Reverse convertibles
Interesting yields
With reverse convertibles, interesting returns can be achieved in sideways trending or slightly correcting equity markets. Protect and Protect Pro reverse convertibles have a barrier that offers additional protection against moderately falling underlying prices up to the set barrier. However, losses may be incurred if the price falls below the barrier.
How does a reverse convertible work?
Payoff profiles
Reverse convertibles
Advantages
- Reverse convertibles offer a fixed, interest rate regardless of the performance of the underlying asset(s).
- Short term of one to two years.
- Opportunity to generate an interesting return despite low interest rates or sideways trending markets.
- Depending on the product variant, reverse convertibles offer partial protection against possible price losses of the underlying.
- Bonus pro reverse convertibles offer the chance of an interesting bonus at maturity. No interest is paid during the term.
Risks to be considered
- The return is limited to the coupon payment or to the bonus (in the case of bonus pro bonds), even if the underlying performs better.
- The repayment of the nominal amount depends on the performance of the underlying. In case of delivery of shares, the equivalent value of the shares is lower than the nominal amount of the bond. Capital loss up to total loss is possible.
- During the term, the share price does not fluctuate 1:1 with the underlying and premature sale may lead to capital loss.
- Investors bear the credit risk of the issuer and of the guarantor, i.e., the risk of changes in creditworthiness or insolvency.
- This security is not covered by any deposit insurance scheme. Investors are exposed to the risk that the issuer and the guarantor may not be able to meet its obligations in the event of insolvency (illiquidity, over-indebtedness) or an official order (bail-in regime). There is a possibility of a total loss of the capital invested.
Important legal information
This information is provided for promotional purposes and is not an investment advice.
These financial products are offered to the public in Austria. The final terms and the (base-) prospectus as well as any supplements form the relevant legal basis for this and are thus exclusively binding. Various regulations of the European Union and the Austrian Capital Market Act require a prospectus for these financial products: see the Prospectus Regulation (EU) 2017/1129 and the Commission Delegated Regulations (EU) 2019/980 and (EU) 2019/979. The issuer has prepared this prospectus and it has been approved by the competent authority of the home Member State. However, this does not mean that this authority also recommends the specific security. The law also requires a key information document ('KID') for specific products that are called 'packaged investment products' and defined in the PRIIPs Regulation. This key information document provides information on the main features of the financial product to which it relates.
Risk disclosure
Please note: Investments in securities present not only the opportunities described in the information provided but also risks. Future performance cannot reliably be predicted based on past market performance. We are not permitted, neither directly or indirectly, to offer, sell, resell or deliver these financial products to natural and/or legal persons (entities) who have their place of residence or, as the case may be, their registered office in a country where this is prohibited by the law. In such cases we are not allowed to offer any production information either. This applies especially to the US and to "U.S. persons" as defined by Regulation S under the Securities Act 1933 as amended.
N.B.: You are just about to buy a product that can be difficult to understand. Before deciding whether to invest, we recommend you read all the information available on the financial product you wish to acquire:
- (base) prospectus
- the final terms and conditions
- any follow-on addenda and, where necessary,
- the key information document (KID)
These documents are available for free at:
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- Bonds issued by Erste Bank Oesterreich:
Erste Bank der oesterreichischen Sparkassen AG, Am Belvedere 1, 1100 Wien
Electronic versions of the documents are available as well: https://erstebank.at/prospekte/srp oder https://www.sparkasse.at/erstebank/rechtliche-dokumente/erste-bank-emissionen
- Bonds issued by BNP Paribas:
BNP Paribas Emissions- und Handelsgesellschaft mbH, Europa-Allee 12, 60327 Frankfurt am Main
Electronic versions of the documents are available as well: https://derivate.bnpparibas.com/service/basisprospekte/ and https://derivate.bnpparibas.com/zertifikate/
Please also make sure to read our customer information sheet:
Important: The performance scenarios described in the key information document are based on a calculation method stipulated by an EU Regulation. Future market developments cannot be predicted with certainty. Although the performance scenarios are based on returns made in the recent past, the performance scenarios only indicate potential returns. The actual returns may turn out to be lower than indicated.
The analyses we make and the conclusions we draw are of a general nature and do not take into consideration the individual investor's personal circumstances like experience and knowledge, investment objective, financial situation, loss-absorbing capacity or risk tolerance.
Conflicts of interest:
Erste Bank Oesterreich is affiliated with Erste Group Bank AG and the Austrian Savings Banks (Sparkassen).
Date: August 2025