Meritz Securities to sell principal-protected DLB via Toss Bank

Meritz Securities CI

South Korea’s Meritz Securities Co. announced on Tuesday that it will sell a principal-protected derivative-linked bond (DLB) via the country’s app-based lender Toss Bank until Wednesday.

A DLB is a derivative product issued based on underlying assets such as commodities, currencies, agricultural products, and interest rates.

Unlike equity-linked securities (ELS), where losses can increase depending on fluctuations in the underlying assets, DLBs are relatively safer as they invest more than 90 percent in bonds and the remainder in derivatives to generate excess returns, according to Merits Securities.

This DLB is a 3-month maturity principal-protected product based on the USD/KRW exchange rate, offering a maximum pre-tax return of 6.00 percent per annum and a minimum pre-tax return of 1.80 percent per annum.

The product pays a pre-tax return of 6.00 percent per annum and the principal, if the USD/KRW exchange rate does not increase or decrease by more than 40 won ($0.03) from the initial reference price during the three months from the issue date.

Even if the exchange rate rises or falls by more than 40 won during the period, a pre-tax return of 1.80 percent per annum and the principal will still be paid.

Customers can subscribe to the DLB by opening a “Super365” digital comprehensive investment account from Meritz Securities via the “Growing Your Funds” menu in the Toss Bank application.

This is the first time Meritz Securities has introduced financial products in collaboration with Toss Bank.

The two companies formed a partnership in May 2024 to actively use the bank’s financial platform.

“We will continue to introduce high-quality financial products based on Toss Bank’s user-friendly platform to provide a differentiated investment experience for our customers,” a Meritz Securities official said.