Risk of partial or total capital loss (insolvency risk) and subordination ranking
A trigger event may cause the nominal value to fall to zero. This reduced value will be the “redeemable” value if the Bank becomes insolvent or is wound up;
Holders of the Profit Units will receive repayment before holders of the Bank's shares but after the Bank’s other creditors. Holders of the Profit Units rank below the Bank’s other creditors..
Risk that returns are not guaranteed
The return on the Profit Units is subject to the existence of distributable profits, a decision by the Bank’s Board of Directors to make such a distribution, compliance with applicable regulatory requirements and the non-cancellation of that distribution as a result of a discretionary decision by the Bank’s Board of Directors to this effect, or the absence of mandatory cancellation of the distribution for regulatory reasons.
Liquidity risk
The Profit Units are non-transferable except where inherited and are not redeemable at the request of holders.
Early redemption risk
Early redemption is possible at the Bank’s discretion, five years after the issue, subject, inter alia, to the CSSF’s prior approval.