Principal Protected Notes

I have a friend who told me about Principal Protected Notes. Can someone please give me the pros and cons of these? From our understanding the only risk to your money is if the issuing bank went under, with the upside of great returns. They were telling him about 12%+ or more returns a year, with very little risk. There has to be a big catch to these, but we cannot find it. It is a financial product people are trying to sell, so it seems like it is just to good to be true. If anyone knows more a