Tan Kin Lian's Blog: Pinnacle Notes

Saturday, September 20, 2008

Pinnacle Notes

Hi Mr. Tan,
I invested in Pinnacle notes series 6. The arranger is Morgan Stanley and the 6 reference entity are Bank of America, Citigroup Inc, DBS, Singtel, OCBC and UOB.

Should I continue to hold on to the notes or cash out? If I cash out now, I will get only 34.07% of our total principal. I know that the health of Morgan Stanley is crucial to the survival of this Note. With so much uncertainty in the market, is it better to take a loss now?

REPLY
In my view, and it is just my guess, Morgan Stanley will not face the same fate as Lehman Brothers. The six reference entitles appear to be all right. The rescue package being arranged by the Fed and Treasury in USA is likely to prevent other big failures. It is not worth while to sell the Pinnacle Notes at a loss of 65% at this time.

10 comments:

Anonymous said...: Dear Mr. Tan,

Events at Morgan Stanley had taken a turn recently.

Moody's put Morgan Stanley's A1 long term rating on review for a possible downgrade.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aituW9GoW5Ww&refer=home

With recent (Friday Oct 10) fall in MS's share to below $10, investors are worried if the original deal to sell 21% stake at $25.25 a share to Mitsubishi UFJ on Oct 14 will be affected.

http://www.bizjournals.com/sanjose/stories/2008/10/06/daily87.html

Today, I spoke to a staff from HL Finance incharge of Pinnacles Notes and was told that if I redeemed my Pinnacles Notes S6 now, I will sustain huge losses on my invested capital due to the ongoing credit crisis now.

He had advised me to hold on to my investment till maturity to avoid significant losses.

What's your view on Morgan Stanley now?

- Mr Tan; October 10, 2008 11:49 PM
Anonymous said...: I would like to add:

For HL Finance customer equiry on Pinnacles Products, you can call:

64159327

- Mr Tan; October 11, 2008 12:50 PM
Anonymous said...: SAN FRANCISCO (MarketWatch) -- Morgan Stanley may benefit from the U.S. Treasury's latest plan to buy equity stakes in financial institutions as the investment bank awaits a crucial $9 billion investment from Japan's Mitsubishi UFJ.

http://www.marketwatch.com/news/story/treasury-mulls-investing-banks-morgan/story.aspx?guid=%7B9FE0351F-B483-4112-A882-ED09CCFF59BF%7D&dist=msr_5

- Posted by Mr. Tan; October 12, 2008 12:04 PM
Anonymous said...: Mitsubishi and Morgan Stanley Renegotiating

http://www.nytimes.com/2008/10/13/business/13morgan.html?em

- Mr. Tan; October 13, 2008 10:41 AM
Anonymous said...: dear mr tan,

with the us government and ufj mitsubishi bank injecting funds to take any equity stake in morgan stanley, is it still safe to hold on to the pinnacle notes? it's at $0.38 las week. i'm worried about the underlying securities. need your kind advise plse.; October 15, 2008 10:52 AM
Anonymous said...: My mum is a chinese-educated victim above 65 yrs old. She, like many others, were duped into buying PN 6 by the RM with empty promises of "guaranteed" and "stable" when she went to the bank to renew her FD. Her total amount cheated was $100k.
We followed the recommendations given by dear Mr Tan Kin Lian, wrote a letter of complaint of mis-selling, and after a gruelling wait for 1 year, 2 interviews, sleepless nights, the FI only offered my mum 50% compensation. 50% of the PN6 they force us to keep. If we don't accept their offer out of their so-called "goodwill", and go to FIDREC or the courts, this offer won't be open anymore. So basically, they have played a game such that the compensation offered is quite "attractive" but it still makes us feel very pinched and punished for their crimes.

As the FIDREC is only in jurisdiction of amounts $50k and below, I am hoping people (or similar victims) or Mr Tan who read this forum can give me some advice.
1. This is retirement money for my mother. She cannot read English, signed the forms without even bringing her reading glasses. I don't know how strong is her case, but the S.O.B RM told her that this is just like FD with a longer tenure. She was completely and innocently duped into buying this crap.
2. Did FIDREC ever help any of you investors obtain a claim greater than $50k or >50%?
3. Is this FIDREC just some other scam by the PAP to show that they are sort of "upholding" the law, helping the victims, yet in fact it is just another puppet organization who is out to pocket some money from the FIs, protect FIs, waste the small investors' time, and cheat their hard-earned money?
4. Has any of the class action suits been successful? How much money do we need to spend to engage a lawyer? Estimated costs if we lose? Will we get back an offer similar to their current offer?
5. How likely is PN6 going to enter a mandatory redemption? What is the redemption value for the rest of the PN that have gone through a mandatory redemption?
6. What is the rate of compensation for most victims? Did anyone receive compensation > $50k before? Could everyone share?
7. Do you think we should just accept their offer and let the matter close?; February 22, 2010 3:15 PM
Anonymous said...: Today June 18 2010, Morgan Stanley informed investors both Series 6 & 7 have collapsed due to mandatory redemption. So those who had hope that they can hold on till maturity to collect principle have been rudely awakened. Fiderec contract staff will be happy their job will be extended with new complaints.; June 18, 2010 10:33 PM
Anonymous said...: Hi,
Can anyone advise:
- What are the options available for investors?
- What had been the result on previous series in terms of compensations from the banks?
- Is FIDREC going to be a helpful channel to address these?

Appreciate any advise; June 20, 2010 11:34 PM
Anonymous said...: Can someone enlighten why it took such a long while till now for morgan stanley to declare mandatory redemption for pinnacle notes 6?
And why do they give the false impression that pinnacle notes 6 is unaffected by continue to give out interest?

I thought the economy is recovering, why is this still happening to pinnacle notes 6? If i was that time when everything was declared gone, i would be able accept better, than now.

Thanks in advance for your reply.; July 03, 2010 2:21 PM
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