The payout value of the various Minibond series was announced yesterday. Depending on which Minibond tranche you held, the percentage of recovery will range from 21.5% to 70.8%.

Tranche Series Percentage Recovery* (%)

Series 01 Tranche A (SGD Notes ) 21.5
Series 01 Tranche B (USD Notes) 24.0
Series 02 Tranche A (SGD Notes) 62.4
Series 02 Tranche B (USD Notes) 70.8
Series 03 Tranche A (SGD Notes) 55.9
Series 03 Tranche B (USD Notes) 64.0
Series 03 Tranche C (AUD Notes) 47.3
Series 05 (SGD Notes) 29.8
Series 06 (SGD Notes) 40.0
Series 07 (SGD Notes) 59.5
Series 08 (SGD Notes) 63.1
Series 09 (SGD Notes) 57.7
Series 10 (USD Notes) 62.4

I had expected about 50-60% recovery values for the different series and the majority indeed does fall into that range. Series 1 and 5 Minibond holders are the worst off in the amount they are getting. The series with the most number of investors are series 2, 3 and 5.

Payments to the noteholders will be made on 12 February 2010. The actual date that you receive your payment will depend on whether you hold a direct account with CDP or whether you hold the Notes through a nominee account.

More news on this:

HSBC Minibond Announcements

MAS Welcomes Announcement of Distribution of the Recovery Values of the Minibond Notes

Payout for Minibond Holders From 12 Feb (CNA)

Based on the letter from Morgan Stanley about a week ago, each Pinnacle Notes Series 3 investor will get back US$152.51 and US99.23 (to be converted to SGD) for tranche A and B respectively.

This redemption value is based on a capital of US$5000 and S$5000 for tranche A and B respectively. This works out to be about 3% of the original investment amount. Unfortunately, for those who did not know about the exact nature of the Pinnacle Notes, they will be in for a nasty surprise.

POSB Invest Equity Series 1 is a 4-year 11-month Structured Deposit that was recently launched by POSB.

The POSB Invest Equity gives fixed payouts over the term with the potential of a bonus payout if three Singapore blue chip stocks (SGX, SIA and Keppel Corp) perform well.

The fixed payouts are as follows:

• Year 1 : 1.38%
• Year 2 : 1.38%
• Year 3 : 1.38%
• Year 4 : 1.38%
• Year 5 : 1.86%

Assuming no bonus payout, the effective interest rate over the period of the investment is 1.48% p.a. (as given on POSB website).

If the prices of ALL three blue chip stocks are 20% higher compared to the prices at the start, then a bonus payout of 2.5% will be given. With the bonus payout, the effective interest rate works out to be 1.96% p.a.

A minimum of $5000 is required to invest in the POSB Invest Equity Series 1. As this is a structured deposit, the investment will not be insured by the Singapore Deposit Insurance Corporation in the event POSB goes bust.

Briefing Session by Senior Lawyer Mr C Campos on Pinnacle Class Action

To All Pinnacle Investors:

(1) We are pleased to inform you that Conrad Campos (who has already filed a lawsuit for Minibonds investors) has agreed in principle to act for Pinnacle investors as well. With his experience in the Minibonds case, he is eminently well qualified to handle the case for Pinnacle investors. Additionally, we have consulted other legal and financial experts who will provide assistance when/if the proposed class action takes place.

(2) It is estimated that a legal fund of about $4 million is needed for the proposed class action to cover all costs, including adverse costs in the event the case is not successful. To raise this amount we propose that at least 1000 investors join in at $4000/- per investor/per Series. A refund of about 50-70% of the fee of $4000/- can be expected if we win the case. And, if more than 1000 investors join, the fee of $4000/- will be proportionately reduced.

(3) Please note that even if you have received partial compensation from the financial institution (FI) directly, or through Fidrec’s adjudication, you can still join in the proposed class action. This is because the proposed class action will hold only one party responsible – viz. the arranger of the Pinnacle Notes, Morgan Stanley (Singapore). It will not sue any of the FIs.

(4) By doing this, we have legal clarity and a common ground for investors in all the eight Pinnacle Series to sue collectively, regardless of the FI involved. The law protecting investors is clear and opinion received from the experts, suggests that the case has a reasonable chance of success. There is of course no “guarantee” – but it is the only chance we have to seek justice for the enormous loss we have all suffered.

(5) To start the process of getting investors’ support going, Mr Campos has agreed to give a briefing to Pinnacle investors who are keen to form a ‘core group’, so that there can be leadership and coordination as the process gains momentum. An official website for the proposed class action (www.pinnacleclassaction.com) will be launched as soon as the core group is formed.

(6) The briefing by Mr Campos will be held on Friday 30 October, 2009 at 6.00 pm. Venue: Conrad Campos & Company, 30 Cecil Street, Prudential Tower #15-00 Singapore 049712 at the Boardroom.

Kindly indicate your interest to attend by email to: christinatan@camposlaw.com indicating in the subject heading “Pinnacle.”
Attendance will be limited to about 25 people, due to space constraints.

Yours sincerely,
“Pinnacle Action Group”

In what must be the most positive news since the collapse of Lehman Brothers, the receivers of Lehman Minibonds, PwC,  announced that they have reached an agreement with Lehman Brothers Special Financing (LBSF) to obtain the underlying collateral of the Minibond notes. This removes the need for any costly litigation.

PwC has started the process of realising the residual values of the Minibond notes and investors may be able to get back the residual value within a few months. The amount to be given to the noteholders will vary significantly, depending on the series and tranches held.

Investors who have accepted partial settlement offers as part of the dispute resolution process by the Financial Institutions (FI) or the Financial Industry Disputes Resolution Centre would have retained a portion of the notes, and will get to keep the residual value arising from those notes.

This news has no impact on those investors who accepted full settlement offers as they would have already received 100% of their principal investment amount.

More news:

Partial Refund for Lehman Minibond Holders

MAS Welcomes Receivers and Trustee’s Announcement of Settlement for Minibond

Minibond Payback (Straits Times)