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Code: 48783 Visited: 87 Publish Date: Apr 25 2018 - 1:38
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IRENEX
IRENEX hosts Parallel Salam Worth $16.5 million
Tehran, Apr. 25 (SENA) - CEO of Tamadon Investment Bank revealed the terms of issuance for the next round of Standard Parallel Salam contract, worth 700 billion rials ($16.5 million), in Iran Energy Exchange to provide financing for Arian Mahtab Company, due to be issued on April 25.

Tehran, Apr. 25 (SENA) - CEO of Tamadon Investment Bank revealed the terms of issuance for the next round of Standard Parallel Salam contract, worth 700 billion rials ($16.5 million), in Iran Energy Exchange to provide financing for Arian Mahtab Company, due to be issued on April 25.

Mahmoudreza Khajenasiri called the issuance in line with the guidelines of Iran’s Resistive Economy and the motto of the current fiscal which was announced by the leader of Islamic Revolution to be “Support for Iranian Products”.

The CEO noted that the exercise price of the issuer’s call options and investors’ put options, as well as the guaranteed purchase price of the market maker in the secondary market, are calculated according to the base price of the underlying asset. “The strike price for call options and put options at the maturity is worked out by adding 19 and 18.5 percent respectively to the base price of the underlying asset in the initial public offering. The market maker also guarantees to purchase the securities in the secondary market until maturity at a daily compounded rate of 17 percent plus the base price”, he explained.

If the price of the underlying asset at the maturity is higher than the base price multiplied by 1.19, the issuer would exercise their options and buy the securities back from investors 19 percent higher than the base price i.e. the rate of return will be 19 percent. However, if the price of the underlying asset at the maturity is not 18.5 percent higher than the base price, the investors can exercise their put options and sell the securities back to the issuer at base price multiplied by 1.185, i.e. the rate of return is 18.5 percent.

The standard parallel Salam securities have no periodic coupons, and investors, at the end of one-year maturity, shall use between physical delivery or cash settlement with reference to the mentioned options. The liquidity of the securities is also guaranteed daily by the floor price offered by a market maker.

 

 

 
By: Security and Exchange News Agency (SENA)
 
 
 
 
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