Cantor Fitzgerald Oil & Gas Kick Out Note

Transcription

1 Cantor Fitzgerald Oil & Gas Kick Out Note This is a capital at risk investment product. 5 year investment term. 100% Capital returned provided Royal Dutch Shell, Exxon, BP and Total are each equal to or above 50% of their Initial Price Level on the Final Valuation Date. Potential returns of 17% per annum. 8 Potential semi-annual early maturities between years 1 to 5. Guarantor: Societe Generale. Limited Issue - Closing Date 16th October This brochure is directed at individuals, pension funds, ARF/AMRF s and corporates categorised as retail clients within the meaning of MifiD, who have received investment advice. Cantor Fitzgerald Ireland Ltd is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Ltd is a Member Firm of The Irish Stock Exchange and The London Stock Exchange..

2 Contents Investment summary. 3 Rationale for investing. 4 The 4 Stocks blue chip oil & gas companies. 5 How would the note have performed in the past? 7 Key features - how does this note work. 8 Illustrations of potential returns. 9 About Cantor Fitzgerald, Societe Generale & SG Issuer. 10 What do credit rating letters mean? 11 What risks should be considered before investing? 12 Key factors when considering if this note is right for you: 14 Questions & answers. 15 Terms & conditions. 18 Application form. 23 Investment checklist for investors. 27 R A premier global financial services firm with 33 offices worldwide. This brochure has been drafted by Cantor Fitzgerald and reviewed by Societe Generale. Societe Generale, in its capacity as Issuer and Guarantor, accepts no responsibility for the accuracy or the information set out in this brochure nor have they verified the accuracy of such information other than the information directly relating to them or to the investment payoff description. The accuracy, completeness or relevance of the information which has been drawn from external sources is not guaranteed although it is drawn from sources reasonably believed to be reliable. Subject to any applicable law, Societe Generale, Cantor Fitzgerald, nor any other provider of information or data referred to in this document, shall not assume any liability in this respect. PAGE 2

3 Investment summary The Cantor Fitzgerald oil & Gas Kick out note (the note or Investment ) is categorised as a high risk investment with a 5 year term, which may, subject to certain terms redeem early. It is categorised as high risk as certain events could occur such that after 5 years an investor could be repaid less than they invested or even lose their entire investment. Both the capital invested in the note as well as the potential investment returns are linked to the performance of 4 blue chip global oil and gas stocks Royal Dutch Shell (RDSB LN Equity), Exxon Mobil (XOM UN Equity), BP (BP/ LN Equity) and Total (FP FP Equity) together referred to as the Stocks. After the first year and every 6 months thereafter should each of the 4 Stocks be equal to or above their Initial Price Level set at the start of the investment term, then an early redemption shall occur and each investor will be repaid 100% of their initial capital plus a high fixed Bonus Payment and the product will terminate early. The potential Bonus Payments are calculated as 8.50% for every 6 month period that has elapsed after year 1 (or 17.00% per annum). If after year one or any subsequent 6 month semi-annual period any of the 4 Stocks are below their Initial Price Level, the note rolls onto the next period and the potential Bonus Payment grows by +8.50% per semi-annual period for a maximum term of 5 years. The maximum return is 85.00%. At the end of 5 years this note returns 100% of investors capital provided the least performing Stock has not fallen by 50% or more from the Initial Price Level on the Final Valuation Date of 29th october If after 5 Years, at the Final Valuation Date, any of the 4 Stocks is more than 50% below the Initial Price Level investors capital will be reduced by the full amount of the negative performance of the least performing stock. (this is known as a Knock In Event). Investor s capital is therefore at risk. Potential Maturities Are All 4 Stocks Equal to or above their Initial Price Level? Note Automatically Redeems, repays 100% of initial capital and a return of: 1 Year No NO 17.00% 1 ½ Years No NO YES 25.50% 2 Years No NO YES 34.00% 2 ½ Years No NO YES 42.50% 3 Years No NO YES 51.00% 3 ½ Years No NO YES 59.50% 4 Years No NO YES 68.00% 4 ½ Years No NO YES 76.50% 5 Years Final Valuation Date No NO YES 85.00% YES Are All 4 Stocks Greater than or Equal to 50% of the Initial Price Level? NO Knock In Event: Investment is reduced by the negative performance of the least performing stock from the Initial Price Level to the Final Price Level. YES 100% of Investors Original Capital Returned Only Minimum Investment: 10,000 Investment Term: 5 Years. Closing Date: 16th october Structure: SG Issuer Senior note, Guarantor Societe Generale Warning: If on the Final Valuation Date the Final Price Level of any of the 4 Stocks is more than 50% below its Initial Price Level you will lose 50% or more of your initial investment. Warning: If Societe Generale were to default on Senior Debt, you will lose some or all of your investment. PAGE 3

4 Rationale for investing In the period from 2011 to the middle of 2014, the price of a barrel of crude oil traded on a consistent basis at levels above $100 having traded in a range of $36.20 to $ in the previous 10 years. This rise led to increased oil production levels, along with the introduction of new sources of oil. Specifically shale oil became more competitive to produce due to these higher oil prices. The United States in particular increased their production. The strategic Saudi/oPEC policy response to the increased oil supply was to maintain production levels, leading to an increase in oil inventories globally and ultimately the recent significant price reduction 2. In addition, the prospect of the US and the EU lifting sanctions on Iran also has depressed oil price expectations. Many oil & gas companies have underperformed the stock market in recent times as the price of Brent crude oil has fallen 70% from a high of $147.5 to $43.77 currently. As you can see from the charts overleaf ExxonMobil, Royal Dutch Shell, BP and ToTAL s share prices have all declined significantly and currently trade well below their previous highs. However, at lower oil price levels the economics of producing and investing in new shale oil or deep water oil exploration becomes less profitable. Investment in new drilling, exploration and production in the US is now declining significantly 3. new wells are no longer being drilled at the same rate 3 and oil companies are spending less on exploration and becoming more focused on cost reduction. According to Wood Mackenzie the exploration industry will spend around 30% less this year 4. US shale oil fields also tend to deplete much more rapidly than more traditional oil fields, as they generally have a much shorter production lifespan 5. Some analysts believe cuts in spending and drilling, together with existing shale oil field depletion rates, are finally having an impact and significant declines in US oil production are imminent 5. Analysts believe a reduction in supply should help longer term oil prices recover, which in turn should help the share price of the larger oil and gas stocks. These stocks are currently trading significantly below their previous highs. As illustrated by the chart below, oil prices are approaching the lows of 2008 ($36.20). Global oil demand continues to be relatively robust 4. If crude oil prices can recover over coming years, even reverting to the average price of the last decade, it could be a significant catalyst for the shares of the leading global oil companies. 1) Source; The World Bank, GLOBAL ECONOMIC PROSPECTS, January ) Source: International Energy Agency, Oil Market Report, June ) Source: Cantor Fitzgerald Rig Count 3rd July ) Source: Dr Andrew Latham, VP Exploration Research for Wood Mackenzie 25th March ) Source; Societe Generale, Cross Asset Research June Brent crude oil $ price per barrel last 10 years: *Source: Bloomberg SX5E Index estimates 12th August Warning: Past performance is not a reliable guide to future performance. The value of investments may go down as well as up. PAGE 4

5 The 4 Stocks - blue chip oil & gas companies This notes returns are linked to the performance of Royal Dutch Shell, Exxon Mobil, Total and BP. There is a positive investment rationale for choosing these 4 Stocks. While the stock price levels are to be set as of the Initial Valuation Date of 29th october 2015, we note by way of example the current 50% Barrier Level for each of the stocks would be at a level not breached by any of the 4 Stocks at any time over the last 10 years despite a major stock market and an oil price correction over the last decade. However, investors should be aware that past performances are not a reliable indicator of future performances. Royal Dutch Shell Last 10 Years Exxon Mobil $ Last 10 Years Indicative 50% Barrier Level in Red Indicative 50% Barrier Level in Red Royal Dutch Shell (RDSB LN Equity) Current 50% Barrier Level Exxon (XOM US Equity) Current 50% Barrier Level Aug/2005 Mar/2006 Oct/2006 May/ Dec/2007 Jul/2008 Feb/2009 Sep/2009 Apr/ Nov/ Jun/2011 Jan/ Aug/ Mar/2013 Oct/2013 May/ Dec/2014 Jul/ Aug/2005 Mar/2006 Oct/2006 May/2007 Dec/2007 Jul/2008 Feb/2009 Sep/2009 Apr/2010 N ov/2010 Nov/2010 Jun/2011 Jan/2012 Aug/2012 Mar/2013 Oct/2013 May/2014 Dec/2014 Jul/2015 Total Last 10 Years Indicative 50% Barrier Level in Red BP Last 10 Years Indicative 50% Barrier Level in Red Aug/2005 Mar/2006 Oct/2006 May/2007 D ec/2007 Dec/2007 Jul/2008 Feb/2009 Sep/2009 Apr/2010 Total (FP FP Equity) Current 50% Barrier Level Nov/2010 Jun/2011 Jan/2012 Aug/2012 Mar/2013 Oct/2013 May/2014 Dec/2014 Ju l/2015 Jul/ Aug/2005 Mar/2006 Oct/2006 May/2007 Dec/2007 Jul/2008 BP (BP/ LN Equity) Current 50% Barrier Level Feb/2009 Sep/2009 Apr/ Nov/ Jun/2011 Jan/ Aug/ Mar/2013 Oct/2013 May/2014 Dec/2014 Jul/2015 Data Source: Bloomberg 21/08/2015. Warning: Past performance is not a reliable guide to future performance. The value of investments may go down as well as up. PAGE 5

6 The 4 Stocks - blue chip oil & gas companies Royal Dutch Shell Royal Dutch Shell PLC, (RDSB Ln Equity) explores for, produces, and refines petroleum. The Company produces fuels, chemicals, and lubricants. Shell is geographically diversified and owns and operates gasoline filling stations worldwide. Despite its focus on higher margin production, Royal Dutch Shell is trading at a discount to the overall stock market with a price earnings ratio of 10.2 times 2016 earnings estimates (S&P 500 trading on times earnings, FTSE 100 trading on times 2016 earnings estimates) 1. Assuming the BG Group acquisition will proceed as planned, the restructuring possibilities and potential cost savings for Shell are substantial 2. Shell has a market capitalisation of 103 billion pounds 1. Exxon Mobil Corp. Exxon Mobil (XoM Un Equity) is the world's largest oil company. Exxon Mobil Corp operates petroleum and petrochemicals businesses on a worldwide basis. The Company's globally diversified operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. Exxon Mobil also manufactures and markets fuels, lubricants, and chemicals. Exxon shares are currently trading at a slight discount to the wider market at 14.2 times 2016 earnings (S&P 500 trading on times earnings). Exxon has a market capitalisation of $346 billion 1. BP Plc. BP plc (BP/ Ln Equity) is an oil and petrochemicals company. The Company explores for and produces oil and natural gas, refines, markets, and supplies petroleum products, generates solar energy, and manufactures and markets chemicals. BP is trading at a discount to the market at times 2016 earnings estimates (FTSE 100 trading on times 2016 earnings estimates)1. Some analysts continue to see upside to consensus earnings from additional cost savings progress, and potential valuation upside from greater clarity on the 2010 Macondo Gulf of Mexico oil Spill. The July 2015 settlement should draw a line under most of the outstanding Macondo litigation 2. TOTAL SA Total SA (FP FP Equity) explores for, produces, refines, transports, and markets oil and natural gas. The Company also operates a chemical division which produces poly propylene, polyethylene, polystyrene, rubber, paint, ink, adhesives, and resins. Total operates gasoline filling stations in Europe, the United States, and Africa. The stock is trading at 10.4 times 2016 earnings estimates 1. Following some years of considerable change, Total may be well positioned for growth and recent transactions have augmented its position. These acquisitions largely being funded by the sale of noncore assets whilst in the downstream restructuring and divestments offer scope for improvement. Increased focus on exploration also offers scope for resource capture and with it greater confidence in the company's medium term outlook Source: Bloomberg 10/07/ Source Financial Times, July Source: Deutsche Bank, European Integrated oils. March 2014 Warning: Past performance is not a reliable guide to future performance. The value of investments may go down as well as up. PAGE 6

7 How would the note have performed in the past? Using all available daily price data (from 2nd october 1989 to the 14th July 2015) permitted the analysis of 5,238 individual 5 year rolling periods, based on 20 years of potential product maturities. The relevant closing stock price levels for each of the the 4 Stocks determined the 50% Barrier Levels which were set for each stock for each one of the 5,238 individual dates. This is simulated past performance, using actal price data, as if the product had existed during this period. Historical backtesting produced the following results: An equivalent note would have successfully matured early or after 5 years and Kicked out with a gain for investors 75.45% of the time % of the time, the note would have returned only 100% of the initially invested capital at maturity, generating no additional Bonus Payments. There was a 40.03% probability of the note kicking out or maturing after 1 year with a 17% return, thus making the 1 year maturity the most frequent historical outcome. The average investment term was 2.48 years. The note would have continued to the final maturity date in 25.85% of the cases. only 1.3% of the time would the note would have returned the maximum Bonus Payment of 85% at maturity. There was no instance when the note would have incurred a capital loss or a Knock In Event. 45% 40% Historic Probability of Kick Outs & Returns Returns 76.50% 85.00% 90% 80% 35% 40.0% 68.00% 70% 59.50% 30% 60% 51.00% 25% 42.50% 50% 20% 34.00% 21.8% 40% 15% 25.50% 30% 10% 5% 0% 17.00% 11.3% 8.6% 5.3% 4.8% 0.9% 1.2% 3.1% 0.00% 3.0% 0.0% Year 1 Year 1.5 Year 2 Year 2.5 Year 3 Year 3.5 Year 4 Year 4.5 Year 5 Year 5 Loss 20% 10% 0% Source: Bloomberg and SG Engineering 14/07/2015. While the historic back tested returns suggest no capital losses would have occurred over the 20 years, we would caution investors that the capital invested is at risk of total loss, and past performance is not a reliable guide to future performance. Warning: These figures are estimates only. Simulated past performance is not a reliable guide to future performance. PAGE 7

8 Key features - how does this note work? Automatic Early Redemption: This 5 year note may mature after any of the 8 Semi-Annual Valuation Dates which occur every 6 months from years 1 to 5. If on any one of the Semi-Annual Valuation Dates the closing price level of each of the 4 Stocks is equal to or above the Initial Price Levels recorded on the Initial Valuation Date (29th october 2015), the note will automatically redeem and you will receive 100% of your initial investment back plus a return equivalent to 17% per annum (not compounded) as detailed in the table below. If the price level of any one of the 4 Stocks is below its Initial Price Level, the note will continue on to the next Semi-Annual Valuation Date. Maturity in 5 Years: If the note has not automatically redeemed early and continues for 5 years to the Final Valuation Date (29th october 2020) and the closing price level of each of the 4 Stocks is equal to or higher than its Initial price Level (29th october 2015) investors receive back 100% of their initial investment plus a 85.00% gross return. If on the Final Valuation Date of 29th october 2020 (that single day only) the Final Price Level of the least performing stock is below the Initial Price Level (29th october 2015), but is above the 50% Barrier Level then investors will receive back 100% of their initial investment only and will receive no investment return. If on the Final Valuation Date of 29th October 2020 (on that single day only) the Final Price Level of the least performing stock is below the 50% Barrier Level then investors capital will be reduced by the full amount the least performing stock has fallen from the Initial Price Level to the Final Price Level. Investors capital is at risk of total loss. Semi-annual Valuation Dates (Potential Early Redemption Dates) Potential % Return if Maturing Based on an Investment of 10,000 Including Original Capital 31st october % 11, nd May % 12, th october % 13, th April % 14, th october % 15, th April % 15, th october % 16, th April % 17, Final Valuation Date 29th October 2020 Potential % Return if Maturing Based on an Investment of 10,000 Including Original Capital If least performing stock is equal to or above the Initial Price Level If least performing stock is down 0%-50% from Initial Price Level If least performing stock is down % - 100% from Initial Price Level 85.0% 18, (85% Maximum return) 0% 10, % to % 4, to 0.00 Initial Price Level: The price level of each of the 4 Stocks is recorded on the 29th october 2015 (closing price). Final Price Level: The final price level of each of the 4 Stocks is recorded on the 29th october 2020 (closing price). 50% Barrier Level: 50% of the Initial Price Level of each of the 4 Stocks is recorded (closing price) on the 29th october Semi Annual Valuation Dates: 31st october 2016, 2nd May 2017, 30th october 2017, 30th April 2018, 29th october 2018, 29th April 2019, 29th october 2019, 29th April 2020, 29th october Final Valuation Date: 29th october Warning: These figures are estimates only. The value of investments may go down as well as up. Structure: This Investment is in the form of a securities based note issued by SG Issuer (hereafter referred to as the Issuer ), a 100% owned subsidiary of Societe Generale. The return of your initial capital invested in the note, as well as the Bonus Payments on the note, will be dependent on the solvency of Societe Generale. This investment is in the form of a Senior note (a type of senior corporate Bond) ( Bond ) issued by the A rated Societe Generale. Senior debt investors have traditionally ranked above subordinated debt and pari passu (the same) with depositors in a bankruptcy. PAGE 8

9 Illustrations of potential returns ( 10,000 invested) Time Invested Performance of Stocks Investment Return Capital Returned Investment Growth Total Return 1 Year All stocks are equal to or above their Initial Price Level, leading to early redemption % 10, , , Years & 6 Months All stocks are equal to or above their Initial Price Level, leading to early redemption % 10, , , Years All stocks are equal to or above their Initial Price Level, leading to early redemption % 10, , , Years Least performing stock is a 49.9% below its Initial Price Level. 0.00% 10, , Years Least performing stock is a 70% below its Initial Price Level. original capital invested is reduced by 70%. 0.00% 3, , Counterparty Risk: SG Issuer will act as the Issuer of the Cantor Fitzgerald oil & Gas note and is a 100% owned subsidiary of Societe Generale. Investors will have exposure to the senior counterparty risk of Societe Generale as Issuer (SG issuer) and Guarantor. If a counterparty is unable to fulfil its contractual obligations to return funds to an investor this is known as a default. In the case of a senior default by SG Issuer or Societe Generale investors would receive the Recovery Value of the note. Please see pages for further details on credit risk and the independent credit ratings of Societe Generale as the Guarantor of the note. Valuation Risk: The value of this note may, during its lifetime, be lower than the amount of the capital invested. As a consequence, the investor may lose part, or all, of the invested amount if they choose to sell their investment before the Final Maturity Date. Market Risk: Before the Final Maturity Date, the value of note is also subject to market risk, meaning it may at any time be subject to significant price movement, which may in certain cases lead to the loss of the entire amount invested. (Please see the What risks should be considered before investing? section on pages for further details). Warning: If on the Final Valuation Date the Final Price Level of any of the 4 Stocks is more than 50% below its Initial Price Level you will lose 50% or more of your initial investment. Warning: If Societe Generale were to default on Senior Debt, you will lose some or all of your investment. PAGE 9

10 About Societe Generale and SG Issuer Societe Generale is one of the largest European financial services groups with more than 148,000 employees in 76 different countries. Societe Generale s market capitalisation as of the 2nd January 2015 was 28.6 billion It is authorised and supervised by the Autorité de Contrôle Prudentiel et de résolution (the French Prudential Control and resolution Authority) and subject to limited regulation by the Financial Conduct Authority and Prudential regulation Authority in the UK. Societe Generale Credit ratings as of March 2015 are in the table below: *Credit Rating Fitch Moody s Standard & Poors DBRS Societe Generale A (stable) A2 (stable) A (negative) AA (Low) SG Issuer is a 100% owned subsidiary of Societe Generale and will act as Issuer of the Cantor Fitzgerald oil & Gas Kick out note. The return of your invested capital and any growth due is dependent on Societe Generale paying back the amounts due under its obligations on the note. Consequently, the investor bears a credit risk on the Guarantor. This is called Counterparty Risk or Credit Risk. SG Issuer is the flagship issuer of Societe Generale with over 30 billion EUR in outstanding notes. *Source: Societe Generale, as of July Warning: If SG Issuer or Societe Generale were to default, you will lose some or all of your investment. About Cantor Fitzgerald Cantor Fitzgerald LP was originally established in 1945 and today is one of the world s preeminent investment banks, with operations in every major financial centre in 35 locations across the Americas, Europe, Asia/Pacific and the Middle East. Cantor Fitzgerald is recognized for its strengths in fixed income and equity capital markets, investment banking, prime brokerage, and commercial real estate finance. Cantor Equity Capital Markets, established in 1965, has grown to become one of the largest and most recognized participants in the global equities arena. Cantor Fitzgerald was recently named as best broker dealer at the 2014 Global Capital awards in new York. Cantor Fitzgerald is one of 22 primary dealers authorized to trade U.S. government securities with The Federal Reserve Bank of new York. Cantor Fitzgerald and its affiliates execute over $200 trillion in notional financial transactions annually. Cantor Fitzgerald services more than 7,000 institutional clients. Cantor s broad portfolio of businesses also includes CCRE, newmark Grubb Knight Frank, Prime Brokerage, Cantor Index, Cantor Insurance Group, and other businesses. Source: Cantor Fitzgerald, July PAGE 10

11 What do the credit rating letters mean? A credit rating is an evaluation of the credit worthiness of a debtor. The evaluation is made by a credit rating agency of the debtor's ability to pay back the debt and the likelihood of default. The credit rating represents the credit rating agency's evaluation of qualitative and quantitative information for a company or government; including information obtained by the credit rating agencies' analysts. Each credit ratings agency uses its own individual methodology for measuring creditworthiness and these can change with changes in the economy, business environment or when more narrowly focused on issues affecting a specific industry, country or individual debt issue. Credit ratings are used by bond buyers to determine the likelihood that the issuer will repay its bond obligations. The table below defines what the credit ratings from each agency actually mean. CREDIT RISK STANDARD & POORS FITCH MOODYS DBRS Investment grade: Highest Quality AAA AAA Aaa AAA High Quality (Very Strong) AA AA Aa AA Upper Medium Grade (Strong) A A A A Medium Grade BBB BBB Baa BBB Non-investment grade: Lower Medium Grade BB BB Ba BB (Somewhat Speculative) Low Grade (Speculative) B B B B Poor Quality (May Default) CCC CCC Caa CCC Most Speculative CC CC Ca CC no Interest Being Paid or Bankruptcy C C C C In Default D D D D Warning: If SG Issuer or Societe Generale were to default, you will lose some or all of your investment. PAGE 11

12 What risks should be considered before investing? Counterparty risk on Societe Generale as the Issuer and Guarantor of the Note: By investing in the notes you take a credit risk to SG Issuer and Societe Generale, SG Issuer in its capacity as issuer and Societe Generale as Guarantor. In the case of a default by SG Issuer or Societe Generale, investors have a senior claim to Societe Generale on the residual amount (if any) up to the nominal value of the note. Return of capital at Final Maturity Date: 100% of investors capital is returned at the Final Maturity Date if none of the 4 Stocks has fallen by more than 50% from its Initial Price Level, on the Final Valuation Date. otherwise investors capital will be reduced by the negative performance of the least performing stock (please see example return on page 9). Warning: Your capital is at risk; you may lose some or all of the money you invest. Market risks: Equity and oil and Gas markets are speculative in nature and future prices may trade lower than current prices. A U.S., European or global economic recession may result in stock or energy markets weakening significantly. Global geo-political or climatic events can cause a disruption in supply or ownership of oil and gas assets. Corporate earnings could fall, dividend levels could decrease. Credit Ratings may change. Economic policies, taxation policy or tax rates may change. Inflation may occur over the duration of your Investment and if the returns, if any, on your Investment are lower than the rate of inflation this will reduce what you could buy in the future. Investors may not receive any investment return so this investment may result in an opportunity cost where other assets generate a higher return on investment. The notes may be subject to significant price movement at any time before maturity, which may in certain cases lead to the loss of your entire capital invested. Warning: If any of the 4 Stocks is below 50% of its Initial Price Level on the Final Valuation Date, you will lose 50% or more of your initial investment. Volatility risk: oil and Gas markets can be particularly volatile and can be influenced by global economic growth, geo political risks, wars, economic sanctions, currency exchange rate movements, consumption patterns, technological developments, inventory levels, disruptions to supply or demand and also speculative trading. Liquidity risk: Societe Generale aims to provide a secondary market for the note during the investment term. However, certain exceptional market circumstances may have a negative effect on the liquidity of the notes, and even render the notes entirely illiquid, which may make it impossible to sell the notes before the Final Maturity Date and result in the partial or total loss of your initial capital invested. It is envisaged that investors will hold the note for the full 5 year term and all investors should consider the term before investing. No other liquid market: SG Issuer will be the sole provider of a secondary market for the notes. There is no other liquid market on which these notes can be easily traded and this may have a material adverse effect on the price at which the notes may be sold. As a consequence, you may lose part or all of your initial capital invested if you redeem the investment early. Warning: If you invest in this product you may not have access to your money for 5 years. No recourse to any compensation scheme (or similar): In the event of a default of SG Issuer or Societe Generale your investment will not be covered by any Compensation Schemes. PAGE 12

13 Hedging risk: If the volume of funds raised for the note is insufficient to proceed, or exceeds any pre hedged amounts, or in the event of extreme market volatility, Cantor Fitzgerald Ireland Limited, at its sole discretion and without notice, may withdraw the product, or cease to accept applications for it. After the receipt of a completed application form or an instruction to invest in the note, any investor or potential investor who then subsequently decides not to proceed with, or to withdraw from the investment for any reason whatsoever, either before or after the Issue date of 5th november 2015, may then be entirely liable for any hedging costs, breakage costs or bid offer spreads which were incurred by Cantor Fitzgerald in unwinding the position for the investor. Risk regarding deductions during the life of the Notes: Deductions for charges and expenses are not made uniformly throughout the life of the notes, but are loaded disproportionately onto the early period. If an investor sells the notes prior to the end of the 5 Year term, the practice of front-end loading will impact on the amount of money that the investor receives. The investor may not get back the full amount they invested. Early Redemption Risk: Prior to Maturity, the value of the note may be lower than the original investment amount. As a consequence, the investor may lose part or the entire invested amount if the note is sold before the Final Maturity Date. Warning: If you cash in your investment before the Final Maturity Date you may lose some or all of the money you invest. Investors should refer to the prospectus and final terms associated to this note before making any investment in the product. It is recommended that investors read carefully the risk factors section of the Note s prospectus. The prospectus is available on the website and/or could be obtained free of charge from Societe Generale at the address stated in this document or from Cantor Fitzgerald Ireland Limited, upon request. Warning: The value of your investment can go down as well as up. PAGE 13

14 Key factors when considering if this note is right for you We recommend that you consider these important points and consult your Financial Adviser on the suitability of this note as an investment option for you. This brochure is for information purposes only and does not constitute investment advice. You are looking for an investment note with high return potential but with an understanding of or advice in regard of the resulting risks. You understand that higher returns normally arise from higher risks. You are an Individual, ARF/AMRF, Pension Fund or a Corporate with a minimum of 10,000 to invest. You have read and understand the risks associated with this product as detailed on page 12 & 13. You are seeking capital growth and are prepared to put part or all of your capital at risk to achieve this. You understand your funds will be invested for a period of 5 years and you are comfortable to invest for this time period. You understand that if the least performing stock has fallen by more than 50% on the Final Valuation Date you will lose all or some of your capital and will receive no investment return. You have sufficient cash reserves to meet your short to medium term needs as you may not have access to your funds for the 5 year investment period. You are prepared to risk some or all of your Investment if SG Issuer or Societe Generale experiences a default on senior debt during the investment term. You are interested in an investment linked to blue chip leading global oil and gas companies but you understand that your investment will not provide you with 100% exposure to the performance of the 4 Stocks. Warning: If SG Issuer or Societe Generale were to default, you will lose some or all of your investment. PAGE 14

15 Questions & Answers How does The Oil & Gas Kick Out Note work? 1. The parties involved in the Note are as follows; The Distributor is: Cantor Fitzgerald Ireland Limited, 75 St. Stephen s Green, Dublin 2. Cantor Fitzgerald Ireland Limited is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Limited is a member firm of the London Stock Exchange and the Irish Stock Exchange. The Note Issuer is: SG Issuer (Luxembourg) a 100% owned subsidiary of Societe Generale. The Investment Return at maturity or early redemption is provided by: Societe Generale. 2. Brief Description of the Benefits of the Note: The Cantor Fitzgerald oil & Gas Kick out note commences on the Start Date (29th october 2015) and provides Investors with high potential returns of 17.00% per annum (not compounded) and the potential to automatically redeem on the 1st anniversary, and semi-annually thereafter during the 5 year investment term. This investment is based on the performance of 4 blue chip oil & gas companies; Royal Dutch Shell (RDSB Ln Equity), Exxon Mobil (XoM Un Equity), BP (BP/ Ln Equity) and ToTAL (FP FP Equity). The note automatically redeems early with 100% of investors initial capital together with a high fixed Bonus payment if each of the 4 Stocks are equal to or above their Initial Price Levels (set at the start of note on the 29th october 2015) on any Semi-Annual Valuation Date at or after year 1 during the 5 year investment term. If any of the 4 Stocks is below its Initial Price Levels on any of the Semi- Annual Valuation Dates the Investment rolls on to the next period and the potential Bonus payable grows by +8.50% (17.00% per annum non compounded). The Investment term: 5 years (the note may redeem early between years 1 and 5). Minimum investment amount: 10,000. Underlying Strategy of the Investment: The possible appreciation of the 4 Stocks. Initial Price Level: In respect of the 4 Stocks Royal Dutch Shell (RDSB Ln Equity), Exxon Mobil (XoM Un Equity), BP (BP/ Ln Equity) and ToTAL (FP FP Equity) the Initial Price Level is the closing price of each of the 4 Stocks as quoted on the relevant exchange as determined by or on behalf of the Calculation Agent on the Start Date 29th october Details of these levels will be provided in a confirmation letter to be sent to each Investor after the start date. Final Price Level: In respect of the 4 blue chip oil & gas stocks Royal Dutch Shell (RDSB Ln Equity), Exxon Mobil (XoM Un Equity), BP (BP/ Ln Equity) and ToTAL (FP FP Equity) the Final Price Level is the closing price of each of the 4 Stocks as quoted on the relevant exchange as determined by or on behalf of the Calculation Agent on the Final Valuation Date 29th october Details of these levels will be provided in a letter to be sent to each Investor after the maturity date. If the performance of any of the 4 Stocks is negative at the Final Valuation Date, and the note was not redeemed early, no investment return is payable, and investors capital may be entirely at risk should any stock decline by more than 50% from the Initial Price Level at the Final Valuation Date. If all 4 Stocks are equal to or above their Initial Price Level the absolute maximum return that may be earned on the Investment is 85.00%. 3. Dividends: no dividends are payable to investors from the underlying stocks. 4. Currency Risk: This investment and any returns are in Euro and will not be subject to any currency risk. 5. This investment is NOT Capital Protected: At maturity, Investors will receive a 100% return of capital provided no stock is below 50% of its Initial Price Level on the Final Valuation Date. If any stock is more than 50% below its Initial Price Level at the Final Valuation Date (a Knock In Event) you will lose some or all of your initial capital invested in the note. If after 5 Years, at the Final Valuation Date, any of the 4 Stocks is more than 50% below the Initial Price Level investors capital will be reduced by the full amount of the negative performance of the least performing stock. The return if any, and investor s capital are subject to the credit risk of the Issuer. If SG Issuer or Societe Generale defaults on Senior Debt you will lose some or even all of the capital invested and any unpaid returns. Should you surrender your note early, you will receive the price offered by the Issuer on the secondary market for the Securities less any encashment costs, which may be significantly less than you originally invested. PAGE 15

16 6. Risk to Returns: The Returns on the note are dependent on the performance of the 4 Stocks; Royal Dutch Shell (RDSB Ln Equity), Exxon Mobil (XoM Un Equity), BP (BP/ Ln Equity) and ToTAL (FP FP Equity) which are not certain. There is no guarantee that the Investment will achieve the estimated or anticipated returns illustrated in this document, that it will achieve the returns achieved in the past or that it will achieve any investment return at all. This Investment is in the form of a Senior note issued by SG Issuer. Senior debt investors have traditionally ranked above subordinated debt and pari passu (the same) with depositors in a bankruptcy. If Societe Generale defaults on Senior Debt you will lose some or even all of the capital invested and any returns. Where does my investment in the Note go? Your investment will be initially lodged to your account with Cantor Fitzgerald Ireland Ltd. and your funds will be held by our custodian Pershing Securities International a subsidiary company of the AA- Bank of new York Mellon in an individual account in the name of the investor. Before the Issue Date the funds will be transferred to SG Issuer and will be held by Societe Generale until the Final Maturity or relevant Early Redemption Date. Societe Generale will provide a financial derivative to provide the investment return. At the maturity date funds will be transferred back to your account in Cantor Fitzgerald Ireland Ltd. and will be held in custody for investors by Pershing Securities International. We will advise you of the amount of funds received and request your written instructions at that time. What are the fees and charges? 100% of your investment is allocated to the note. Cantor Fitzgerald Ireland Limited receives a fee from SG Issuer for the design, marketing, administration, literature production & distribution of this note. Based on indicative pricing received between 10th July 2015 and 1st September 2015, the indicative fee to Cantor Fitzgerald Ireland Limited will be 4.90% of the investment amount. This fee is built into the note terms and is not taken from your original investment amount. If the note is encashed early by you before the scheduled maturity date a 1% early encashment fee applies. If you have invested through an authorised investment intermediary appointed by Cantor Fitzgerald Ireland Limited they will be paid a fee of 2.75% of the amount you invest from the overall fee received by Cantor Fitzgerald. This fee is paid for distributing the product. These fees are not taken from your original investment amount. If the volume of funds raised for the product is insufficient to proceed, or exceeds any pre hedged amounts, or in the event of extreme market volatility, Cantor Fitzgerald Ireland Limited at its sole discretion and without notice, may withdraw the note or close the note to new investments before the quoted closing date. An account fee of 120 p.a. + VAT will be applied to your account (not applicable to Friends First pension investments where standard management fees apply). This is to cover the custody of your investment and administration on your account for the term of your investment. This fee will be accrued on an annual basis on the anniversary of the start date and will be deducted from your maturity proceeds at either the final maturity date or early redemption date as applicable. Where the note matures at a half yearly early redemption date, the fee due to Cantor will be deducted on a pro rata basis for that year. Should your investment reach the full maturity date and only return your capital or where a loss to your capital occurs, Cantor Fitzgerald will meet the cost of any accrued fees and you will not be charged. Do I have access to my investment? It is intended that your investment in the note will be held for the full 5 year term (or earlier if an early redemption event is achieved). If you need to cash in your investment early, SG Issuer will ensure, under normal market conditions, a daily secondary market with a 1% Bid / offer spread. However neither Cantor Fitzgerald nor SG Issuer can guarantee what its value will be at that point and it may be less than you originally invested. We will pay you the value of your investment in accordance with the prevailing market rate at that time, less any associated selling costs. Cantor Fitzgerald may impose a fee of up to 1% to process any early encashment of your investment where such early encashment is possible. We would need to receive an instruction from you in writing to process any possible early encashment of your investment. In the case of joint accounts, instructions from all parties will be required. Any final return on the note will depend on the performance of the 4 oil & gas stocks. What happens if I die before the Note matures? Single applicants: In the event of your death, the note will be administered in accordance with the instructions of your personal representatives, and/or as part of probate/administration. Joint applicants: For notes invested in the name of husband and wife, the note will transfer automatically to the name of the surviving partner. For other joint applications, the note will be administered in accordance with the instructions of your personal representatives, and/or as part of probate/administration. Any instruction to encash the note by a personal representative will be treated in the same manner as an instruction by the original investor. PAGE 16

17 What about tax? Your Investment in The note is held in the form of a note issued by SG Issuer. Based on our understanding of rates of tax, current legislation, regulations and practice, we expect the final bonus returns from this note may be subject to Capital Gains Tax (CGT). Your relevant capital sum and any growth will be returned gross of CGT, currently the rate of CGT is 33%. Tax rates and legislation could change in the future and may be applied retrospectively. This is a general guide only. It is important that you consult your tax advisers concerning possible taxation and other consequences of making an investment in the note. Cantor Fitzgerald Ireland Limited are not tax advisors and are not offering any tax advice on this product. Any gains made from the investment by non-taxable investors may be free of tax. The taxation of any gains on investments in the note made by companies, partnerships or other businesses will depend on the tax position of the organisation. If you are unsure of your tax status or require further information, please contact your local tax office and/or refer to the Revenue Commissioners website, Cantor Fitzgerald Ireland Ltd. do not provide tax advice. Independent tax advice should be sought by each investor. Warning: This is based on our understanding of current tax law and practice which is subject to change without notice in both Ireland and the UK. This information represents our understanding of the taxation treatment of the Note but does not constitute tax advice and investors should not place any reliance on the content herein. Investors should satisfy themselves independently of the taxation treatment of the Note, in relation to Revenue reporting requirements and implications for nondisclosure in their own personal circumstances. How can I invest? The Cantor Fitzgerald oil & Gas Kick out note is only available for a limited period until 16th october 2015 or earlier if fully subscribed. If you are not an existing customer you will need to open an account with Cantor Fitzgerald and provide us with the documentation as per the Checklist at the back of this brochure, together with a cheque made payable to Cantor Fitzgerald Ireland Ltd. or funds transfer to the bank details on the application form, ensuring to give your Cantor Fitzgerald account number and your name as a reference with the fund transfer. This note is available to Individuals, Pension Funds, ARF s/amrf s and Corporates. Before investing in this product please contact either your broker in Cantor Fitzgerald or your financial advisor to ensure this product meets your financial needs and is suitable to your risk profile. How can I obtain a copy of the prospectus relating to the securities? You can obtain a copy of the base prospectus relating to the securities and any further information about the investment product free of charge on request from Cantor Fitzgerald Ireland Limited. You will be also be able to access the prospectus on the following website: Who should invest in The Cantor Fitzgerald Oil & Gas Kick Out Note? This is categorised as a high risk product and is designed for investors who want to invest in large market capitalisation blue chip global oil & gas companies as an alternative to holding the equities directly. The note is designed for investors who do not require access to their money for 5 years. The note is designed for Individuals, ARF/AMRF s, Pension funds or Corporates with at least 10,000 to invest and who understand the risks involved in investing in a capital at risk product. How will you know how your investment is performing? Cantor Fitzgerald Ireland Limited and/or your advisor will write to you each year providing an indication of the performance to date of your Investment against your original entry level. What happens when the Note matures? Cantor Fitzgerald Ireland Limited, and/or your advisor will endeavour to contact you at least 30 days prior to the Final Maturity Date of the Investment. on the applicable Payment Date, or the Maturity Date, funds representing the appropriate return of your capital, together with any Investment return due, will be transferred back to your account in Cantor Fitzgerald and will be held in custody for investors by Pershing Securities International, a subsidiary company of the AA rated Bank of new York Mellon, in an individual account in your name. We will advise you of the amount of funds received and request your instructions at that time. What risks are attached to the Note? Please refer to pages 12 & 13 What risks should be considered before investing? It is recommended that investors read carefully the risk factors section of the note s prospectus. PAGE 17

18 Terms and Conditions 1. Definitions: The following definitions apply to these Terms and Conditions and the contents of this brochure: Account means a Cantor Fitzgerald Ireland Limited Client Account in which your funds are administered for the term of your investment (or in the name of the investing life company for pension investors via a Self Directed or Self Invested Insured Plan). ARF means Approved Retirement Fund. AMRF means Approved Minimum Retirement Fund. Automatic Early Redemption Event is deemed to have occurred, as determined by the Calculation Agent, if on a Semi-Annual Valuation Date at or after year 1, all 4 Stocks are equal to or above the Initial Price Level. Bonus Payment: 8.5% per semi-annual period elapsed or 17.0% per annum non-compounded. Calculation Agent: Societe Generale. Cantor Fitzgerald Ireland Limited means Cantor Fitzgerald Ireland Limited its successors, assigns and transferees. Cantor Fitzgerald Ireland Limited is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Limited is a member of the Irish Stock Exchange and the London Stock Exchange. Change in law means any change in any law or regulation (including tax law) occurs or there is a change in the interpretation by the courts or regulator or similar authority of any such law that, in the view of the Issuer and Cantor Fitzgerald Ireland Limited, would make it illegal for the Issuer to hold hedge positions related to the note. Closing Date means 16th october Currency: EUR; Derivative Counterparty: Societe Generale. Distributor: Cantor Fitzgerald Ireland Limited ("Cantor Fitzgerald Ireland") and its successors, transferees and assigns. Cantor Fitzgerald Ireland Limited is a Cantor Fitzgerald Company. Cantor Fitzgerald Ireland Limited Ltd is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Limited is a member firm of the London Stock Exchange and the Irish Stock Exchange. Final Maturity Date means 12th november Final Valuation Date: 29th october Financial Advisor means Cantor Fitzgerald Ireland Limited or a regulated firm that is authorised by the Central Bank of Ireland to give investment advice and which is an appointed agent of Cantor Fitzgerald Ireland Limited. Guarantor: Societe Generale (rated A / A2 / A). Hedging Disruption Event means any event which, in the Issuer s reasonable opinion, would make it illegal or commercially unfeasible for the Issuer to continue to hedge its obligations in relation to the note. Initial Valuation Date : 29th october Investment Amount : Shall mean the amount invested in The Cantor Fitzgerald oil & Gas Kick out note. Investment Return shall mean the investment return payable in respect of the note in accordance with Clause 5. 'ISIN Code': XS Issuer : SG Issuer. Issue Date : 5th november Knock-In Event : If, on the Final Valuation Date, the Final Price Level of the least performing of the 4 Stocks is below 50% of its Initial Price Level a Knock-In Event will have occurred and investors capital will be reduced by the full amount the least performing stock has fallen from the Initial Price Level to the Final Price level, and no investment return will be payable. Listing: This note will be listed on the Luxembourg Stock Exchange. Market Disruption Event means any of: (i) a disruption or suspension of, or limitation on, the operations of any of the parties or entities connected with the provision of services affecting the note, for any reason whatsoever; (ii) any material modification of any of the 4 Stocks for any reason whatsoever which affects the 4 Stocks or the value of any unit of the 4 Stocks including, without limitation: a split, consolidation or reclassification of the units, or a distribution in the form of dividends which does not comply with the usual dividend policy of the 4 Stocks, or any other similar event which requires an adjustment; (iii) the calculation and/or publication of the 4 Stocks is taken over by another person, or is replaced by a successor asset, or an error in the level of the asset is discovered for any reason whatsoever or the asset ceases to exist. Note Means The Cantor Fitzgerald oil & Gas Kick out note. Recovery Value The amount of principal and accrued interest on a debt instrument that is in default which can be recovered when it emerges from a default or bankruptcy. Return means the gross return calculated in accordance with Clause 5. 'Senior Debt': Borrowed money that a company must repay first if it goes out of business. If a company goes bankrupt, senior debt holders are most likely to be repaid, followed by junior debt holders, preferred stock holders and common stock holders. Settlement Price 4 Stocks reference price on 29th october Start Date means 29th october Strike Price means the Initial Price Level of the 4 Stocks Closing Prices on the Start Date. PAGE 18