After so many weeks, Lehman Minibond investors finally have some good news to cheer about.
This concerns the finding of a new swap counterparty.
Two international financial institutions licensed by MAS to operate in Singapore (has on today) submitted to HSBC Institutional Trust Services (Singapore) Ltd their proposals to restructure the Minibond notes.
If accepted, their proposals will allow the Minibond to run until maturity. At this point, it is still premature to speculate the amount of capital that will be returned on maturity after this restructuring.
The details are being finalised at this stage and will ultimately require the approval of all relevant parties. As part of the deal, there will also likely be an exit clause for investors who do not wish to hold on to the Minibonds.
An independent financial advisor will be appointed by MAS within a week to advise investors on the pros and cons of the proposals.
In a separate announcement, Hong Leong Finance has decided to compensate in full (net of interest) Minibond investors who are 62 years or more at the time of investment and with not higher than primary school education.
Hong Leong Finance Announcement on Minibond
Maybank has also indicated they will have some form of compensation. Details have yet to be released.
Hopefully, this will set the stage for other financial institutions to follow suit.
More on this on Channelnewsasia:
Lifeline for Most Investors (Straits Times)
A Surprise from DBS (Today)
Hope Flickers for Victims of Lehman-Linked Notes (Business Times – access after 6pm)