This notice by HSBC Trust on the Minibond Series 5 and 6 came out in the Straits Times yesterday (You can click on the images below to view).
Essentially, what they said is this:
- The coupon payment that was due to be received on 22th Sep 2008 for Minibond Series 5 and 6 has not been received.
- Accordingly, they will give a grace period of 15 days for Lehman to make the payment.
- After which, they will have the rights to sell the underlying securities and return the proceeds to noteholders.
- At the moment, they are obtaining the market valuation of the underlying securities. Once they have the information, they will take it into account to determine the course of action that best serves the interest of noteholders.
- Written notices will be sent out to noteholders when there is any material developments.
- For the other Minibond series, technically they will still continue to operate as normal. A default will only be called if a coupon payment is due and the money is not received. In the meantime, HSBC has written to the issuers to find out its intentions on the existing swap arrangements.
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