Is a derivative-linked bond (ELB) a safe, principal-guaranteed bond?

Many ELBs are designed to pay back principal and interest, but they are not covered by deposit insurance, and the money invested is not deposited separately from the issuing securities firm's own assets.

Therefore, if the issuing securities firm goes bankrupt, there is a risk that you will not get your principal and returns back. Even if the underlying asset is the share price of a blue-chip company, keep in mind that repayment of principal and interest depends on the issuer's ability to pay.