• Reverse convertible: the forerunner of the BRC family: The reverse convertible is the forerunner of the BRC family and has no barrier.
• Redemption and risk: Redemption depends on whether the underlying asset is at or above the strike at maturity. If this is the case, the investor receives 100% of the nominal value back. Otherwise, the underlying asset is delivered or a cash settlement is made. Without a barrier, there is a greater risk of not recovering the nominal in full. In return, the coupon is usually higher.
• Coupon payment: the coupon payment is independent of the performance of the underlying asset. Reverse convertibles are suitable for investors who expect at least a sideways movement of the underlying asset.

• Popularity in Switzerland: These products are particularly popular in Switzerland.
• Multi BRCs: a Multi BRC is based on several underlying assets. This enables higher coupons or lower barriers, but also increases the repayment risks.
• Redemption conditions: provided that none of the underlying assets reach or fall below the barrier, the investor receives the nominal amount back. If the barrier is breached by an underlying asset, the partial protection expires. All underlying assets must then be at or above the initial level at the final fixing in order to achieve the maximum return.
• «Worst of» principle: if this is not successful, the redemption is linked to the underlying asset with the worst performance, known as the «worst of» principle.

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• Double coupon opportunity: with this BRC variant, the investor has the opportunity to receive a double coupon payment.
• Requirements: at maturity, the underlying assets must be at or above their double coupon trigger level, which usually corresponds to the strike.
• Redemption modalities: The redemption modalities are similar to classic BRCs.
• Security and risk: the chance of a double coupon payment comes at the expense of security due to smaller barrier distances.

• Combination of variable interest rate and fixed premium: a floating coupon BRC combines a variable money market interest rate with a fixed premium.
• Payment frequency: the payout is usually made according to the frequency of the variable interest.
• Redemption conditions: the redemption modalities are the same as for classic BRCs.
• Target group: this variant is interesting for investors who want to benefit from rising interest rates.

• Early redemption for BRCs: these BRC variants allow the issuer to call the bond early, which leads to repayment of the nominal value and a maturity-dependent coupon.
• Autocallable or early redemption BRC: with these BRCs, the underlying asset is tested on fixed observation days. If the underlying asset is at or above a certain level, usually the initial value, early redemption and payment takes place within a few days. In the case of multi-products, all underlying assets must reach the price threshold in order to trigger the autocallable function.
• Callable BRC: here, the issuer can exercise the call option at its own discretion on the observation dates.
• Trigger BRC: Trigger BRCs are checked daily to see whether the underlying asset reaches the trigger level. If this is the case, the investor receives their capital and the pro rata coupon back a few days after the trigger event. The trigger levels are usually a few percent above the strike.
• Risk and conditions: the call option leads to uncertainty about the expiry date and a reinvestment risk, which is offset by better conditions. Products with an issuer call option offer higher coupons and/or lower barriers than traditional BRCs.

Good to know: if early redemption does not take place, early redemption, callable and trigger BRCs will run until regular maturity and the usual redemption terms will apply.

• BRC with participation: in addition to the fixed coupon payment, a BRC with participation offers the opportunity to participate in the positive performance of an underlying basket.
• Additional payment: if the underlying basket performs positively, there is a further payment in addition to the coupon, which corresponds to the average percentage price gain of the underlying assets.
• Negative performance without reaching the barrier: in the event of a negative performance without the barrier being reached, the investor receives the full nominal value in addition to the coupon.
• Barrier contact: if an underlying asset reaches the barrier during the term, the participation opportunity is lost. As with a classic BRC, the redemption then depends on the level of the underlying assets at the final fixing date, plus the guaranteed coupon.

• Exchange rate risk for BRCs: underlying assets of a BRC are often traded in currencies other than the product currency, which entails an exchange rate risk.
• Quanto mechanism: BRCs with an integrated quanto mechanism eliminate this risk. These products are ideal for investors who want to separate investment and currency risk.
• Costs of currency hedging: currency hedging is not free of charge. Quanto BRCs generally offer less attractive conditions than comparable BRCs without currency protection.

• European option for BRCs: by using a European option, issuers can significantly change the way a BRC works.
• Barrier only for final fixing date: with this variant, the barrier is only active on the final fixing date, meaning that price changes during the term play no role here.
• Interesting for certain investors: this product variant is of interest to investors who expect a correction in the short term but believe that the underlying asset will stabilize or recover in the long term.