HK Investors To Receive 96.5% Of Their Lehman Minibonds Investments Back
The WSJ is reporting this morning....
Full Story at http://online.wsj.com/article/SB10001424052748704396904576226070280557518.html
HONG KONG—Investors in Hong Kong who lost money from investing in so-called Lehman minibonds will receive compensation of up to 96.5% of their investments, up from about 60% agreed to in 2009, banks in the city announced Sunday.
The joint announcement by the 16 banks follows a conditional settlement deal between Lehman Brothers Holdings Inc. and its receivers and trustees to allow investors in Lehman-linked derivatives to recover some of the underlying collateral assets.
Hong Kong lenders sold millions of dollars worth of so-called minibonds linked to Lehman before it collapsed in 2008. The bankruptcy triggered a slump in the value of the products and sparked protests by investors, who complained they had been misled by banks' staff when buying the products.
In July 2009, under pressure from regulators, the banks that sold the minibond products agreed to buy them back from retail investors. The banks spent a combined 6.3 billion Hong Kong dollars ($808.3 million) to pay back about 60% of the original value to eligible investors.
Some investors have continued to demand a 100% buyback, arguing that lenders were mainly to blame for misleading them in believing that the Lehman minibonds were safe investments. Many regularly camp outside branches of local banks with banners and loudspeakers to voice their grievances.
On top of the value of the collateral assets, the banks have also agreed to give a special payment to eligible minibond investors "as a goodwill gesture," according to the joint announcement.