There is a difference between Minibonds and the other credit-linked notes (i.e. Pinnacle Notes, High Notes).
For Minibonds, the credit default swaps did not fail. Only the swap counter-party (i.e. Lehman subsidiary) failed due to the liquidation of Lehman Brothers. PriceWaterhouseCoopers was appointed to arrange for the underlying assets to be released from the swap counter party and tranferred to another investment bank to handle the settlement.
For some notes, such as High Notes 5, Lehman Brothers was named as a reference entity for the credit default swap. The failure of Lehman Brothers caused the entire investment to be worthless.
For the Pinnacle Notes, the failure of a certain number of the underlying assets will cause a substantial or total loss of the investments. The investors have to wait and hope that these underlying assets do not fail. If they do, the investments will also be worthless.
It is not possible for any action to be taken to save the investments in the Pinnacle Notes, except to sell the notes to another party who is willing to take the gamble that it will not fail.
Different series of each credit linked notes are invested in different underlying assets and have different structures. It is difficult to make a general statement regarding these notes.
The Minibond class actions, led by Conrad Campos, are mainly to sue the distributors for failing in their duty to give proper advice to the investors. This is a separate matter from realising the value of the underlying assets.
For the same reason, the Hong Kong settlement only covered the Minibonds and not the other credit linked notes.
Tan Kin Lian
- ► 2019 (1584)
- ► 2018 (1406)
- ► 2017 (1258)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
09/27 - 10/04
- Crashgate - it ain't over
- An honest agent
- RED Portal (15) Property Report
- Free market (11) - Customer satisfaction
- Tough time ahead for US and global economy
- Digital Health Records in USA
- Electronic Medical Record - Singapore
- Marketing technique of property consultant
- Privacy of patient data
- Central Medical Records
- Benefit Illustration for a Life Insurance Policy
- Special treatment for Minibonds
- Free market (10) - Consumer protection
- Difference of 20% in Term Insurance premium
- RED Portal (16) - Nearby Projects
- Bad advice by agents on Term Insurance
- US economy is still struggling
- Minibond holders may get back some money
- Waste in health care
- Swiss health care system
- Book: Bad experience on financial products
- Talk on solving puzzles
- High upfront charge
- Lower return expected in the future
- Slot in cash card to enter and leave car park
- Scam involving Australian property
- Free market (9) - Corporate social responsibility
- Financial innovation that are useful to consumers
- Free market (8) - Access to credit
- Protect the interest of first time home buyers
- Old ezLink cards cannot be used from 1 Oct 2009
- Law professors lobby for consumer protection agenc...
- Financial innovation
- Health care system in Germany
- RED Portal (15) - Rental Rates
- ProTrader - Financial Trading Game
- Impact of a reduction in yield
- Taking a housing loan
- Using bicycle for the last mile
- Accumulation of Savings
- Free market (7) - Lower fixed cost
- Taxation and social services
- Australia court allows claims against Lehman
- RED Portal (14) - Transacted Prices
- Elevated covered walkways
- Free market (6) - Opportunity to work
- Attracting business into Singapore with lower taxe...
- Fair distribution of work
- Rate of pay
- FISCA Assistance to consumers
- Free market (5) - Cooperation, not competition
- ▼ 09/27 - 10/04 (52)
- ► 2008 (2104)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)