| NEWS ARCHIVES |
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| Partial refund for Lehman Minibond holders |
| 1 Oct 2009 |
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Investors still holding on to the failed Lehman Brothers minibond notes will be getting some money back.
Receivers of the minibonds, PricewaterhouseCoopers or PwC, say they have gained control of the underlying collateral through an agreement with parties such as the Lehman Brothers Special Financing, which is the Swap Counterparty.
They can now start the process of getting the residual value of the notes series 1 to 3 and 5 to 10 without going through litigation.
It's understood that a big global investment bank will be appointed by this week to liquidate the collateral.
PwC says the amount to be given to the noteholders may vary significantly, depending on the series and tranches held.
The payment may be done as soon as a few months.
PwC says the eventual amount of funds to be given to the note-holders will depend on several factors, including the agreed payments to Lehman Brothers Special Financing.
PwC says it has been working with the trustee, HSBC Institutional Trust Services, on this matter.
One of the receivers, and a partner at PwC, Dominic Nixon, says that this settlement provides certainty to the noteholders that at least some of their initial investment will be recovered.
He said without the negotiated settlement, the receivers would have to pursue a complex, costly and lengthy litigation process without certainty of recovery.
This development is expected to affect 7,800 minibond retail investors who collectively invested some 373 million dollars in the product.
American bank, Lehman Brothers, collapsed last September when the sub-prime problem in the US brought the world economy to its knees.
And the fate of the Lehman Minibond Note Series was then left in limbo.
In a separate statement, the trustee of the defaulted minibond notes, HSBC Institutional Trust Services, says that after careful consideration, it has accepted the receivers' recommendation to settle with Lehman Brothers Special Financing.
The trustee says noteholders will be receiving formal notification of this development. |