Get more out of your assets with Portfolio Finance

1. "Portfolio Finance" refers to Investment Plus and Portfolio Power. Investment Plus is a term loan credit facility for re-investment, while Portfolio Power is an overdraft credit line for general purposes.
2. Loan interest rates will be subject to prevailing market interest rates and may be subject to change from time to time.
3. Depending on individual collateral used.
4. Eligible collaterals include equities, bonds, mutual funds, structured products and deposits. Eligible deposits include the total available deposit (Time Deposit, Call Deposit &/or Premium Account) in Currency Manager Account excluding "In-trust-for" Account Deposit, Hold-deposit, Pledged-deposit, Gold Manager, RMB Deposit, Market Linked Account and MaxiSavings.

The following risk disclosures are not exhaustive description of all the risks involved, but a general statement of the risks commonly associated with Investment Plus and Portfolio Power (“Portfolio Finance”).

Leverage Risk

The use of leverage amplifies the return (both positive and negative) of an investment portfolio, meaning a small price and/or foreign exchange movement will have a multiplying effect on your corresponding gains or losses. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, their positions may be liquidated. In the event that the market deteriorates rapidly beyond the Margin Call level and reaches the Force Sell level, Citibank (“ the Bank”) reserves the right to close out all or part of the outstanding positions without notice and without any Margin Calls. You will remain liable for any resulting deficit in their accounts. This brief statement cannot, of course, disclose all the risks and other significant aspects of trading in currencies/derivatives or any other leveraged investment products. You should therefore carefully study the market before they trade.

Price Risk

Leveraging on your existing margin deposits and/or securities such as stocks, mutual funds, bonds, notes, Premium Accounts is highly speculative and risky and is subject to the risk of market fluctuation. The value of your holdings may be reduced as a result. The use of leverage means that relatively small price movements will have a multiplying effect on your corresponding gains or losses. You should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.

Interest Rate Risk

The loan interest rates may vary during the period of investment or utilization of the Portfolio Finance facility, the interest costs for the client may therefore also vary. This may affect the net return on investments or overdraft credit limit.

Liquidity Risk

During adverse market conditions, you may not be able to liquidate all or any part of their holdings.

Credit Risk

The approved line amount granted is dependent on the Loan-to-Value Ratio allowed for each margin deposit and/or security, in which the Loan-to-Value ratio is subject to change by the Bank without notice, and is based on the full discretion of the Bank’s assessment of risk factors. The Loan-To-Value ratio for securities like bonds and notes is impacted by negative/downgrade ratings. Any security that falls below the Bank’s designated minimum rating by Moody and S&P may result in the security not being marginable and a Margin Call or Force Sell could be triggered as a consequence.

Currency Risk

If the currency of the loan is different from the currency of the underlying investments and/or deposits, foreign exchange rate movements may affect the value of the loan, underlying investments, and/or deposits, which may result in Margin Call and/or Force Sell. You should understand and agree that the requested Loan Currency is made at your sole discretion without solicitation from the staff of the Bank, and loan currency switching is not applicable for Investment Plus and you still want to request for the term loan drawdown with Investment Plus. Relatively small movements in the exchange rate will have a multiplying effect on your corresponding gain or loss and resulting in the possibility of Margin Call and Force-Sell.

Mark-to-Market (“MTM”)Losses

The leveraged position is marked-to-market intraday, daily, weekly or monthly, whichever is applicable, and you may be called upon at short notice to deposit additional funds within the prescribed time to avoid a Force Sell of your leveraged positions, otherwise, your positions may be liquidated. In the event of a Force Sell, the Bank reserves the right to close out all or part of the outstanding positions without any prior notice and Margin Calls.
Losses may exceed the amount of initial deposits and/or securities that are pledged by you as collateral. You will remain liable for any resulting deficit in your accounts.

Pre-Margin Call

For Investment Plus, in the event that the erosion of the Initial Equity Position (that is, loan outstanding divided by weighted Loan-to-Value ratio, then minus the loan outstanding at the relevant time) falls within the region of 0%<×<25%, the Bank shall have the absolute discretion to exercise the right:

• to decline the execution of any type of transaction of the customer in respect of any eligible investments and/or eligible deposits or,
• to apply any settlement proceeds to restore the Initial Equity Position to below 0% or such lowest possible percentages.

Margin Call

The implications of Margin Call levels for the leveraged facility and positions may be liquidated at the discretion of the Bank if a Margin Call is not complied within the stipulated time period. The Margin Call levels are also subject to change by the Bank without prior notice and the Bank has no obligation to notify you of the aforesaid event, therefore it is your duty to monitor the same. For Investment Plus, Margin Call trigger is set at the level where the Initial Equity Position erodes for 25% or above. If a Margin Call is triggered, you need to top up the shortfall margin within 7 calendar days.

Force-Sell

The implications of Force Sell levels for the leveraged facility, including all or any part of your margin deposits and/or securities may be realized for settling all or any part of their loan outstanding without any notice. In the event that the market deteriorates rapidly beyond the Margin Call level and reaches the Force Sell level, the Bank reserves the right to close out all or part of the outstanding positions without notice and without any Margin Calls. The Force Sell levels are also subject to change by the Bank without prior notice. For Investment Plus, Force Sell trigger is set at the level where the Initial Equity Position (that is, loan outstanding divided by weighted Loan-To-Value ratio, then minus the loan outstanding at the relevant time) of your portfolio erodes for 50% or above.

1. This material is for information purpose only and does not intend to constitute any offer or solicitation or advice to buy or sell any investment products. The investment decision is yours but you should not invest in "Investment Plus" unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
2. The facility is subject to the approval of Citibank (Hong Kong) Limited and/or Citibank, N.A. (as the case may be) (“the Bank”) terms and conditions.
3. Acceptance of deposits and investments as collaterals is subject to the approval of the Bank.
4. Investments are not bank deposits and are not protected under any deposit protection scheme or authority.
5. Investors should have sufficient net worth to be able to assume the risks and bear the potential losses of investing in "Investment Plus".
6. Leveraged transactions carry a high degree of risk. Investors may therefore wish to seek independent advice before making a commitment to enter into a position of "Investment Plus". In the event that investors choose not to seek independent advice, you should consider carefully whether "Investment Plus" is suitable in the light of your own investment objectives, financial position and risk profile. For more information on the collateralized investment products, investors should also read the relevant terms and conditions carefully.
7. Investors should not rely on the content of this material / website alone to make investment decisions. You should also read other relevant documents for details including the risk factors. If you have any inquiries, please seek independent professional advice prior to subscription.
8. Past performance is not indicative of future performance.
9. Investors’ investments are subject to the insolvency and credit risk of Citibank (Hong Kong) Limited and/ or Citibank, N.A. (as the case may be). There is no assurance of protection against a default by the Bank in respect of payment obligation. In case of insolvency of the Bank, you may lose your entire investment irrespective of the performance of the market or segment in which you invested and the terms of the investment.
10. Investment products are not available for US persons and might only be applicable to limited jurisdiction.
11. The facility is subject to our annual review whereupon we will re-assess based on our annual review criteria (as determined by us from time to time) which may include, but are not limited to: your (a) credit history, (b) bankruptcy check, (c) net worth and (d) customer segment (Citigold or Citigold Private Client). You may be required to provide additional information or documentary proof upon request. We may renew the facility (with the same or different facility limit and on the same or different terms) or terminate the facility.
12. The Bank reserves the rights to liquidate any or all of the eligible deposit or collateral held with the Bank and/or set off any credit balance in any of your accounts (or your joint accounts with other person(s)) against any outstanding balances and terminate Investment Plus and Portfolio Power services.
13. The Bank reserves the right of final decision upon disputes.