# BCP 4 year bond



## SS expert (18 May 2007)

what do you think?
NIB are offering this:

Lock-In up to 12.75% per annum gross with 100% Capital Security.

The growth applicable to each of the 4 years is based on the starting value from the outset of the Bond in June 2007 & NOT from the value at each anniversary date. For example, if the starting value of the basket of shares in June 2007 is 100; the growth applicable for each year will be calculated from a value of 100 & not based on the value at the 1st, 2nd, or 3rd anniversary . At the end of each year growth up to a maximum of 12.75% will be locked in and protected. This growth will be payable along with the original capital invested at maturity. Even if the performance of the basket of shares is 0 or less throughout the term of the bond investors will receive 100% of their investment amount on maturity.

year  (value year end) Gain         over all gain
1           111              11%          11%
2           113              12.75%      23.75%
3           109              9%            32.75%
4           120              12.75%      45.5%
Cumulative Growth 45.5%


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## SS expert (18 May 2007)

The Interest payable on the investment is the aggregate of the average performance (gains & losses) of each of the 24 Shares from (1) 29 June 2007 to 29 June 2008, (2) 29 June 2007 to 29 June 2009, (3) 29 June 2007 to 29 June 2010 and (4) 29 June 2007 to 29 June 2011, subject to a maximum gain of 12.75% on each Share in each period. Interest earned in each period will be paid on
maturity of the Bond.

The maximum rate of Interest that may be earned is 51% gross (10.85% CAR) on the Bond. If the average performance of the 24 Shares is negative in any one year no Interest will payable on the Bond for that year.


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## Brendan Burgess (18 May 2007)

They use misleading titles such as "Quadruple Growth Bond" when they don't pay quadruple growth. So I would not deal with them. I would not waste time analysing any of their products. Brendan


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## verbatim (18 May 2007)

Is the performance of each individual stock capped at 12.75% before the average performance is calculated? If so this could severely affect your ability to acheive 12.75% return each year.


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## ClubMan (18 May 2007)

Brendan said:


> They use misleading titles such as "Quadruple Growth Bond" when they don't pay quadruple growth.


And _IFSRA _doesn't care in spite of this being totally misleading...


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## Friday (18 May 2007)

Despite the previous comments this sounds an interesting investment and I for one would welcome further information and/or analysis.


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## SS expert (21 May 2007)

*TERMS AND CONDITIONS
1. DEFINITIONS*
1.1 ‘the Bond’ means the 4 Year Lock-In Bond.
1.2 ‘the Term’ means the duration of the Investment which is 4 years commencing on 29th June 2007 and maturing on 29th June 2011.
1.3 ‘You/your means the customer(s) who is/are investing funds in the Bond.
1.4 ‘Interest’ means the gross interest calculated in accordance with Section 6 below.
1.5 ‘the Bank’ means The Governor and Company of the Bank of Ireland and its successors, assigns and transferees.
1.6 ‘BCP’ means BCP Asset Management Ltd. and its successors, assigns and transferees.
1.7 ‘The ‘Equity Basket’ means the 24 shares listed in this brochure.
1.8 ‘NIB’ means Danske Bank A/S T/A National Irish Bank.
*2. CONFIRMATION OF IDENTITY*
Further to the money laundering provisions of the Criminal Justice act 1994, you must provide to NIB (1) a copy of passport or full
driver's licence and (2) one recent original utility bill, with your application. Other documentation will be required for non resident,
corporate, pension and charitable organisation applicants.
*3. THE INVESTMENT*
3.1 NIB will place your investment in the Bond in a fixed term deposit account with the Bank who provides 100% capital security. Within
14 working days of the commencement of the Term, you will receive a confirmation of your investment in the Bond.
3.2 At the end of the Term, 100% of the capital invested in the Bond, together with any Interest earned, will be returned to you.
3.3 The Bond is not sponsored, endorsed, sold or promoted by any of the companies included in the equity basket described in this
brochure. These companies have no obligation or liability in connection with the administration, marketing or trading of this product.
3.4 Your money is not invested in the shares of the companies in the equity basket and, therefore, the investment does not benefit from
any dividends paid by the companies.
*4. AVAILABILITY*
4.1 The closing date for applications is 22nd June 2007.
4.2 The minimum investment is €5,000.
4.3 The Bond is available to personal customers, who must be over the age of 18, investing on their own behalf, credit unions, charitable
bodies, companies and pension funds.
*5. WITHDRAWALS*
5.1 No withdrawals may be made from the Bond before the end of the Term.
5.2 In the event of death of a sole investor prior to the expiry of the Term:
(a) the Bond may be transferred into the names of the deceased investor’s personal representatives or of any other person nominated
by such personal representatives, or
(b) the Bond may be redeemed, subject to normal probate regulations, at its realisable value at the date of death as determined by
the Bank which may be less than 100% of the original capital invested. Where the Bond is held in joint names, it will, upon the
death of one of the investors and upon production of such evidence of death as BCP or the Bank require, be transferred into the
name(s) of the surviving investor(s).
5.3 Credit unions, charitable bodies and companies may not withdraw before the end of the Term.
*6. INTEREST*
6.1 The Interest payable on the investment is the aggregate of the average performance (gains & losses) of each of the 24 Shares from
(1) 29 June 2007 to 29 June 2008, (2) 29 June 2007 to 29 June 2009, (3) 29 June 2007 to 29 June 2010 and (4) 29 June 2007 to
29 June 2011, subject to a maximum gain of 12.75% on each Share in each period. Interest earned in each period will be paid on
maturity of the Bond.
6.2 The maximum rate of Interest that may be earned is 51% gross (10.85% CAR) on the Bond. If the average performance of the 24
Shares is negative in any one year no Interest will payable on the Bond for that year.
6.3 Percentage performance (gains and losses) for each Share is calculated as [Final Price -Initial Price]/Initial Price where (1) the Initial
Price of each Share will be the closing level of the Share on 29th June 2007 or the next business day for that Share; (2) the Final
Price for each Share will be the closing level of the Share on 29th June in each of the years 2008, 2009, 2010 and 2011 or the next
business day for that Share. Where a closing level cannot be obtained due to market disruption affecting a Share(s) on any of the
above dates, the closing level of the affected Share(s) will be taken on the next business day unaffected by market disruption.
6.4 In the event of a corporate or other action fundamentally affecting the availability or valuation of a Share, the Bank shall be entitled
to substitute the Share or to adjust any variable that it, in its absolute discretion, deems appropriate in the calculation of the Interest
applicable to the Bond.
6.5 Interest will be paid after deduction of Deposit Interest Retention Tax (‘DIRT’) where applicable. DIRT to be deducted will be calculated
in accordance with the appropriate tax legislation and at the rate prevailing on maturity (currently 23%).
6.6 No interest will be paid to you in relation to the period up to 29th June 2007.
*7. FEES*
BCP receives a fee for structuring and distributing this product. This fee is incorporated in the cost of setting up and running the Bond
and is reflected in the terms of the investment.
*8. MATURITY*
BCP will contact you before the Bond matures to advise of repayment and reinvestment opportunities available at that time. In the
week following maturity on 29th June 2011, the Bank will issue and send individual customer cheques to BCP amounting to the
capital sum secured together with any Interest earned for onward forwarding to each customer. If for any reason Interest cannot be
determined by the maturity date, the bank will pay the capital invested plus interest 2 days after the Interest can be determined.
*9. CONFIDENTIALITY*
BCP, NIB and the Bank will observe a strict duty of confidentiality about the Investors’ financial affairs. Save at an Investor’s request
or with an Investor’s consent, BCP, NIB nor the Bank will disclose any details relating to the Investment to anyone else other than in
the following circumstances:
-to comply with a Court Order and
-to comply with a direction or request from a statutory or regulatory body entitled to such details.
*10. DATA PROTECTION*
BCP, NIB and the Bank are registered under the Data Protection Acts 1988 and 2003 and your personal data held by them will be
maintained in accordance with the obligations of the Act and subsequent legislation.
*11. CANCELLATION*
If total funds received from Investors at the closing date are deemed to be insufficient, the Bank and BCP reserve the right not to
proceed with the Bond issue and to repay Investors.
*12. VARIATION*
These terms and Conditions may be changed if a decision, recommendation or change is made by a Court, Regulator or Ombudsman
or legislation. BCP will notify you personally of any changes and will endeavour to give you at least 30 days notice.
*13. BOND OPERATION*
Neither BCP, the Bank nor their agent(s) will be liable for any loss you may suffer if BCP, the Bank or their agent(s) is prevented from
providing any service to you as a result of industrial action, power failure or other cause beyond the reasonable control of BCP, the
Bank or their agent(s). The Bank acts as deposit taker and is not liable for the responsibilities of BCP to you in relation to the Bond
or for any information provided to you by BCP.
*14. GOVERNING LAW AND JURISDICTION*
These terms and conditions are governed by and shall be construed in accordance with the law of Ireland. By signing the application
form for the Bond, you agree that any dispute may be resolved by the courts of Ireland.


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## SS expert (21 May 2007)

verbatim said:


> Is the performance of each individual stock capped at 12.75% before the average performance is calculated? If so this could severely affect your ability to acheive 12.75% return each year.



Yeah i think it is per share!


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## verbatim (21 May 2007)

Yeah, you're right, each share's performance is capped at 12.75%. This is not attractive to me.

Out of 24 shares, some are going to be underperforming, and the down-side on these shares is not limited like it is on the upside.


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## SS expert (21 May 2007)

verbatim said:


> Yeah, you're right, each share's performance is capped at 12.75%. This is not attractive to me.
> 
> Out of 24 shares, some are going to be underperforming, and the down-side on these shares is not limited like it is on the upside.



but the total loss is limited, 

you run the same risk in any index market


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## verbatim (21 May 2007)

Yes, total loss is limited, it's your potential for decent returns that I'm thinking about.

You could easily imagine a basket of shares being up 10% on average in one year. Some of the shares will have way outperformed this, and some of the shares will have way underperformed this. But with this structure you're clipping the outperformers back down to 12.75% before taking an average, whereas a share which is down 25% will still feed in to the calculations at the full -25%.

I'm only saying it's the structure that I'd be wary of, I don't have any views on the underlying shares.


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## SS expert (22 May 2007)

cheers thanks,

I get what your saying, would the quinn freeway shares be better for investing... in your opinion?


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## verbatim (22 May 2007)

I just had a look at those Quinn Freeways. There's a good selection there, looks like a good way to get exposure to different markets, minimum investment is low, charges are explicit.

It's not capital guaranteed though.


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## marksa (22 May 2007)

verbatim said:


> It's not capital guaranteed though.


 
And isn't that the crux of the difference between BCP and Quinn products (as discussed here). Quinn has no capital guarantee so can leverage up the options on shares/indices that are being bought, while the safer BCP product has to lock up the present value of EUR100 nominal receivable in 4 years in cash.

100% guaranteed = low-medium risk
No guarantee = medium-high risk.

It's all about your risk appetite.


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