Martin Lee @ Sg
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DBS High Notes 5 Liquidation Value

As expected, DBS has announced that the final liquidation value of the DBS High Notes 5 is zero.

Zero payout for DBS High Notes 5 investors (Business Times – Access after 6pm)

No gain from investors pain over High Notes 5 (Business Times – Access after 6pm)

I expect a highly charged event in the DBS meeting with High Notes 5 investors tomorrow.

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5D says 13 years ago

I would rather be ripped off by a bank which has not gone belly up so that there is a chance for recourse 🙂

Del Boy says 13 years ago

What I found distasteful about the DBS High Note is that there is an element of intentional deception here. Why the convoluted structure ? a Note issued by DBS bank which is linked to a credit linked note issued by Constellation, which in turn is secured by a CDO issued by a Cayman vehicle called Zenesis. Wow !

This must be the most complicated CLN ever created. The question then is why such complications ? Why not just sell a Note issued by Constellation (like the Lehman’s structure, a note issued by Minibonds Ltd).

I believe they put the DBS label “on top” of the entire structure to make it more enticing & credible. An unsuspected customer would say to himself or herself ……hmmm………. “a DBS Note pays me 2% more than depo rate over 5yr sounds like my money is in safe hands. Nothing too much to worry about ”.

I think the senior management there knows DBS had done a dirty on their customers. Instead of using the RMs as “silence of the lambs”. The entire management should do the honorable thing and resign ! The implicit trust between a bank and its customers is breached, never mind the legal mumble jumble.

    lioninvestor says 13 years ago

    Hi Del Boy,

    Just to check, isn’t the Minibond structure similar to HN?

    With the underlying securities issued by notes from another SPV (zircon, beryl, etc).

      Del Boy says 13 years ago


      Minibond = Constellation
      Zircon, Beryl = Zensis

      The difference is, in the case of DBS’ structure, the investors were buying a Note called DBS High Note 5 issued by DBS bank itself. This Note is explicitly linked to something called “Reference Notes” (i.e. the Credit Linked Note issued by Constellation).

      In the case of Lehman, the investors there were simply buying a Note issued by Minibond Ltd.

      I guess it is a case of which one is worst – being rip off by an ang moh bank or one of your own ?!

        lioninvestor says 13 years ago

        You are right.

        The DBS label was used to sell the product. Who would want to buy from Constellation?

QQ Brother says 13 years ago

Any idea of MS Pinnacle note? think they got similar products too. Any updates on the Valuation?

Khoo Hong Meng says 13 years ago

Looking at the unfolding of events pertaining to DBS High Notes, it has certainly brought much bad publicity to DBS bank. Selling these potentially risky investment products to retirees and people who are financially conservative is ethically unsound. The relationship managers are certainly aware of these people’s financial profile and their appetite for risks after completing their investment profile survey forms. Why are they selling them these structured products when there are mismatches in profiles?
To redeem the bank’s reputation, DBS is encouraged to seriously consider calling back all the DBS High Notes Series before further damages occur.

Rita Khoo

    kwl says 13 years ago

    I do believe that the investors of High note 5 have a strong case against DBS if they wish to recoup all their money. Within this year alone, DBS sent out a few letters to the investors to “reassure” them. However in one of the letters, the explaination regarding how the principle amount invested in High note 5 will be affected is deeply flawed. This is proof that DBS is quite clueless about how the product actually works. I urge all investors to seek legal redress as I believe DBS is standing on shaky grounds as a result of the release of the above letter to the investors. The letter is sent sometime around March 2008 by a Vice President of DBS named Brandon Lam.

      Foolish Investor says 13 years ago


      For Minibonds, the prime culprit & beneficiary is Lehman Brothers (too bad, it’s gone now).

      For HN5, the arranger, issuer, and perhaps swap counterparty, is DBS (still around). They should not be let away just on “caveat emptor”…must show the world that what they are doing is un-ethical, by packaging and selling CDO in the name of “Notes backed by AA or AAA rated underlying securities”. 挂羊头,卖狗肉.

      But no hurry.
      Maybe the Hongkongers will initiate the legal action first, since HKMA & the public will not side DBS-HK.

        HK5D says 13 years ago

        There has been debate as to whether class lawsuit is suitable or not. Certainly it looks like more suitable in the case of HN5 precisely for the reason mentioned.

        For those of you who have been to Hong Lim park gatherings, you might have run into a lawyer there signing people up about class lawsuit. He ([email protected]) might be able to provide some specific views on HN5.

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