Commonwealth Bank launches Instalment Warrants aimed at SMSFs

Find out the two payments for the warrants.

The Commonwealth Bank has entered the ASX Warrants market commencing with the issue of Instalment Warrants. The first issue is aimed at investors, particularly SMSFs, looking to implement a gearing strategy over some of Australia’s leading shares over the medium to longer term.

The Instalments Warrants are available over 28 leading companies listed on the ASX and an Exchange-Traded Fund (ETF) with investors having a choice of gearing levels between 50 and 70 per cent.

The two payments for the Warrants are:
· First Instalment is made when purchasing the Instalment Warrant on the ASX at the current market price; and
· Completion Payment which can be made on the maturity date to allow the holder to take full legal ownership of the Security.

Moghseen Jadwat, Head of Equity Product Sales, Commonwealth Bank said Instalment Warrants provided flexible and easy access to a geared investment.

“The use of gearing is becoming increasingly popular. There are a number of reasons which could be attributed to this rise, including clarity around the borrowing rules for SMSFs, recovery in equity markets, a reduction to contributions caps, trustees looking to accelerate capital growth and a falling interest rate environment.

“The take up thus far has been pleasing, with interest from investors predominantly centered on Telstra, Suncorp and IAG. Solid results from these companies coupled with fully franked dividends make the leverage offered through Instalment Warrants appealing, particularly for SMSF investors looking for additional yield” Mr Jadwat said.

Instalment Warrants can be purchased via stockbrokers and financial advisers. To find out more information about Commonwealth Bank Instalment Warrants, please visit: www.commbank.com.au/warrants

Additionally, the Commonwealth Bank, in conjunction with the ASX, is holding a webinar session for investors to learn more about the Bank’s Instalment Warrants. This will take place on Thursday, 19 September 2013 at 12.00pm (AEST). To take part, visit: https://asxevents.webex.com/asxevents/onstage/g.php?t=a&d=662078325