharia-compliant mechanism
Summary Terms:
- Product: 4 Years US Dollar Note linked to the Deutsche Bank Commodity Harvest C–10 USD ERAC Index. The Note seeks to achieve capital protection through a Sharia-compliant mechanism and a return equivalent to the positive performance of the Index. It employs a non-directional strategy linked to commodities’ performance
- Minimum Investment Amount: USD 10,000 minimum with multiples of USD 1,000 thereafter
- Nominal Amount: USD 1,000 per Note.
- Investment Period: 4 years
- Reference Index: DB Commodity Harvest C-10 USD ERAC Index
- Capital Protection: 80% capital protection is expected by way of a unilateral promise to purchase from Deutsche Bank AG if the Note is held until maturity (4 Years), achieved through a Sharia-compliant mechanism.
- Valuation: Weekly
- Redemptions: Bi-monthly
- Redemption fee: AED 250/=
- Redemption On Maturity: 80% + Participation x Max [0%, (Index Final / Index Initial) - 80%] Where: Participation: 100% Index Final : The closing value of the index on the Final Reference Valuation Date Index Initial : The closing value of the index on the Initial Reference Valuation Date
- Business Day: Working day in London, UK; New York, US and Dubai, U.A.E
- Annual Management Fee: Nil
- Upfront fee: 1% of the subscription amount
- Issuer: Deutsche Bank AG, London branch
- Sole Distributor: Dubai Islamic Bank (DIB)
- Administrator: Ryland Gray
- Sharia Advisor: Dr. Hussain Hamid Hassan, Sharia Advisor, Deutsche Bank
- Key Features and Objectives : Partial Capital Protection through a Sharia-compliant mechanism entitled at maturity. (80% protection at maturity) Payout of principal and expected profit to be at maturity Client entitled to the positive performance of the index Approved by the Sharia Advisor
- Payout Formula:
The performance of the index is considered and the performance is calculated as per the value of the index at time of redemption.
If the performance is positive, the Note holder may receive the positive performance on the index.
If the performance is negative, the Note holder may receive the capital protection on the principal through a Sharia-compliant mechanism
Example
| Period | National Amount | Initial Index | Final Index | Index Performance Contribution | Redemption % | Redemption Amount in $ |
|---|---|---|---|---|---|---|
| 01 Feb 2009 To 31 Jan 2013 | $1000 | 100 | 140 | 140/100 -80%=60% | 80% + 60% = 140% | 140% x 1000 = $1,400 |
| 01 Feb 2009 To 31 Jan 2013 | $1000 | 100 | 100 | 100/100 – 80% = 20% | 80% + 20% = 100% | 100% x 1,000 = $ 1,000 |
| 01 Feb 2009 To 31 Jan 2013 | $1,000 | 100 | 90 | 90/100 – 80% = 10% | 80% + 10% = 90% | 90% x 1,000 = $ 900 |
| 01 Feb 2009 To 31 Jan 2013 | $1,000 | 100 | 60 | 60/100 – 80% = - 20% | 80% +00% = 80% | 80% x 1,000 = $ 800 |
Sharia Compliance Explanation: The Note is Sharia-compliant as per the Fatwa issued by the Sharia Advisor. The Note is also approved by the Fatwa and Sharia Supervisory Board of DIB.
Indicative NAV: