HK banks agree on resolution for Lehman minibonds

HONG KONG, March 27 | Sun Mar 27, 2011 4:25am EDT

HONG KONG, March 27 (Reuters) - Sixteen Hong Kong banks have agreed on a deal to enable investors in structured products of the now bankrupt Lehman Brothers recover a majority of their investments.

Investors in Hong Kong lost nearly $2.5 billion on structured products, called 'minibonds' offered by U.S. investment bank Lehman Brothers, which collapsed in 2008.

A statement from receivers PricewaterhouseCoopers on Sunday said the agreement was to result in most of Lehman's minibond investors recovering over 80 percent of their original investment from the underlying collateral.

Distribution to minibond investors by the 16 banks, including Bank of China Hong Kong and Bank of Communications Hong Kong, is set for June this year.

Asian-focused lender Standard Chartered agreed to buy back HK$1.48 billion ($192 million) worth of equity-linked products guaranteed by Lehman, Hong Kong regulators said earlier this month. (Reporting by Farah Master; Editing by Muralikumar Anantharaman)

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Comments (1)
hanhoco wrote:
Many Bank of China HK sale managers got their customers in 2008 for catastrophe while many other smaller banks stopped sales of Minibonds in 2008 but all these banks never warned their customers. For most, they bit on their company’s pitch hook, line and sinker. They remained in the dark until it was too late and now are being charged.

Mar 28, 2011 12:14pm EDT  --  Report as abuse
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