Societe Generale Launches Kick Out Plan

Sally Ling

4 April 2013

Societe Generale has launched a new kick out plan - Step Down Autocall 11.5. The plan provides investors with a potential gross return equivalent to 11.5 per cent a year (not compounded), even if markets fall.

The plan’s return is determined by the performance of three UK shares - GlaxoSmithKline, Royal Dutch Shell B and Tesco. Share prices can fall by up to 40 per cent over the investment term and investors can still receive a maximum gross return of 69 per cent at maturity in 2019.

At maturity, if any one of the share prices has fallen by more than 40 per cent on the final valuation date investors would lose a proportion of their initial investment as if they had invested directly in the worst performing stock at the initial level.

The plan has a six-year investment term, but can expire early from year one onwards. To expire early, the share price of each company must match or exceed a pre-defined “kick out level’” (100 per cent on the initial valuation on the first valuation date) on one of five annual valuation dates. From the third year onwards the kick out level reduces by 10 per cent each year to increase the chance of an early payout.

Step Down Autocall 11.5 can be bought like a share through any UK stockbroker at a fixed price of £1,000 per unit (around $1,500) until 19 April 2013. From 22 April, the price will vary on an intraday basis depending on the movements of the share prices of the three companies.