What Will Happen to my Lehman Minibond?

Bouncee says 15 years ago

Has anyone had any knowledge or can estimate how much Singaporeans put their money in the Mini-bonds? The amount may be very huge and this figure might get MAS to be concerned about it.

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j_asmine says 15 years ago

So does that mean that we will have to file our case with FIDREC to pursue the case?

The first entity to view that the product is deemed to be suitable to be sold to the retail investors is MAS, isn’t it? The distributors of course play a part in the failure of not highlighting the risks to their financial advisers that this structured product entails and therefore sold to us as relatively safer instruments.

Demand and supply. If there isn’t a demand for high yielding instruments, there will not be a supply of them.

However, how can any financial institutions market their products that are structured and not letting their investors know the underlying securities?

I blame myself for not being more prudent. As a fresh finance graduate, I should have known that high returns equates to high risks. Seriously, after hearing from the banker last mid year, I really thought that I was buying into the bonds for the 6 REs! The credit swaps and whatever not is for the issuer/arranger to hedge themselves from the risk and thus making the investment safer. And I even told my dad that these Minibonds are much safer as compared to unit trusts and structured deposits!

My kind parents told me that they do not wish to implicate the banker we bought it from. Is there any other way I can go about getting our money back?

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ENGEL says 15 years ago

Anyone has update of yesterday’s evening meeting ? Kindly share wit us. Thanks !

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Patrick says 15 years ago

that is amazing, even till date the FIs are all trying to save their rear. why bother asking us to call them when all they want is to push the blame away?

anyhow i saw the Today article, 90 signatures, wow that’s quite a lot.

another article from CNA :

Online petition for investors who bought Lehman-linked structured products

http://www.channelnewsasia.com/stories/singaporelocalnews/view/378145/1/.html

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chris says 15 years ago

After seeing the reply from MAS in Today newspaper, I am prepared for the worst as I take the loss as a fee to pay for learning a lesson, but I am hopeful for the best though. However, in future, if any bankers trying to sell me any products when I step into the banks, I will ask them to go fly kite! NO MORE BUYING OF FINANICAL PRODUCTS FROM THE BANKS!

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JC says 15 years ago

I wrote to Maybank and the officer called me even have the cheek to tell me that MB is “very similar to bond”! She remained silent after i told her off that this is not a bond and got nothing to do with bond. This shows how ignorant the bank staff are even till today.

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goondu says 15 years ago

hi All,

Here is Today article http://www.todayonline.com/articles/277862.asp with headline “MAS fast tracks complaints” .

I have simply no confidence on any investment product from now. Because, last night I heard from my 65 years old mother-in-law that UOB Bank called her and advise her to redeem her United Capital Protected Funds – Series 3. I am puzzled what this product got to do with lehman brothers ????? She did so and lost about 20% of her capital sum invested. SAD!!!! VERY SAD!!!

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ALVIN says 15 years ago

does anyone know if iwant to sent to heong leong finance what is the email address??? thanks alot

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Ang says 15 years ago

Hi, did you guys contact your FI to state your grievances as advised by MAS? I’ve not done so as I find it quite pointless.

Ok, so when I call them, I said you did not tell me this and that. What am I expected to hear? Yes, I’m so sorry I didn’t, please sue me on that. Or I told you everything necessary, don’t blame me now that you lost money!

Anyone know if it is indeed necessary to do so before we take further actions.

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reitsg says 15 years ago

Just received from HSBC on the series 5,6. Wonder what is there any different between 3 and 5,6. can anyone explain.
Thanks

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andrew says 15 years ago

since all our minister in singapore has a public email, does it help if we submit our petition to all the relevant ministry including prime minister office to outline why in first place mas allowed such products etc..etc..

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ALVIN says 15 years ago

how is the meeting this evening what is the outcome????

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WJ says 15 years ago

Hi Del Boy,

could you help to access this report also:
http://reports.fitchratings.com/coms2/summary_0266-90358_ITM

Title: Fitch Downgrades Zircon Finance Series 2007-12; Removes RWN
Publication Date: 25-JUL-08

Which is the Underlying security of Minibond Series 5.

I just don’t understand what causes an AA rated security to be downgraded to B- within 1 year.
According to the pricing statement of my Minibond Series 5, Lehman Brother had an obligation to use only AA rated security to back up the notes at the point of purchase (jul 2007), meaning, those zircon notes should have AA rating on Jul 2007.

If somehow we found otherwise (the notes was not AA rated at the time of purchase – Jul 2007), then I believe we should be able to do something about it.

Thanks.

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Ahthong says 15 years ago

Great meeting that went on this evening. So what are the next steps?

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Lucky says 15 years ago

[B]The case is clear[B/]

Assume most investors were given these:

1) It was sold as low-yield and almost fail-safe investment. Look at the Investment Assessment that says your Risk Profile. It said clearly about you.

2) Investors were told by FI only any of the 6 entities “Bankrupt”, “Fail to Pay” and “Restructure” will constitute closure of the fund. No other parties (like LB) was mentioned as critiria.

3) Closure of fund was not explained as what we are going to experience now. Investors thought they just get back the principle, that is.

4) No adverse risk situation were warned to investors.

5) FI encourages full trust on the fund. Large life savings, including CPF funds, were encouraged.

Parties Liable (I think):

1) MAS – They failed to scrutinise and realsie the high risk OR knowing but failed to enforce warning of such high risk investment when passing them down to market. Already minibond series 9 and no sign of warning. Clearly a BIG LAPSE in governing role.

2) FI – They are responsible for the above “promises”. They have no excuse to bear part of the losses. At least 30% of the fund in my view.

3) Trustee HSBC – They did not warn this risky product till now. They are highly responsible as a major role player in the fund.

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Sian says 15 years ago

Hi all,

Pls login here to sign your petition:
http://www.petitiononline.com/CLSINVES/petition.html

in tan kin lian website

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VerySian says 15 years ago

foolish investor, why get frustrated over the asiaone article. the banks are working on new “bombs” in a very different packaging to sell to the next batch of foolish investors once this issue die down. hopefully not us again. black heart right but it’s reality, never trust a banker…the banks will help only if there is $ for them to earn and/or get a fat bonus. this issue really tarnish the image of the banks. we can only go to the government or mas for help now. i think mas image is also at stake, i don’t know will affect the next ge or not. $ and commoners’ life saving is a very emotional issue. i hope our pm can look into this.

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VerySian says 15 years ago

hello del boy,

if mas already know cdo are risky investment for many years, why they still approve it to be sold to retail investors like us? was there an overishgt? someone need to answer for this!

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VerySian says 15 years ago

yes i agree wth del and burntoast.
mas certainly cannot keep pushing us to look for hsbc, the banks/broking houses, fa, etc. there will be a time when enough is enough. correct me if i’m wrong, without mas approval, who can sell them in an island famous for very strict law. and the best part is the marketing materials, did any financial expert in mas read through and questioned whether those “bombs” are really “sound investment”……linked to the bonds of reputable banks and corporations as claimed in the marketing brochures? can they be sold to retail investors or for the rich only?
how mas handle this problem will determine its credibility and image like both of you said. not just s’poreans’ confidence alone on the government institution, hk and the international community will be looking as well. is this really a caring one who deserves world class salary? bottomline, i think everyone wants to have their money back or reduce their loss to a bare minimum. it’s not possible for working class people like us to take on the banks/broking houses, whether collectively or individually. if we/you lose the case, not just the investment is gone, we/you can go bankrupt if they counter-sue. my 50k…..very sian and sad.

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nhyone says 15 years ago

At this point, would anyone be interested to take over Lehman Brother’s role as the arranger, swap counterparty and swap guarantor?

Would a lawsuit scare off anyone who might be interested?

MAS already said it has no power to force distributors to compensate the investors, but only to fine them.

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Louis says 15 years ago

Real reasons why investment banks package “Mini-Bonds & High Note 5” as a very safe investment to the naive public.

CDS’s (credit default swaps ), CDOs (collateralized Debt obligation) and all the other credit derivatives that populate the global financial markets present a new and uncertain risk for investors. Let’s dig a little deeper…

(Collateralized debt obligations are an unregulated type of asset-backed security and structured credit product. CDOs are constructed from a portfolio of fixed-income assets. These assets are divided by the rating firms that assess their value into different tranches: senior tranches (rated AAA), mezzanine tranches (AA to BB), and equity tranches (unrated). Losses are applied in reverse order of seniority and so junior tranches offer higher yields coupons (interest rates) to compensate for the added default risk.)

CDOs are new-fangled credit derivatives – i.e. they are bond-like instruments that are derived from pools of loans, usually mortgages. Through the wizardry of modern financial engineering, a pool of sub-prime mortgages, for example, can become an array of CDOs, some rated as high as AAA, others rated much lower. Industry insiders sometimes refer to the lower-rated CDOs as “toxic waste.”…

Institutional investors have been gobbling up these high-yielding – but very risky – CDOs because they are able to buy default insurance – otherwise known as a credit default swap (CDS).

For example, the buyer of a particular CDO could simultaneously buy a CDS to protect against a default. The investor would, effectively, pay an insurance premium to another investment institution like AIG for underwriting the risk of the underlying home-loans defaulting. Apart from a bit of legal drafting, that’s all there is to a Credit Default Swap. In return for a cash payment, you swap the risk of default.

These insurance premiums, paid to the underwriter of the CDS, appear to the receiver as income – just like the insurance premiums that any insurance company (AIG) would receive. You are being paid for accepting risk, not for lending money.

So you see, the investment bankers like Lehman Brothers have been very clever. They have said there are two components in a bond-interest payment: a fee for the use of your money, and a fee for the risk of default. The CDS simply separates out the [fee] for the risk of default.

The investment bank can have still more fun with this. Just like the boring mortgage streams that we started with, these CDS streams can be aggregated into a pool…then divided into tranches with different risk profiles…producing the magic of higher credit ratings for lower-risk tranches…plus concentrated risk in new toxic waste.

If you can get a credit rating agency to assess the tranches you have created, then you have something that looks like a CDO – and smells like a CDO – but which is not now based on cash flows deriving from borrowed money. Instead, it is based on cash flows deriving exclusively from insurance premiums that are paid to cover the risk of mortgage default.

That’s how CDSs get packaged into what is known as a “synthetic CDO,” and the investment banks (Lehman Brothers) can sell them through our local Singapore Banks (whom re-sell it as “Mini-Bonds or High Notes Five” to the naive Singaporean) for what appears to be fantastic yields. It’s a really neat deal…for the investment banks, which are selling to the highest bidder the right to receive their mortgage default insurance premiums in exchange for assuming the risks of default – so the buyer is just another “investment landfill”. He ends up with what’s called a “contingent liability.”

Why would any investment fund manager possibly fall for this scheme? The modern fund manager has a powerful short-term incentive to get a strong performance out of their clients invested savings. If he gets 2% more than the next guy he is a genius, and he will get more money under his management and much larger performance fees. As long as defaults occur rarely, synthetic CDOs can provide a pretty neat deal for the investors. They earn a steady income stream, simply by promising to stump up if there’s a default.

So you can see now how through the use of synthetic CDOs, fund managers can underwrite credit default risk and increase their income accordingly, without outlaying any fund capital. Importantly, however, they are also placing their fund capital at risk. Your investment banker/fund manager is a genius if everything goes well. But if it goes wrong (bankruptcy of Lehman Brothers), funds like “Mini-Bonds & High Notes Five” gets hammered.

The investors of Mini-Bonds and High Notes Five do well to remember that any investment bankers including DBS, ABN, OCBC…etc is forever and always about money. It is about making as much money as humanly possible, in as many different ways as legally defensible. Investment bankers is not about charity or altruism or the “greater good.” It is also about survival of the fittest – the “fittest” being those who maneuver themselves into obscenely overcompensated positions.

Investment Bankers/fund managers make most of their money by speculating with capital that does not belong to them, or by levying fees and commissions on capital that their clients/investors put at risk in the financial markets. In other words, clients/investors who invest in their financial instrument bear most of the risks. Yet whenever any form of success arrives, investment bankers/fund managers always garner an outsized share of the rewards. That’s asymmetry. And in this case, asymmetry might just be another word for “greed.”

Nobody who is hired help and who plays with other people’s money ‘deserves’ to earn huge compensation. That’s certainly true in a moral sense. But it is also true economically…Let’s start with the fundamental asymmetry of risk in the investment business.

“If you were putting your own money at risk, there’s the possibility of making lots more, but there’s also the possibility you could lose it all. The same, however, can’t be said if you are an investment banker, a hedge fund manager or a trader in credit default swaps. In that case, if you do well, you get a percentage of the winnings or the value of the deal. But if you do poorly and your clients/investors lose money, the worst that happens is that your bonus is zero. You never have to give back anything from the bonus you earned last year. And you still get a base salary comfortable enough to keep up payments on your Posche and Penthouse Condo.

Therefore, dear investors, greed and capital preservation just don’t seem to mix very well, especially when the greed belongs to someone else (banker/fund manager) and the capital belongs to you (naive investors).

But however the CDO story does not end here…

It was not long before the investment banking industry had a “Eureka” moment…They started insuring against the default of securities they didn’t even own! It’s like noticing your friend is looking a bit ragged and taking out insurance on his life for your benefit, without him having anything to do with it. And as long as there is demand for “easy income,” there’s no limit to how many of [CDS, the investment banks may create.]

When Delphi Corporation, a large motor parts spin-off from General Motors, got into serious trouble last year, its bonds fell into default. Incredibly, more than 10 times the nominal value of its bonds were then claimed from investment institution underwriters, by bankers who had insured against the default of bonds they didn’t own by issuing Delphi CDSs.

This isolated incident suggests that the mushrooming growth of credit-derivative issuance imparts an unknown and untested threat to the global financial system….

Long Term Capital Management failed in 1998. It was the last truly serious financial collapse which threatened the U.S. financial system. When LTCM went under, the bail-out fund required was US$3.65 billion. The [LTCM] fund itself was leveraged to about $125 billion of assets…

Back in 1998 LTCM was plowing a lonely furrow. Its investment view was something to do with Russian bonds and the Japanese Yen. It was off the main investment spectrum, and there were few copy-cats putting the same market view into action in the same way.

That is where things are very different this time…Many banks and funds are involved…This makes the size of the problem potentially much larger, and of much greater risk to the whole financial system.

How large?…Depending upon who’s counting, the world’s investors now hold somewhere around US$2 trillion worth of credit derivatives, at market value. But since the notional value of these arcane financial instruments exceeds US$40 trillion, no one really knows how large the potential losses could become during a panic.

Now you can see the difference in scale between LTCM and the subprime bust. This may be 20 times worse than LTCM. And it’s getting worse – daily.

At a time like this, we should not underestimate the skill of people like Ben Bernanke at the US Federal Reserve in underpinning the financial system. They have been remarkably effective at organizing the lifeboats over many years and many crises….[But] we think the Bernankes of this world will one day fail.

The result will be a credit squeeze. Bond issues will be pulled, bank loans recalled, and business activity will sharply decline for lack of funding. The first two of these have certainly started – with a rash of failed issues at the end of June. Will these risks be contained? We don’t know…

Clearly I am biased against excessive leverage, and against too much financial ingenuity, too. That’s why I am investing in physical gold/silver bullion. We believe that real physical gold/silver is a sensible insurance against today’s increasingly weird financial system. It has been astonishingly reliable in that role in the past.

But this time, who knows?

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VSL says 15 years ago

Folks,

I have still NOT got the Petition Letter format, so I will NOT be bringing it to tonight’s mtg. I will, however, bring the Attendance List register.

FYI, a reporter from Today (Cheow Xin Yi) just called me enquiring about tonight’s mtg. She wrote an article in today’s Today paper. She plans to cover the mtg.

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Parka says 15 years ago

HSBC published some FAQ relating to Minibonds

http://www.hsbc.com.sg/1/2/miscellaneous/minibond-notes-frequently-asked-questions

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yin says 15 years ago

This is an excellent question to ask! Which reinforces the notion that these Minibond and HN5 products are safe and of a low risk.

=> Sorry it does not reinforce that those retails products are safer or of lower risk. It is a different issue and something an aspiring world class financial hub needs to reassess.

Greed? No, people who bought the products merely wish to be prudent and get a return that will keep pace with inflation. Greed would be to risk money on, say shorting stocks on the exchange. The irony is that if you did the latter, at least you still end up with something!
=> Yeah greed might sound too strong in this context, but certainly, people were looking for higher yields and the distributing banks are looking for chunky fees as well, which led to need for riskier products with higher potential returns

That’s why banks did not adequately protect their customers, and MAS did not do its duty to investors. Even now, MAS will only direct all queries to FIs and advised the posting of FAQs by FIs. Come on, MAS, are you being serious and credible?

=> It is obvious we need tighter product scrutiny, better regulations and definitely more education on financial instruments and investments.

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CB says 15 years ago

I think all these “junk” notes are designed by the Lehman Brothers to con unsuspicios investors, they have all the corners coverd that there is nothing we can do about them, the best thing is to go back to LMB and pull out all those excutives, they have all been fatten by these scams and just declared bankcrupt and leave all the “shits” to us. They should be responsible since they are the masterminds….

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mini-bomb says 15 years ago

Useful Info Relating to Note Series Issued by Beryl Finance Limited

Dear Layman Brothers

I found something on Fitch Ratings which may be useful for us to understand a bit of those note ratings.

Searched for Beryl Finance Limited Series and got following results:

Beryl Finance Limited Series 2005-10 HONG KONG

Beryl Finance Limited Series 2005-11 HONG KONG

Beryl Finance Limited Series 2005-12 HONG KONG

Beryl Finance Limited Series 2005-14 HONG KONG

Beryl Finance Limited Series 2005-15 HONG KONG

Beryl Finance Limited Series 2006-10 HONG KONG

Beryl Finance Limited Series 2006-11 HONG KONG

Beryl Finance Limited Series 2006-12 HONG KONG

Beryl Finance Limited Series 2007-1 JAPAN

Beryl Finance Limited Series 2008-11 HONG KONG

Beryl Finance Limited Series 2008-12 HONG KONG

Beryl Finance Limited Series 2008-13 HONG KONG

Beryl Finance Limited Series 2008-16 HONG KONG

For those Hong Kong victims, click on the related series, you can see the rating of your series. it seems that most of them are rated B to CCC. Don’t know why there is no list of SGP series. Suspect that most likely are rated as the same garbage as our HK brothers’ notes, if not worse.

There are also 2 articles on the same webpage which our Layman Brothers may be interested in:

Fitch: Implications of Lehman Bankruptcy on Global Synthetic CDOs

Fitch Downgrades Beryl Finance Ltd’s Series 2005-10, 2005-11, 2005-12 and 2005-15 Notes

but I cannot access to the articles as I am not a subscriber.
The page link is here:

http://www.fitchratings.com/corporate/search/results.cfm

hope experts such as del boy and lionivestor may enlighten us further.

many thanks.

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Choon says 15 years ago

I had the Financial Planner Asalysis and recommendations form with me. Look through and only mentioned credit linked noted to7 companies named.

Maybank financial planner sign on it. This show that they do not know what they selling.

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Choon says 15 years ago

I had the Financial Planner Asalysis and recommendations form with me. Look through again and only mentioned credit linked noted to7 companies named. No lehman’B at all.

It sign by Maybank financail planner.

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burntoast says 15 years ago

I thought all conversations are supposed to be automatically recorded by banks/stockbroking houses?

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ALVIN says 15 years ago

i think it is no point writing letter to CEO one they also protect the interest of their company

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ALVIN says 15 years ago

can some one here explain what is underlying securities and the importance of it ??

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Jan says 15 years ago

Message for those of you attending the meeting at 7pm today :

Lye and I may be late for the meeting due to some urgent matters that just came up. Mr Lingam has kindly agreed to be the contact person in our absence.

If you can’t find the group at the library (just outside HANS Cafe), you can contact Mr. Lingam at mobile # to ask for directions.

Thanks and looking forward to meeting all of you this evening !

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ALVIN says 15 years ago

if i have a sound recording of what is said during the deal i make sure they eat back their words !!!!!

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ENGEL says 15 years ago

Alvin, think there is no point contacting the FI as they will shed away their responsiblities. Guess we have to help ourselves. Just hope that something will happen after a petition is formed. To All, any latest update pls let us know here. Thanks !

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ALVIN says 15 years ago

just got a call from a officer in HLF, the place where i brough my bond from regarding the complain i make to them yesterday, she called then tell me that if there is updates on the bond they will call me etc…. and she say that her staff who sold me the bond did tell me the lehman brothers is the arranger, swap gurantor and so on i tell her no she say yes, no point in complaining to the FI , complain to MAS better!!!

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ENGEL says 15 years ago

Just received a letter from HSBC Trustee (undated), mentioned that Minibond Series 5&6 interest due on 22 Sep has not been paid . Such failure to pay on this date will constitute an event of default under the respective terms of those notes in the event that the payment default continues for a period of 15 days oer more. Although they indicated that it does not itself lead to an event of default under any other note, looks like all will be ended with the same date.

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burntoast says 15 years ago

yin = Why are simpler, straight forward plain vanilla bonds sold in SGD 250,000 min denomination? Man on the street are not able to purchase these bonds (with higher coupons) as they require a big upfront amt.

This is an excellent question to ask! Which reinforces the notion that these Minibond and HN5 products are safe and of a low risk.

yin = So what other avenues do these retail investors turn to to get higher yielding products? They turn to retail notes. The greed for higher yields = need for banks to structure products with higher risks = Packaged CDS.

Greed? No, people who bought the products merely wish to be prudent and get a return that will keep pace with inflation. Greed would be to risk money on, say shorting stocks on the exchange. The irony is that if you did the latter, at least you still end up with something! That’s why banks did not adequately protect their customers, and MAS did not do its duty to investors.

Even now, MAS will only direct all queries to FIs and advised the posting of FAQs by FIs. Come on, MAS, are you being serious and credible?

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Unfortunate says 15 years ago

It was mentioned in Tan KL blog that we have to write to CEO of the financial institution to register our complaint that we are not duly informed that our money is at risk if the issuer (LB) default or now go bankrupt. Did anyone of you out there done that?

Have signed online petition and encourage to see that we have gather a force now (more than 310 signatures right now).

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yin says 15 years ago

I have been selling Structured Products for 8 years – mostly to finananical institutions.

I have been wondering how on earth could packaged CDS be sold in small denominations of SGD 5,000 to man on the street.

Even less complex equity linked structures, when sold to Private banks require the end investors to be sophisticated/accredited investors – supposedly to mean people who are more investment savvy or have financial advisors to help them out.

Then it brings me to the point: Why are simpler, straight forward plain vanilla bonds sold in SGD 250,000 min denomination? Man on the street are not able to purchase these bonds (with higher coupons) as they require a big upfront amt. So what other avenues do these retail investors turn to to get higher yielding products? They turn to retail notes. The greed for higher yields = need for banks to structure products with higher risks = Packaged CDS.

How were the sales force selling these products? Are they trained or even licensed to sell them? Maybe MAS can consider introducing specific licensing for structured product sales going forward.

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Del Boy says 15 years ago

Foolishinvestor

Hindsight is such a beautiful thing ! had we knew, we would have dump all our money in the property market back in 2006 !

Allow me to answer your question this way. You are not foolish at all ! Here is why – I’m afraid it is a very sad irony though.

Had you given the choice of either buying Minibond or a bond issued by an Indonesian bank, you would pick Minibond every time without blinking an eyelid. But had you bought the debt issued by the Indonesian bank, right now, you would still get pay (good) interest and good chance of getting all your money back upon maturity.

Don’t ever ever let anyone tell you that you are greedy or foolish ! These stuffs did not have a good return (300bps ?) and should not cost you all your savings.

MAS should not had allowed these stuffs to be sold in the retail network in the first place. Period.

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ENGEL says 15 years ago

Alvin,
That’s exactly my same questions when I called the adviser from GYC, non of the entity is mentioned as LB. I also did inform her that the monies are partially from my mum’s savings and we preferred low risks products when she asked me to invest in unit trusts ….. but see what happened now ?

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burntoast says 15 years ago

Repition of signatures – I believe petition creator (tan kin lian) should be able to de-dup the list – take out the duplicates. I’m surprised there are not more signatures

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ALVIN says 15 years ago

have already signed on the online petition by TanKL
up to now there is 310 signatures and i seriously hoped that people do not repeat their signatures again and again becaused this may cause some problems if authorithy look into this and signatures are repeated thanks alot.

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JC says 15 years ago

The problem is the adviser who was selling me the Minibond series 3 doesn’t even know what she was selling! The following is my question to her back then (cut and paste from email):
1) I understand the bond value is subject to the “credit event” of the reference entity, i.e. the banks listed in the prospectus. Does it mean that if any of the banks default on the payment of the bond then it will affect the value of the bond?

Her reply:
Quote
(1) Yes, as in all investments, there are investment risks even in bonds, as presented in the Pricing Statement.
unquote

The fact as we all know now, this got nothing to do with bond!!!

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ENGEL says 15 years ago

Not able to attend the meeting this evening, as know of it ony last minute. Please update the details. Really appreciate all for the help !

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Patrick says 15 years ago

Article update from Bloomberg –>

Asian Regulators Pledge Action After Lehman Protests

http://www.bloomberg.com/apps/news?pid=20601080&sid=a.bIQfrwxlDE&refer=asia

…..

Singapore Pledge

The Monetary Authority of Singapore pledged to punish financial institutions found to have misled investors in structured products. “Where we have clear evidence in the current matter that a financial institution has breached our laws or regulations, we will hold the financial institution to account,” the authority said, without saying whether it has found examples of malpractice.

The Singapore authority also said it will enhance education schemes so that investors better comprehend risk and returns and don’t buy products they don’t understand.

Tan Kin Lian, former chief executive at NTUC Income, a Singapore insurer supported by trade unions, said on his blog that he is seeking help to draft a legal statement that investors in credit-linked securities can use to settle claims with financial institutions.
……

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Del Boy says 15 years ago

Lion Investor,

To answer your question.

Zircon should worth something in today’s market conditions, but no way near par. For all intents and purposes, Zircon is similar in structure as Minibonds. The valuations depends on the following factors :

1) maturity -2012 is worth more than 2015, 2017 etc.
2) how many financial names are in the portfolio. The more it has the less valuable the deal is. This is my best guess – 100 RFs in the Zircon portfolio, there may be 10 to 15 names that are financial institutions. AIG is almost certainly in there.
3) Whether the tranche was rated A or AA on the issuance date. In simple terms, the higher the rating, the less it will be affected by the present worsening conditions of the portfolio
4) Most important of all, the underlying securities that back the Zircon deal. If Lehman dumped toxic waste like US sub prime mortgaged back securities in these deals, the value will of course be affected tremendously.

Without all the relevant information, my best guess is 50cents. Valuation is one thing, whether there are any biders out there who would buy them right now from PwC is entirely differnt proposition altogether.

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Bouncee says 15 years ago

It looks like many Singaporeans bought the minibond series. Just two months ago I bought the minibond 9 after being told that it was a very safe investment. Sad to think of it my hard earned money will soon go ‘kaput”.

We need to get ourselves together and make noise so that it could be heard loud and clear. “WE WANT OUR MONEY BACK’

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Ang says 15 years ago

I have not received any letters from anyone regarding Minibond Series 3. I understand I should be getting the letter dated 15 August 2008 at least. I got my minibond from OCBC Securities and the Minibond is reflected in my CDP. Many thanks to Lioninvestor and others here that provided us with so much info and support. Any others not receiving your letters?

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Choon says 15 years ago

Hi All,

Only 259 signatures at 1059hrs 24 Sep2008.

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burntoast says 15 years ago

I posted this in ST Forum:

I think posters who talk about greed and so on should note the difference between investors (and I use this term advisedly) who put funds into a 5-year product like HN5 (and Minibond), and betting on shares in the stock exchange. Whilst the latter can also be a form of investment, I would challenge anyone to argue that HN5 and such products are meant to be anything other than as low-risk investments (given the relatively modest returns and long timeframes). The fact that they did not turn out to be low in risks must surely indicate that they have been misrepresented (never mind whether investors understood all the convoluted legalese).

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SH says 15 years ago

VSL
Thanks. Meeting with CEO HSBC is tonight at 6pm at Collyer Quay (nearest MRT is Raffles Place). Meet at the entrance.

Lye / WS – can you come and then you can brief the rest at 7pm.
I’ve emailed the petition to MAS to Lye. Pls print out and let people sign tonight. This petition is in addition to the online one at tan kin lian’s blogspot.

Up to 5 can go for tonight’s meeting. Anyone else who wants to attend, pls call me at 6483 5629 or reply to this forum. Those who have a lot at stake, pls – this is your chance to hear from the horses’ mouth on your best chances. Do take some pro-active action to recover your money. Lion Investor who has some expert knowledge on financial products is welcome to attend too.
Thanks.

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Patrick says 15 years ago

i’ve signed the online petition too.

btw yesterday a Today’s reporter called me after she visited Mr Tan’s blog….she was informed of today’s meeting and our discussion over here.

lets see how it develops from here…..

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SH says 15 years ago

WS, Lye,
I sent a email to Lye yesterday. There’s no reply. Did u receive? Pls respond to me. I have been calling MAS. They have referred to HSBC and the CEO of HSBC has agreed to meet with me. Who would like to come (date/time can be arranged)?

WS- pls give me your email also.

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headwind says 15 years ago

I’ve also invested $100K in Minibond Series 2. Thanks for all the updates posted here as the distributor bank is not communicating very much to be of help. Have also contacted HSBC Ins Trust but it appears it would only step in as a last resort. Will try to attend the petition meeting. Have also signed up in PetitonOnline (Tan Kin Lian’s blog). I’m disappointed that MAS isn’t acting proactively in our interest.

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Jasmin says 15 years ago

As I can’t attend the meeting at 7pm Central Library, I have signed the online petition http://www.petitiononline.com/CLSINVES/petition.html

(total 151 signatures at 7am 24 Sep2008)
Thanks.

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patrick says 15 years ago

BACK DATED, UNSIGNED LETTER FROM MINIBOND LIMITED

Hi everybody,

I believe all holders of Minibond Series 1,2 and 3 have received a ‘vague’ letter dated 15 Aug 2008, informing them …’the Issuer has substituted…EXISTING Securities with NEW Securities…’

(Note: 15 Aug 2008 is 1 month before Lehman Brothers filing for Chapter 11.)

One paragraph of the letter says:

” As of the date of this notice, the NEW Securities shall become the Securities forming part of the Mortgaged Property of the relevant Series of Notes and be subject to the security created in favour of the Trustee by the relevant Trust Deed. Based on the representations and warranties of the Issuer to the Trustee relating to the substitution of the New Securities for the EXISTING Securities, the Trustee is satisfied that such substitution is not materially prejudicial to the interests of the relevant Noteholders and has agreed to such substitution. The Derivatives Counterparty has given its written consent to such substitution. ”

Any legally-trained persons can provide an interpretation to the contents of this letter? Thanks

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mini-bomb says 15 years ago

mine is also listed in my cdp statement.

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mini-bomb says 15 years ago

crying babies will always have more milks to drink. hongkees have set up a good sample for us. dont think MAHK would act so fast without hongkees prior loud voices. let’s get together, we shall have our own loud voice to wake MAS up as well.

MAS, dont pretent to be a sleepy beauty, we are not princes but a group of poor victims being cheated by those blood-sucking foreign financial institions ok? do act like our own anthority on behalf our SGP people. dont force us going to the Speaker’s Corner. otherwise, you will be really not beautiful:(

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VSL says 15 years ago

Folks,

Just checked and realised that quarterly interest for MB 3 was paid out on 2-Sep-08. LB filed for bankruptcy on 15-Sep-08, so this dividend was paid out just before the bankruptcy action started. So I guess MB3 is still in play.

Will have to wait till 2-Dec-08 to see if another quarterly dividend is paid out. If dividends continue to be paid out every quarter for the next 1 yr or so, then I believe we may have ridden the storm. I hope my analysis is correct.

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AHKONG says 15 years ago

There are two emails of SPH’s reportors who report on Minibond on today ST’s pg A10.

reportor can press for infor and comment from authority and drew more public attention to the issue.

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andrew says 15 years ago

i just signed it, till now about 110 signatory……seem not loud enough…

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Bad Dream says 15 years ago

In case anyone would like to meet our MPs, here’s the site with place, time and dates for your easy reference.

http://www.pap.org.sg/contact.shtml

Please meet tomorrow at 7pm and sign on Tan Kin Lian’s blog.

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Henry says 15 years ago

Hi all,

I just signed the Tan Kin Lian’s blog petition. Till now there are only 31 signatures, i don’t think there are so few of us. The voice is not loud enough. Plse i urged more people to sign, it’s our blood-sweat money.
I cannot join you guy tomorrow 7pm as i will be in malaysia for work purpose. But if i’m needed to sign another hardcopy petition for mas or so, i can do it on this saturday or sunday. My email is [email protected]

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lye says 15 years ago

Hi All,

Mr Tan Kin Lian blog has created an online petition for all
credit link securities investors(Minibond, DBS High Note, etc).

Please sign at

http://www.petitiononline.com/CLSINVES/petition.html

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Bad Dream says 15 years ago

Please make an effort to come. It’s alot of $$$ at stake. The more the bigger the voice. Please come and thanks for arranging this!

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WS says 15 years ago

Please note :

We will meet inside HANS Café (#01-01) at the Central Public Library tomorrow at 7pm.

Thanks to tan for his suggestion.

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Ahthong says 15 years ago

Hi just wanna confirm, which part or level of Central Library to meet at? Thanks.

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E.K.YAP says 15 years ago

When the parent company (US) I worked for filed for chap 11 in Oct 2005, I found out if the supplier to us is not a US entity, our parent company can pay them first for all the money we owe them, but not for the US suppliers, or foreign company that has an asset in US. Does HSBC Trustee has any asset in US?

My parent company still running per normal until today, we still have not emerge.

I bought the Minibond Series 7 from HLF, I remembered the FPM told me the Minobond is safer than putting money in HLF.

Can we sign the petition at Hong Lim Park? Lunch time? or 7pm to 8pm?

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j_asmine says 15 years ago

Can you imagine with a A you are considered as lousy what to say B-? It’s junk!

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WJ says 15 years ago

Found this info regarding the underlying security of the minibond series 5 that I own:
Zircon Finance Limited Series 2007-12:

http://www.fitchratings.com/corporate/ratings/issuer_content.cfm?issr_id=85702673&grp_typ_id=7&mm_id=&sector_flag=5&marketsector=2&detail=2&body_content=issr_list

can anybody explain what’s the meaning of “3 Month LIBOR + 80bps” Coupon Rate?
And how risky is B- rating?

Thanks

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lye says 15 years ago

Del Boy,

thanks a lot for taking the time to share your expert advice.

Do keep us updated with the latest info.

——–

I will compile a new mailing list and send out tonight.

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Del Boy says 15 years ago

This is more or less of what I suspected – Lehman was recycling a lot of their products around the region. This Zircon Finance is again a Lehman’s SPC whose purpose was to issue similar structured credit linked notes and CDOs to Australians retail and institutional investors. I remember vaguely that Zircon deals were managed by a Singaporean firm called Lion Capital Management.

Holders of Series 5 + 6. Don’t panic. I have read the HSBC notice you posted here. It is bad but is not as bad as it sounds. There is still hope you may recover most of your money . The key word here is “potential” event of default, which is due to missing interest payment on the due date (Lehman as swap counterparty stopped paying because of its bankruptcy). The good news is HSBC as trustee seems to be doing their job. Looks like they are buying time here so that an acceptable solution can be found other than doing a forced close out right now, where Zircon collateral is sold for x cent on the dollar. How much is this Zircon deal is worth right now ? This is an investment grade synthetic CDOs, my best guess would be around 50-60cent, but it depends IN TURN what the “underlying securities” are in the Zircon deal.

Acceptable solution ? I think only MAS can help you by applying a lot of pressure on Nomura (they have alot of money and want this business).

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Collective Action says 15 years ago

http://tankinlian.blogspot.com/2008/09/investors-of-credit-linked-securities.html

Mr Tan Kin Lian is organising a collective action for Investors of Credit Linked Securities.
You can send your particulars to him at [email protected].

He will look for some lawyers to help us.

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WS says 15 years ago

Hi All,

I am posting this message on behalf of Lye for those of you who are not on our email list.

We will be meeting in a group tomorrow night to discuss the action plan related to the minibond issue.
Date/Time : Wed., 24/9/08 at 7pm
Venue : Central Public Library, 100 Victoria Street

SH – can you please print and bring along a few copies of the petition for us to sign (a petition will be submitted to each of the authorities).

Thanks and we hope all of you will support the group by turning up.

p/s. please send your name and email address to Lye at [email protected] if you wish to be included in our email list.

How to get to Central Public Library :
Nearest MRT: Bugis MRT Station or City Hall MRT Station
Bus stop (North Bridge Road ): SBS 145, 197, 32, 51, 63, 7, 80 175 and SMRT 851, 61
Bus stop (Victoria St -Allson Hotel) : SBS 2, 7, 12, 32, 33, 51, 63, 80, 175 and SMRT 61
Bus stop (Victoria St -Bras Basah Complex) : SBS 2, 12, 33, 130, 133, SMRT 960, NR7
Bus stop (Victoria St -St. Joseph’s Church): SBS 130, 133, 145, 197, C3, SMRT 851, 960, NR7
Bus stop (Middle Rd – Nam Peng Building) : SBS 56, SMRT 980

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Chan Pui Fun says 15 years ago

Is the meeting tonight at 7pm confirm? Where exactly?

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ALVIN says 15 years ago

i am staying in the north can i help in anyway ????? TIME is running out

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mewdeedi says 15 years ago

i suggest we go seek help from opposition party aso. they will definitely take the case up n hopefully force MAS and/or relevant authorities to take action.

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SP says 15 years ago

Looks to me that most of the victims here are not holding series 5 & 6. I wondering is it due to these 2 series lesser victims or majorites of these holders are uncles and unties who don’t even know how to surf net and also don’t know how to lodge a compliant? By the way, the petition is for all the series or just a particular one?

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Parka says 15 years ago

1. Why not just meet at two specific time just to sign the petition once and for all. The second timing for those who miss out on the first. Like that tomorrow afternoon can hand deliver it to MAS.

2. Or people just print out the petition and get those living nearby to sign. Consolidate at a time tomorrow before hand delivering to MAS.

I can volunteer to collect the signatures at 3-4pm City Hall Starbucks. But someone has to pass it to MAS because I’m working afterwards.

Tuesday (23rd) night or Wednesday morning can have another person collect signatures before passing to me at 3pm.

So tonight can get the signing go ahead already.

What do you guys say? Can get some volunteers?

—-

People meeting lye can sign also.

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kean says 15 years ago

OK, i would like to participate the petition.

the agent GYC showed me a very lovely picture of the minibond and siad the risk was very very low.

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ALVIN says 15 years ago

we must act fast before all the other series kana liquated it is just a matter of time before HSBC publish news of other series just like series 5 and 6 in today newspaper

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SH says 15 years ago

Hi all,
I thought I would print out the petition letter and leave it at HSBC Collyer Quay Br for 2 day so that everyone can go and sign it. I don’t mind collecting all the signatures myself but my office is quite far from town and incovenient for most. Guess what? I made the request to HSBC this morning to leave it at their counter and they turned me down!! They can’t even do this simple act to help us. Guess we have to help ourselves. My suggestion then is – is anyone’s office in town and don’t mind helping to collect the signatures?
Lye – you have been very proactive. What do you think?

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Elsie says 15 years ago

Hi,

I would join if you guys are going to MAS. Let me know the date/time.

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Naive says 15 years ago

I’m one of the minibond victims as well. Sank in more than $100K investing in minibonds. Regret terribly that i did not diversify, thinking that the product is very safe and i have already “diversified” as reference entities for all series are different. Have even persuaded my dad (who’s a retiree) to invest in the latest series 9.

For me, the ignorance stems from my trust in my Financial Adviser, who has a friend since school days. I trusted her words that it was a safe investment, suitable for non-risk takers like myself and at the same time, who is willing to wait for a longer term horizon for the payout.

When LB’s bankruptcy was first announced, I had received a call from my Financial Adviser who assured me that even though MB needs to be unwound, my principal would not be affected…so, i think she herself fails to understand the intricacies of the product, let alone non-professionals like us.

Just called HSBC trustee. Was given a “no comment” reply for almost all the questions i asked. The rest of the replies are all scripted…like they will consider what is in the interest of the notes holders blah blah blah…

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Henry says 15 years ago

i went to their wbe, can’t find the hsbc news. can someone post the link or copy the news and paste it on this blog plse.

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Parka says 15 years ago

Here’s the HSBC notice. Published on 23 Sep 2008 The Straits Times.

The page is big, I split the notice into two.

http://i150.photobucket.com/albums/s112/zalesboard/otherforums/20080923-minibond-hsbc-notice_s.jpg

http://i150.photobucket.com/albums/s112/zalesboard/otherforums/20080923-minibond-hsbc-notice2-s.jpg

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lye says 15 years ago

Hi all,
I will be meeting up with a group of Minibond victims at Bugis National Library at 7pm, to discuss what action we need to take. All are welcome.

I think calling MAS or HSBC is not effective. We have to go down personally.

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Parka says 15 years ago

Has anyone been calling MAS? What did they have for updates regarding the banks? Specifically actions they have already taken and the results. The banks don’t seem to have made any progress.

I just called MAS and the lines are all busy.

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jason58 says 15 years ago

Please count me in for the update on LB series progress.

So far i can’t recall the bank ever mention anything on ‘swap’ or ‘underlying security’. They mentioned that if anything will affected will be default from any of the ‘reference entities’. The ‘ reference entities’ are those who need the money and LB help them to collect and distribute to their need. The Bank are paid for 3% upfront from the minibond sold. (3% are from LB). Our MAS & FI are not mature to handle such problems. Wonder how they can have their dream to become FINANCIAL HUB in Asia. eg. When things happen, keep silent. (this is not the 1st time, last time, the clob issue. what have they learn & protect the investor??).
HK is more proactive in this industries.

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lye says 15 years ago

ST papers announced today series 5 & 6 have defaulted. Notes likely to be liquidated.

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Jasmin says 15 years ago

Mr Tan KL has sent a message to some lawyers to seek some help/advice for us.
http://tankinlian.blogspot.com/2008/09/affidavit-for-investors-of-credit.html

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sianz says 15 years ago

any one going down to MAS ?

pls sms me 92746311.

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Jasmin says 15 years ago

I emailed to the one who sold me LB series 2 at Maybank. I received no reply.
When such things happened, we have nobody to turn to for help and advice.
Maybe it is better to put my money under my pillow than anywhere else.
It is really sad and cold-hearted to see such a bleak situation.

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ALVIN says 15 years ago

no use complaining to the bank one la i call my bank and they listened to my complain, and afterwards they ask the person who sold me this minibond 9 to call me back and say rubbish !!!! i think complain to MAS is the best way out !!

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ALVIN says 15 years ago

WTF i make a call to the FI i brought the minibond at to complain and the person who sold me the bond call me back and say that she did mention lehman brothers is the arranger and so on, i can confirm she did not even mention the word ” LEHMAN BROTHERS is the arranger in the whole deal””” damn pissed off now

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Leon says 15 years ago

I’m also a victim. The broker I bought from keep saying it is save and they keep telling me it is buying into investment grade bonds.
Since the interest is lower than those high risk instrument, I assumed it is quite a safe investments.

I want to join in the petition. how could I do that ?

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Simon says 15 years ago

Tried to call up the financial advisor who sold me the Minibond series 5 on behalf of Maybank. Mr Chris Zheng Yuanhui picked up his mobile phone and agreed to call me back in 30 minutes time as he is out buying breakfast. He also revealed that he is no longer working with Maybank and currently works with OCBC. After a long wait, I tried calling him again and there was no response from him. What I can say is that he is trying to avoid the whole issue.

By lodging a complaint with the banks, will it helps to solve the issue on misrepresentation made by those financial advisors? I really hope that banks will not adopt Mr Chris Zheng behaviour.

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