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Source:
www.mas.gov.sg |
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Actions Taken to Protect
Interests of Noteholders of the Lehman Minibond Notes Programme |
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MAS has been informed by HSBC Institutional
Trust Services (Singapore) Ltd, the trustee for the Lehman Minibond
notes programme, that in view of current market conditions, it decided
to take certain steps in the interests of noteholders. |
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Specifically, actions have been taken to
terminate the swaps in the underlying securities for series 1 to 8 of
the Minibond notes programme. This removes the risk of credit events in
the underlying securities and helps to preserve the value of the
underlying collateral. This action is not necessary for series 9 and 10
as the underlying securities for these notes are corporate bonds and
have no swaps. |
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Trustee Appoints Receivers |
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The trustee has appointed three partners
from PricewaterhouseCoopers Singapore (PwC) as receivers for series 5 to
8 which have defaulted since the relevant coupon payments were not made
by the due dates. |
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The other series will also default after the
relevant coupon payments are not received by the due dates and the
relevant grace periods have lapsed. The trustee would then appoint the
three PwC partners as receivers for these series. The receivers’ role is
to take control of the assets of these notes and to work closely with
the trustee towards a solution which is in the best interests of
noteholders. |
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Restructuring Options Still Open |
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The trustee and the receivers have assured
MAS that they have not ruled out any restructuring proposals received
from interested parties and that these will be explored for all series
of the notes. |
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To provide noteholders with an
independent opinion on the options that best serve their interests,
MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF)
as an independent financial adviser on the Lehman Minibond notes
programme. Andrew Grimmett and Tam Chee Chong head the DTCF team.
MAS has asked DTCF to assist noteholders in three ways: |
a. First, to work closely with the
trustee and receivers to explore restructuring options. DTCF will
consider the proposals that have been submitted by financial
institutions and any modifications that may be necessary;
b. Second, if a viable proposal
emerges, noteholders’ approval would be needed. DTCF will advise
noteholders on the merits and risks of the proposal;
c. Third, if the receivers, in
consultation with DTCF, conclude that restructuring is not viable,
the receivers will proceed to liquidate the underlying securities
and the proceeds will be paid out to noteholders after deducting
any liabilities that are payable. The receivers are mindful that
this should be done in an orderly manner to maximise the
liquidation value for noteholders.
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MAS cautions that restructuring the
Minibond notes programme is a complex exercise which entails the
agreement of several parties and resolution of challenging legal
issues. It would also need noteholders’ approval. |
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These steps will take time. The
receivers would also have to take into account the risks to
noteholders, including the continued credit and market risk to the
underlying collateral. Hence, whether a viable restructuring
proposal will materialise depends on several factors which are not
within the control of the trustee and the receivers. |
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MAS’ Views |
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MAS understands that noteholders are
anxious to know what they should do and what to expect next. At the
moment, there is no action required on their part. MAS and the
trustee will continue to keep noteholders updated on all
developments including any options for them to consider. MAS has
asked the trustee to work towards providing noteholders with an
update on whether restructuring is still a viable option by the end
of the month at the latest. |
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Heng Swee Keat, Managing Director, MAS,
said "MAS has been in close consultation with the trustee and
receivers. We believe that these are reasonable and appropriate
steps for the trustee to take to protect the interests of
noteholders given current market conditions. The appointment of DTCF
as the independent financial adviser is also an important step to
ensure that noteholders' interests are served." |
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Mr Heng added, "Our work on other
fronts, on the formal inquiries and in seeing to the serious and
impartial process of handling investors' complaints, is progressing.
We will provide updates at the relevant juncture." |
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Source:
www.mas.gov.sg Press Release 12
Nov 2008 |
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FrontPage Edition: Sat 15 Nov 2008
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