Index-Linked Notes With Periodic Coupons Subject To A Triggering Event

Abstract

Index-linked notes with periodic coupons subject to a triggering event, and accompanying methods, are described herein. In some instances, exemplary notes allow a purchaser to purchase a note and receive periodic coupons returned on the note as long as a triggering event does not occur. Assuming that the triggering event does not occur, the purchaser may receive these coupons until the note reaches maturity. Payment of the periodic coupons may cease, however, when a triggering event (e.g., the purchaser's death) does occur. In addition, the amount of the periodic coupons are tied in some manner to a financial index, such as the Bloomberg index, the S&P 500, or the like.

1 . One or more computer-readable media storing computer-executable instructions that, when executed on one or more processors, perform acts comprising:
 periodically determining whether a specified triggering event has occurred, wherein the triggering event comprises a death of a purchaser of an index-linked note or a death of a reference person;   responsive to determining that the specified triggering event has occurred, ceasing payment of periodic coupons associated with the index-linked note to the purchaser;   responsive to determining that the specified triggering event has not occurred, calculating a coupon amount for payment to the purchaser of the index-linked note for a corresponding period, wherein the coupon amount is equal to a product of:
 a principal of the index-linked note and a return of a specified financial index for the corresponding period if the return of the specified financial index is less than a specified cap return but greater than a specified floor return; 
 the principal of the index-linked note and the specified cap return if the return of the specified financial index for the corresponding period is greater than the specified cap return and greater than the specified floor return; and 
 the principal of the index-linked note and the specified floor return if the return of the specified financial index for the corresponding period is less than the specified floor return and less than the specified cap return; and 
   periodically increasing the specified floor return.   
     
     
         2 . One or more computer-readable media as recited in  claim 1 , further storing computer-executable instructions that, when executed on the one or more processors, perform acts comprising:
 determining a maturity date of the index-linked note; and   periodically determining whether the maturity date of the index-linked note has been reached.   
     
     
         3 . One or more computer-readable media as recited in  claim 2 , further storing computer-executable instructions that, when executed on the one or more processors, perform acts comprising:
 responsive to determining that the maturity date has been reached, outputting an indication that the principal of the index-linked note is to be returned to the purchaser or to a current holder of the index-linked note.   
     
     
         4 . A method comprising:
 selling an index-linked note with a maturity date to a purchaser in exchange for payment of principal by the purchaser;   querying whether a triggering event has occurred during a respective period;   responsive to determining that the triggering event has not occurred during the respective period:
 calculating an amount of a coupon to be issued to the purchaser, wherein the amount of the coupon is based on performance of a financial index during the respective period, a cap return, and a floor return; 
 issuing the coupon in the calculated amount to the purchaser or to a current holder of the index-linked note; and 
 increasing the floor return; and 
   responsive to determining that the triggering event has occurred during the respective period, ceasing payment of periodic coupons.   
     
     
         5 . A method as recited in  claim 4 , wherein the calculating of the amount of the coupon and the issuing of the coupon comprises:
 determining a percentage performance of the financial index during the respective period;   determining the cap return agreed upon between a seller of the index-linked note and the purchaser of the index-linked note;   determining the floor return agreed upon between a seller of the index-linked note and the purchaser of the index-linked note; and   issuing a coupon in an amount equal to a product of the principal of the index-linked note and one of the performance of the financial index during the respective time period, the agreed-upon cap return, or the agreed upon floor return.   
     
     
         6 . A method as recited in  claim 4 , wherein the calculating of the amount of the coupon and the issuing of the coupon comprises:
 if a percentage performance of the financial index during the respective time period is less than the specified cap return but more than the specified floor return, then issuing a coupon in the amount of a product of the principal of the index-linked note and the percentage performance of the financial index during the respective time period;   if the percentage performance of the financial index during the respective time period is greater than the specified cap return and the specified floor return, then issuing a coupon in the amount of a product of the principal of the index-linked note and the specified cap return; and   if the percentage performance of the financial index during the respective time period is less than the specified floor return and the specified cap return, then issuing a coupon in the amount of a product of the principal of the index-linked note and the specified floor return.   
     
     
         7 . A method as recited in  claim 4 , further comprising returning a portion or an entirety of the principal to the purchaser or to a current holder of the index-linked note at the maturity date of the index-linked note. 
     
     
         8 . A method as recited in  claim 4 , wherein the triggering event is the death of the purchaser or the death or another reference person. 
     
     
         9 . A method as recited in  claim 4 , wherein the financial index is a third party index that is not associated with an entity selling the index-linked note to the purchaser. 
     
     
         10 . A method as recited in  claim 9 , wherein the third party financial index comprises a market performance index. 
     
     
         11 . A method as recited in  claim 4 , wherein the issuing of a coupon occurs on a periodic basis if the triggering event has not occurred for each respective period. 
     
     
         12 . A method as recited in  claim 11 , wherein the periodic basis is a yearly basis. 
     
     
         13 - 19 . (canceled) 
     
     
         20 . One or more computer-readable media storing computer-executable instructions that, when executed on one or more processors, perform acts comprising:
 determining whether a triggering event has occurred during a time period of an index-linked note, wherein the index-linked note specifies that a holder of the index-linked note is entitled to periodically receive payment in the form of a coupon until a stated maturity date, at which point the holder of the index-linked note or another entity is entitled to receive a principal paid for the index-linked note; and   if the triggering event has not occurred during the time period of the index-linked note, then calculating an amount of a coupon to be paid to the holder of the index-linked note by referencing a return of a financial index, a floor return, and a cap return; and   periodically increasing the floor return.   
     
     
         21 . One or more computer-readable media as recited in  claim 20 , wherein the calculating of the amount of the coupon comprises:
 multiplying the return of the financial index by the principal paid for the index-linked note if the return of the financial index is less than the cap return but greater than the floor return;   multiplying the cap return by the principal paid for the index-linked note if the return of the financial index is greater than the cap return and greater than the floor return; and   multiplying the floor return by the principal paid for the index-linked note if the return of the financial index is less than the cap return and less than the floor return.   
     
     
         22 . One or more computer-readable media as recited in  claim 20 , further comprising:
 after the calculating of the amount of the coupon, repeating the determining of whether the triggering event has occurred for each respective period specified by the index-linked note.   
     
     
         23 . One or more computer-readable media as recited in  claim 20 , further comprising:
 determining whether the stated maturity date of the index-linked note has been reached; and   causing dispersion of the principal paid for the index-linked note to the holder or to another entity if it is determined that the stated maturity date of the index-linked note has been reached.   
     
     
         24 . One or more computer-readable media as recited in  claim 20 , wherein the triggering event is the death of a purchaser of the index-linked note, the death of the holder of the index-linked note, or the death of another reference person. 
     
     
         25 . One or more computer-readable media as recited in  claim 20 , wherein the financial index is a third party index that is not associated with an entity that sold the index-linked note.