Martin Lee @ Sg
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HSBC Trust Terminates Swaps of Underlying

HSBC Institutional Trust has informed MAS that they have taken certain steps in the interest of Lehman Minibond noteholders.

They have terminated the swaps of the underlying securities for series 1-8. This will help to preserve the value of the underlying securities.

Also, they have appointed three partners from PricewaterhouseCoopers Singapore (PwC) to act as receivers for series 5 to 8. Their role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders. 

Separately, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser to provide advice to investors on any potential restructuring of the minibond.

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5 comments
nightfalc says 7 years ago

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Reply
chris says 10 years ago

Hi,

Saw the paragraph relating to series 9 and 10 below:

‘This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.’

What does it means for series 9 and 10? Any ideas?

Reply
    lioninvestor says 10 years ago

    The underlying securities of series 9 and 10 are floating rate notes issued by Wachovia unlike the toxic CDS of the other series, so there are no CDS swaps to terminate.

    Reply
      Alice low says 10 years ago

      Hi

      The underlying securities of series 9 and 10 are floating rate notes
      issued by Wachovia unlike the toxic CDS of the other series,so there are no CDS SWAPS to terminate.
      Question 1. What we should do next?
      2. What do you means by CDS?
      3. What do you means by floating rate notes?

      Reply
        lioninvestor says 10 years ago

        1) Nothing much we can do other than the filing of dispute if there is mis-selling.

        2) CDS – credit default swaps

        Those minibond with synthetic CDOs as the underlying securities would have their CDS terminated.

        HSBC trust has indicated that series 9 and 10 do not have any underlying swaps, so it can be taken that the Wachovia floating rate notes do not have CDS.

        3) Floating rate refers to the interest coupon on the notes. It means they will be based on certain benchmark – eg LIBOR.

        Reply
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