Crédit Agricole Assurances breaks new ground with a bond-backed unit of account
Crédit Agricole’s Regional Banks and the LCL network are promoting a new savings vehicle in a tax-advantaged life insurance wrapper, available until 27 January 2009.
This innovative product offered by Crédit Agricole Assurances, Emission Obligataire Crédit Agricole S.A. – Janvier 2009, is a unit-linked life insurance policy fully backed by a Crédit Agricole S.A. bond. Customers holding eligible life insurance policies, such as Floriane, Espace Liberté, Predissime 9, Lionvie Rouge Corinthe, Rouge Corinthe, Lionvie Vert Equateur and Acuity, earn a gross annual yield of 5.20% reinvested over eight years.
Given the present financial environment, the aim is to offer customers a safe, attractive product combining the advantages of a bond and the benefits of a life insurance investment:
- the interest rate is known at the subscription date and is fixed for the life of the contract;
- annual returns are reinvested and paid at maturity (8 years);
- the product's value is weakly correlated with equity market fluctuations, and the low volatility meets customer demands for security;
- advantageous tax treatment for lifetime redemption;
- a favourable structure in the event of the investor's death.
Term sheet for Emission Obligataire Crédit Agricole S.A. – Janvier 2009
- A senior bond issued by Crédit Agricole S.A: Senior bonds carry special redemption conditions and take priority over other debt securities (first claim)
- Life: 8 years
- Annual gross yield reinvested and paid at maturity in 8 years: 5.20%
- Fixed-rate bond: a stable yield over 8 years; the interest rate is known at subscription date and is fixed for the 8-year life
- Zero-coupon: no coupon payments for 8 years, the bond is redeemed at par on maturity (principal and interest)
- Issue at par: i.e. 100%
- Not eligible for the minimum 20% transferable under the “Fourgous” arrangement, which governs transfers from euro-denominated life insurance investments to unit-linked contracts.