Glossary
Coupon
A Coupon in structured products is the contractually defined periodic payment to the holder, expressed as a percentage of the nominal value. Payment is made regardless of the underlying asset's performance, as long as no product-specific conditions are violated. The capital itself is not secured by the coupon.
At a glance
01
Coupons are paid annually, semi-annually, or quarterly, depending on the product structure.
02
A high coupon generally indicates a higher risk profile of the underlying product.
03
For barrier products, the coupon is not forfeited upon a barrier breach; however, the capital may be at risk.
Frequently asked questions
A high coupon primarily signals elevated risk, not a better investment. Products with high coupons frequently have tighter barriers, greater underlying asset risk, or weaker issuer creditworthiness. The coupon should always be assessed in relation to the risk being assumed.
Part of the topic
AMC & Structuring
