Bonds Linked Investment (BLI)

Product OverviewName and Product Type
The performance of this investment product is related to the movements of the benchmark interest rate and the interest rate of the Indonesian government bond, allowing attractive potential returns for the Customer.Name of Issuer
PT Bank DBS IndonesiaProduct Characteristics

Fixed Rate Step Up, as one variant, generates return at a stabilized interest rate which increases year after year. However, the Bank has the right to divert the payment level into a floating interest rate.

Coupons are periodically paid on specific dates.

Placement tenor is 1 to 5 years.

Available in USD currency.

Benefits

The investment principal will be 100% protected if the investment is held until maturity.

The Customer has the potential to get coupons with higher rates than the regular bond products.

The Customer has the potential to keep getting fixed high coupons in a downtrend interest rate environment.

Main Risks

BLI is a form of Structured Product that carries risks not normally associated with ordinary bank deposits. The Customer should therefore not treat BLI as a substitute for ordinary savings or time deposits.

BLI is meant to be held to maturity. There might be loss occurs when Customer redeem the investment before maturity date (depends on valuation from bank on early redemption date), and the Bank shall be entitled to deduct any losses that might be incurred from the redemption, as BLI is not a negotiable or transferable instrument.

The Bank has the right to change the interest rate before maturity, in which case the coupons for the Customer will be at the floating interest rates, which may be lower or higher than the interest rates of time deposit in general.

Requirements & ProceduresSome requirements to be fulfilled by Customer to subscribe BLI:

Having accounts in PT Bank DBS Indonesia.

Customer must complete risk profile and ensure risk profile suitability with the product.

BLI Simulation

Scenario A (Best Scenario)

No switching events has occurred, and no bonds termination events has occurred in relation with the Reference Entity on or before the maturity date.

Assuming that the coupon payment of the benchmark bonds has been carried out accordingly as scheduled by the Reference Entity throughout the BLI tenor:

Customer will receive payment amount on payment date according to formula: Principal amount x interest rate x day calculation fraction.
Customer will receive 100% of principal amount on maturity date.

Scenario B (Bad Scenario)

Switching event occurs

Bond termination event occurs

With assumption:

Coupon payments for the benchmark bond has been carried out accordingly as scheduled by the Referring Entity until the notification date of the bond termination event

Switching event occurs at the most immediate date, for example, on 5th coupon payment date

Bond termination event occurs, for example, failure to pay occurs after the switching event date with respect to the Reference Entity during the 1st quarter of year 2.

Accordingly:

Customer will receive payment amount on payment date according to formula: Principal amount x interest rate x day calculation fraction

The interest rate payment will be switched to floating interest rate, which will take in effect since and including the switching date

The last payment date will be the immediate payment date prior to bond termination event notification date

Customer will receive the payment amount of the bond termination event on the bond termination event settlement date. There is possibility the Customer may lose the entire initial investment amount in bond termination event.

Scenario C (Worst Scenario)

Bond termination event in relation to the Reference Entity occurs on value date.

With assumption:

Bond termination event, for example, failure to pay occurs with respect to the Reference Entity on value date.

Accordingly:

Bank will provide notification of bond termination event to Customer and Customer will not receive any payment.

IMPORTANT
Dates, rates mentioned and all calculation above are for illustration only. Those information and numbers are not the representative of the actual performance or future performance of this product.