Martin Lee @ Sg
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Minibond Payout Values

The payout value of the various Minibond series was announced yesterday. Depending on which Minibond tranche you held, the percentage of recovery will range from 21.5% to 70.8%.

lehman minibondTranche Series Percentage Recovery* (%)

Series 01 Tranche A (SGD Notes ) 21.5
Series 01 Tranche B (USD Notes) 24.0
Series 02 Tranche A (SGD Notes) 62.4
Series 02 Tranche B (USD Notes) 70.8
Series 03 Tranche A (SGD Notes) 55.9
Series 03 Tranche B (USD Notes) 64.0
Series 03 Tranche C (AUD Notes) 47.3
Series 05 (SGD Notes) 29.8
Series 06 (SGD Notes) 40.0
Series 07 (SGD Notes) 59.5
Series 08 (SGD Notes) 63.1
Series 09 (SGD Notes) 57.7
Series 10 (USD Notes) 62.4

I had expected about 50-60% recovery values for the different series and the majority indeed does fall into that range. Series 1 and 5 Minibond holders are the worst off in the amount they are getting. The series with the most number of investors are series 2, 3 and 5.

Payments to the noteholders will be made on 12 February 2010. The actual date that you receive your payment will depend on whether you hold a direct account with CDP or whether you hold the Notes through a nominee account.

More news on this:

HSBC Minibond Announcements

MAS Welcomes Announcement of Distribution of the Recovery Values of the Minibond Notes

Payout for Minibond Holders From 12 Feb (CNA)

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20 comments
sureesh says 9 years ago

Perhaps KM lawyers should say just how much of a support do they need to initiate a class action suite.

Reply
Kenneth says 9 years ago

Yes, the MB saga is over except for the KM lawyers from America wishing to hold a seminar on 14 April 10 at Fullerton Hotel. The purpose is to have a class suit against LB. The fee proposal is such that they will only charge if they win the case e.g. 15% to 20% of the winning.

I plan to hear them out as long as there is minimum cost to me.

For the above to work, KM lawyers must have enough support and claims else it is a waste of time. I also think they have to tell us whether going after a dead company like LB is feasible compared to Morgan Stanley [Pinnacle]

Good if we can continue to use this platform to discuss after the seminor or ask lioninvestor for his opinion.

The MB saga is a lesson learnt but there are going to have more innovative bombs coming. Don’t trust the authority to screen for you. They will not and MB proved it.

Reply
chong says 9 years ago

Yes, I have received my money.
Thanks very much everyone.
Really appreciate your comments and replies.

All I can say after this minibonds saga is that I paid very high tuition fees to learn and become a wiser investor.
Yes, I did get back some money for which I am grateful but all of us still lost a lot of money.
The best thing that has happened is my discovery of this website. It gave me info and comfort when very little or none was available from FI, authorities etc.

I would like to say a big Thank You to LIONINVESTOR and everyone else.

Reply
    lioninvestor says 9 years ago

    Hi Chong,

    You are welcome. Glad to be of some help.

    Reply
kenneth says 9 years ago

Yap. Resideu came back on 12 Feb 10 for my MB3A. Notes disappeared from CDP account the following week.

Reply
    chong says 9 years ago

    Gee thanks everyone. Will call maybank to find out.

    Reply
Kenneth says 9 years ago

MB3A CDS condition was 12 out of 150. In the beginning of the crisis, I heard 5 defaulted. Rating for these CDS were bogus and not trust worthy. Worst is that LB pruchased them only after collected the money from us thus no one knows how LB decided on these 150 CDS.

Even after US Govt saved the big institutions, smaller banks are still collapsing in USA.

For our MB, once a total default is triggered, may it be CDS or CDO, it will be another tragic story for MB similar to HN5 and Pinnacle. These owners are suffering and there is no help at all. Hong Kong authority can’t do anything for Hong Kongers who owned High Notes.

As a MB owner, I can only say “walk away” To get back so much from a dead company with a bullet proof prospectus, we can consider ourselves lucky.

Best wishes for those bigger investors who are continuing with HN5 suit, MB suit and FIDREC adjudication.

There are still a significant number of people in FIDREC adjudication process as they were told to proceed only after liquidation. These are the people with >$50,000 MB investments.

Reply
    chong says 9 years ago

    Has everyone gotten their money back already?
    I know it may take sometime to credit back but I have yet to receive mine.
    btw anyone bought mb thro maybank?
    I did not even receive or hear anything from them. Anyone with similar experience with them?

    Reply
      lioninvestor says 9 years ago

      Hi Chong,

      The money should have been credited to you on 12th Feb 2010.

      Reply
      Jasmin says 9 years ago

      Hi Chong,
      Mine was series 2 bought from Maybank.
      I have received my cheque quite some time ago (around 12 Feb 2010).
      Now is getting close to mid Mar and if you have yet to receive your cheque, I think you better call to find out.

      Reply
Kenneth says 9 years ago

I think this is the closure of the minibond saga especially for those small investors.

We are fortunate on serveral counts:-

i) There is significant residue value as compared to Pinnacle, HN5 and Jubilee.

ii) MB was terminated before the 2nd level CDS collapsed. Had we continue to hold on, our MB has a high chance of ending up like Pinnacle 3.

iii) 80% of the 8,000 plus MB investors [see MAS website] were compensated 50% and above. This means that people who own MB2 and MB3 took back 78% of their principle.

Since MB is largely owned by small investors, bulk of the people will just move on since it is clear that MAS has already have it’s final say.

Lesson learnt?

Don’t believe everything your RM/FA tells you. They too don’t understand the product and for MB case, they were told by LB the same thing they told you i.e. Safe as FD and it is a bond from big & strong companies designed for small investors.

Reply
    lioninvestor says 9 years ago

    I agree this would be end of story for most people.

    However, I think if the minibond underlying swaps were not terminated, we might have a higher recovery value. Remember the swap was terminated at the depth of the crisis.

    Reply
      chong says 9 years ago

      Agreed but suppose it is hard to time well. Could have gone either way. Nevertheless, was disappointed that they terminated then.

      Reply
HINGSIGHT says 9 years ago

The investors pay for this settlement. This action is initiated by the trustees – HSBC Institutional Trust with the help of Price Waterhouse Coppers as receivers and liquidators of the notes . And the investors pay for all these fees. Did MAS pays anything?

Reply
Jasmin says 9 years ago

Not forgetting the Receivers and Liquidators should have received their fee first before us.

Reply
VSL says 9 years ago

This may not be the closure yet. I think you are still free to pursue legal action privately if you feel shortchanged.

However, this being a generous offer to most investors, I think most investors will drop further action after receiving this further compensation. They would have recovered a large % of their investment by then, and it may not be worth it to chase further.

While it a happy ending to a long drawn saga, I wonder what prompted the authorities to suddenly become generous. Was this initiated by the FIs, or the MAS? Is the govt fearful of a backlash?

Reply
    lioninvestor says 9 years ago

    Hi VSL,

    There was no change in the stance of the authorities.

    The payout came from the residual value of the Minibonds, which was there all along. Everything was frozen when Lehman collapsed and it took time to unwind and liquidate the notes. This has nothing to do with the absence or presence of generosity in the authorities, FI or MAS.

    Reply
      VSL says 9 years ago

      Hi LI,

      Tks for clarification.

      True, there was residual value in the Minibond products. But for it to be valued and liquidated so soon (only 16 months since the collapse in Oct-08) seems rather quick, considering the extreme complexity of the products. Most ppl expected this to happen (if at all it happens) in a few years time.

      Perhaps the Receivers and Liquidators of Minibond did a super job.

      Reply
        lioninvestor says 9 years ago

        Hi VSL,

        The main issue holding the liquidation back was the legal tussle with a counter claim from Lehman (can’t remember the exact entity offhand) which was resolved sometime last year. Once that was cleared, the rest is not as complicated. If that issue was not settled, then yes, it might take years.

        Especially more so as liquidity to the financial systems have been more or less normalized.

        Reply
Jasmin says 9 years ago

Are we getting a fair residual value? After collecting our $$, is this considered a closure for this saga?

Reply
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