Nov 13 2008
HSBC Trust Terminates Swaps of Underlying
HSBC Institutional Trust has informed MAS that they have taken certain steps in the interest of Lehman Minibond noteholders.
They have terminated the swaps of the underlying securities for series 1-8. This will help to preserve the value of the underlying securities.
Also, they have appointed three partners from PricewaterhouseCoopers Singapore (PwC) to act as receivers for series 5 to 8. Their 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.
Separately, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser to provide advice to investors on any potential restructuring of the minibond.
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Hi,
Saw the paragraph relating to series 9 and 10 below:
‘This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.’
What does it means for series 9 and 10? Any ideas?
[Reply]
lioninvestor Reply:
November 13th, 2008 at 9:19 pm
The underlying securities of series 9 and 10 are floating rate notes issued by Wachovia unlike the toxic CDS of the other series, so there are no CDS swaps to terminate.
[Reply]
Alice low Reply:
November 15th, 2008 at 9:33 pm
Hi
The underlying securities of series 9 and 10 are floating rate notes
issued by Wachovia unlike the toxic CDS of the other series,so there are no CDS SWAPS to terminate.
Question 1. What we should do next?
2. What do you means by CDS?
3. What do you means by floating rate notes?
[Reply]
lioninvestor Reply:
November 16th, 2008 at 10:57 pm
1) Nothing much we can do other than the filing of dispute if there is mis-selling.
2) CDS - credit default swaps
Those minibond with synthetic CDOs as the underlying securities would have their CDS terminated.
HSBC trust has indicated that series 9 and 10 do not have any underlying swaps, so it can be taken that the Wachovia floating rate notes do not have CDS.
3) Floating rate refers to the interest coupon on the notes. It means they will be based on certain benchmark - eg LIBOR.