Martin Lee @ Sg
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Jubilee Series 3 LinkEarner Notes

I have some bad news for Jubilee Series 3 LinkEarner Notes owners. I found this Q and A issued by Merrill Lynch on CIMB’s website. (They have subsequently removed the Q and A)

Question 4 : What is the likely Credit Event Redemption Amount?

The Credit Event Redemption Amount has not yet been finalized but wil be determined by the Calculation Agent in accordance with the procedures described in the Pricing Statement. Based on current market conditions, the Credit Event Redemption Amount is likely to be zero or an amount close to zero. It is likely that Noteholders will lose all or substantially all of their principal invested in the Notes. The Calculation Agent will notify you of the Credit Event Redemption Amount as soon as resonably practicable after its determination.

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15 comments
Conned says 9 years ago

Has anyone succeeded in getting some compensation from their FI/FA? I am particularly interested in Phillips Securities Ltd. Also has anyone push their case through FiDRec, and what has been the outcome please?

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    Conned2 says 9 years ago

    I went thru FI & then FiDrec. Despite putting up a 8-page write-up listing all the points how the FI did not bother to explain or carry out their duty on product disclosure, was told that the judge has rejected my case. My FI is OCBC Securities but it’s the same for other Securities firms, they use same excuse they just execute your order like shares. The judge agreed this structured note works like shares & can be sold like that. What more can I say about the System.

    Reply
lioninvestor says 11 years ago

I just made a post on the liquidation value of Jubilee 3.

Unfortunately, it has been confirmed that it is zero.

http://www.martinlee.sg/jubilee-series-3-liquidation-value/

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Jubilee says 11 years ago

There are at least some hope for Lehman Minibond.

But no news for Merrill Lynch Jubilee Series 3 Notes yet.

SINGAPORE -(Dow Jones)- Singapore’s central bank said Tuesday that Lehman Brothers Holding Inc. (LEH) has defaulted on an issue of bonds sold to local investors.

The Monetary Authority of Singapore said in a statement that the trustee for the Minibonds will consider finding a counterparty to replace Lehman Brothers.

The trustee said if it doesn’t find a counterparty arrangement it will liquidate the bonds and pay the proceeds to bondholders.

Holders of the Lehman bonds include retail investors who have asked the central bank for help in recouping their investments.

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    CB says 11 years ago

    How could 1 default party lead to the wiping out of all the value of the notes, this is clearly a con job. I called this the highest level of white collar crime.

    Reply
Blue says 11 years ago

CREDIT DERIVATIVE TRANSACTION RELATING TO THE JUBILEE SERIES 3 LINKEARNER
NOTES: SGD26,290,000 CREDIT-LINKED NOTES DUE 2014 (THE “SGD NOTES”) AND
USD1,400,000 CREDIT-LINKED NOTES DUE 2014 (THE “USD NOTES”, AND TOGETHER WITH
THE SGD NOTES, THE “NOTES”) – NOTICE OF A CREDIT EVENT

We refer to the Confirmations between Merrill Lynch International and Jubilee Global Finance Limited with Reference Numbers 07ML61022A; 07ML61023A each dated 1 June 2007 (as amended,
the “Confirmations”) confirming the Transactions between us (the “Transactions”) under the 1992 ISDA Master Agreement and Schedule thereto dated as of 26 January 2007, as amended and
supplemented from time to time (the “Swap Agreement”). The Transactions reference, inter alios, Lehman Brothers Holding Inc., (the “Affected Reference Entity”) as a Reference Entity thereunder.
Terms not otherwise defined in this letter shall have the meanings set out in the Confirmations or the Pricing Statement relating to the Notes dated 12 April 2007.

This notice constitutes a Credit Event Notice given pursuant to the Confirmation and shall also be deemed to be a Notice of Publicly Available Information given pursuant to the Swap Agreement.

1. We hereby give you irrevocable notice pursuant to the Swap Agreement that a Bankruptcy Credit Event occurred with respect to the Affected Reference Entity on or about 15th September 2008 when the Affected Reference Entity filed for bankruptcy protection in the United States. This constitutes a Credit Event under the terms of the Confirmations.

2. Pursuant to the Confirmations, we cite with respect to this Credit Event the Publicly Available Information attached hereto as Annex A.

3. This notice will be deemed to be effective on the London Business Day it is delivered if it is delivered prior to 4.00p.m., London time on that Business Day, or on the following London
Business Day if delivered after 4.00p.m., London time.

4. Nothing in this letter shall be construed as a waiver of any rights we may have with respect to the Transactions.

5. This letter shall be governed by and construed in accordance with English law.

Yours faithfully,
for and on behalf of
MERRILL LYNCH INTERNATIONAL

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Ben says 11 years ago

Hi VSL, you are exactly right.
The more reference entities the higher probabilities of termination due to the “first-to-default” condition. The reason why investors were hoodwinked is because the prospectus also list Reference obligations: Bonds under each of the RE which pay interests for many more years to come. This is to mislead people into thinking there are other entities with Bonds to provide you with salvage values when one RE fails.

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Conman Brothers says 11 years ago

This Jubilee Series Notes from Merril Lynch is another con job like DBS High Notes. When they sell to you, they hard sell the fact that these are strong Company entities and neglect to tell you the part about zero value even if just one entity defaulted. What happen to the value of the six or seven other Entities that are still operating? They wanted you to have the impression that you will lose 1/6 or 1/7 of the deposit value only so as to create a false sense of security.

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    CB says 11 years ago

    Yes, this was what I was told when buying into this toxic notes, low risk, very safe, one fall will have others to support, bla bla bla, now what, all keep their mouths shut, just intimdate us by asking ask to seek leagal advise, sigh……..

    Reply
      Kenneth says 11 years ago

      SM Goh said yesterday – No high return without risk. “That’s life, if you want good reward you have to take risk, else put your money in CPF.”

      Well, finally some words from the top which I am very disappointed. The issue is not we are not prepared for high risk, the issue is our FI and FA did not conduct professionally and hookwink us by selling us a product without telling ask the potential risk involved in the event of credit event. All they said was low risk and big strong banks like the Reference Entities will not fail. So very safe, no brainer.

      Neither did they explain where the money is suppose to be use. These are the basic stuff that is needed to explain and not expecting us to search through the prospectus for these answers.

      My understanding is that if there is a Credit Event, we can still redempt the bonds held by RE and the loss would not be too significant like 0 or 1/2 of the principle.

      READ ALREADY VERY HOT….

      Regards,

      Reply
        Mr Lew says 11 years ago

        Hi Kenneth,
        Have you ever heard of PEANUT. To him, every invester with
        CLS deserved it, understad?

        Reply
    VSL says 11 years ago

    This action of a bond/note terminating just because of a credit event of just 1 RE is adding more risk to the mix. Why would anybody want to buy a bond with 6 or 7 REs when buying a bond with 1 RE would be safer? It’s unfortunate that this ruling that first-to-default will terminate the bond is now highlighted. Many investors may have mistakenly believed that having more REs is better, when it is the other way round.

    Reply
lioninvestor says 11 years ago

Aaron,

Until you receive a notice telling you otherwise, the notes should still continue to run.

You can double check with the distributor you bought it from.

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Aaron says 11 years ago

sorry i mean Note 8

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Aaron says 11 years ago

so what does this entail to other notes holder like jubilee series note A. So BOA buying ML consider a credit event in this case?

Reply
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