Sep 23 2008
Updates on Morgan Stanley Pinnacle Notes
The Pinnacle Notes is a structured product that was issued by Morgan Stanley. Investors who have bought any of the Pinnacle Series might want to note the following:
- Investors will continue to receive their coupons from all Pinnacle Notes Series as the structures are still intact.
- Last Friday, there was a low buyback price being quoted because of market conditions and Morgan Stanley were expecting a huge number of redemptions (which did not happen). The upcoming valuation should see an improvement as credit market would likely have improved as well.
- With respect to the CDO portfolio, there are currently three defaults - Lehman Brothers, Fannie Mae and Freddie Mac. (I’m not too sure whether they are in all the Series). Depending on the recovery rate, the CDO portfolio can probably take 6 - 8 credit defaults.
- To that effect, investors will be receiving an update on their Pinnacle Notes with respect to the number of defaults on the CDO portfolio.
- With the status of Morgan Stanley changing to a bank holding company (making it a commercial bank and allowing it to receive deposits), it will be in a position to strengthen its financial position. This will reduce the swap counterparty credit risk.
Click here to leave a comment.
Thanks for the update. You have done a greater job than my FA who has not given me any assurance since the saga about the minibond and pinnacle notes started.( I am a victim of both products and only now then I know they are called structured products )
Thanks again.
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lioninvestor Reply:
September 23rd, 2008 at 7:02 pm
Hi Peg,
You are welcome.
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Hi there,
Do you by any chance know the ISIN number for this pinnacle notes.
thanks
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Can someone send to me the “Q and A issued by Merrill Lynch” on CIMB’s website. I can’t find it at all. I have invested in this Pinnacle Notes. Thanks.
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Oh, just saw the Pinnacle Notes banner stick on TV news for the Hong Lim Park gathering.
All along, I only thought the Lehman Bros minibonds (which I didn’t buy) were in trouble as featured on earlier news, was shock that my Pinnacle Notes is high risk ?
I bought Pinnacle Notes (series 11) from my Maybank regular Relationship Manager in November 2007. I’m a low-risk saver and only want Principal-Protected investment, thus was being recommended Pinnacle Notes. Never get to read any thick T&C, only have the Brochure in my file, that bold “Principal-protected if held until maturity “. There’s some fine prints below, too fine for my eyes to see or understand…. oh no… I’ve been mis-led…
the Relationship Manager already left the bank a few months back.
What can I do now ? Wait for things to happen ? or make a record with what department ?
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How serious is the pinnacle being affected? I would like to knw more about the pinnacle series 8, how can i found out more?
Please help….thks
Distress Investor
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plse can u tell me what the latest value of pinnacle 5? i may consider to sell it..plse advise me.
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lioninvestor Reply:
October 12th, 2008 at 8:27 pm
Hi Very Sian,
You can check with your distributor on the latest buy-back price.
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Please read on this update… This is positive to MS:-
http://sg.news.yahoo.com/rtrs/20081011/tbs-morganstanley-fed-7318940.html
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Hi, does anybody have information about the 100 reference entities in relation to DBS High Notes Series 1?
Many thanks,
Lay
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hi….sorry, let me re-phrase my question - anybody here has DBS High Notes Series 1. What’s your take on it so far….unsure if I should cash out. But I stand to lose out a part of it if I cash out now.
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Hi lioninvestor,
I have invested on the pinnacle notes series 15. Any information regarding this notes status ?
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lioninvestor Reply:
October 18th, 2008 at 5:11 pm
Hi Kilo,
The best way would be to get the latest information from your distributor. If you do get anything new, I would be appreciative if you could post it here for all to see too.
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Hi lioninvestor,
Any news about pinnacle series 15 and 16?
Guess it is probably the same as for MLJS8. If Morgan Stanley does not go bust, principal is still not affected, right?
BTW,
Like to say once again, I can get much more info from your website than from anywhere else including the RMs and financial institutions who pocketed all that money selling us these products. Guess they will still be enjoying the fat bonuses gotten from the past 1-2 years while the clients may be losing sleep over their retirement funds etc.
A sincere thank you.
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lioninvestor Reply:
October 18th, 2008 at 5:10 pm
Hi Chong do you have the factsheet of Pinnacle 15 and 16?
Every series is different.
Thank you for your feedback.
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lioninvestor Reply:
November 9th, 2008 at 12:23 pm
The underlying assets of Series 15 and 16 are floating rate notes issued by Morgan Stanley. No toxic CDOs or CDS there.
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Andrew Ng Reply:
November 14th, 2008 at 11:13 pm
I have brought pinnacle notes series 15 some months back and also receive the interest payout recently but as you mentioned that the notes are “floating rates notes”
Can you please explain what is “floating rates notes”
My RM mentioned to me something about Singtel.
I hope you can tell me more. Thanks
lioninvestor Reply:
November 16th, 2008 at 11:21 pm
Hi Andrew,
there is no mention of synthetic CDOs in the entire pricing statement of pinnacle 15. So it’s not exactly in the same class as series 9,10, etc.
Floating rate notes means the coupon on the notes is pegged to some standard benchmark. For pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR - BBA plus margin.
Is pinnncle series 2 also linked to a basket of underlying securities? If yes, how many of them already default?
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lioninvestor Reply:
November 16th, 2008 at 11:17 pm
From this notice, looks like there are 4 defaults.
http://www.morganstanley.com/pinnaclenotes/pdf/series2/Pinnacle2_Notice_to_Distributors_031108.pdf
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Hi
Pinnacle Notes series 15 & 16 are expected to pay the interest on 5 Nov 08 but the interest has still not been credited in my bank account yet.
Has any other investors encountered such a problem?
Thanks.
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chong Reply:
November 7th, 2008 at 7:25 am
Nothing yet.
Do you have a copy of the fact sheet?
I seem to have misplaced mine. Maybe I did not receive one to start with.
RM who sold me the product has left the bank.
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chong Reply:
November 13th, 2008 at 7:51 am
Hi Chua,
RM from Citibank says interest has been paid out for Notes Series 15 & 16. Have you received yours?
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Hi there
Anybody bought Pinnacle 9? Latest update from FI is that it is on the way to Mandatory Redemption event and could face a TOTAL loss.
Any kind soul to advise? Should I complain as I only get to know about the CDOs default will cause Mandatory Redemption event and loss principal.
In distress now!!!
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lioninvestor Reply:
November 16th, 2008 at 11:23 pm
Hi pinnacle 9 distress,
unfortunately, your worst fears has come true. You can file a dispute if you felt you were mislead about this investment.
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Don’t worry about a slight delay in the crediting of the interest.
It can take up to 7 working days from the official payment date.
The payment date is when the Issuer effects payment to the Custodian Agents. There is maybe 2 working days delay already. Then the Custodian Agents take sometime to credit your account.
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hi,
do u hve any idea what is the px of Pinnacle Series 6&7 ? my friend a retired sch teacher bought into this quite heavily and the usual comment is she went there to renew FD and was informed this is like FD….
I searched the whole web but couldnt find any pricing.
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jc Reply:
November 8th, 2008 at 1:03 pm
dont count on the price. the bid/offer price is depending on the credit spread. chances of CDO (only Gods know what this is) default will be high.
File your complaint please.
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I just got a call from my FA with the most dreaded news from Morgan stanley. Its a total loss. Besides getting repeated apologies from her, what else can I Do? It was suppose to be a safe investment. “highly unlikely” to lose the principle kind of thing. What happened?
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jc Reply:
November 12th, 2008 at 10:46 pm
do something for yourself and ask for justice!
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lioninvestor Reply:
November 12th, 2008 at 11:25 pm
Hi David,
Sorry to hear about the situation. May I ask which series is it?
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My mother got the “biggest birthday surprise” today when her FA greeted her on the phone with a “I think you’re gonna lose every cent of your $100K investment in Pinnacle Note 10″! She really has some birthday luck!!!
Fact is, she’s almost 70, primary educated, and only heard this bank’s wealth manager telling her Pinnacle Notes are the safest kind of investment, based on stable bonds like SIA, Kepple Corp, Singtel etc; and that at most, she’ll lose only 5% of Principal value … of course, she’d be fooled into buying the notes rather than putting into FD!
Only today then she got the letter with Morgan Stanley stating that the notes will be worthless soon due to its links to some credit-hit only-God-knows “underlying assets” like Lehman, Fennie& Mac etc. … (What the ???? is going on???)
This is definitely MIS-SELLING!
My mother should be fully compensated!
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This looks like another can of worms after the Minibond and High Notes incident.
If there’s anyone of you who don’t mind sharing your story (can be anonymous) with the press, please let me know. Time for Pinnacle to be highlighted in the press.
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Intheknow Reply:
November 13th, 2008 at 11:49 am
This is yet another brand of credit-linked products going kaput. It’s actually quite interesting, all 3 brands have different problems.
1. DBS High Notes 5. One of the reference entity has gone bust, thus the investor will lose their principal. This is quite clear cut.
2. Lehman Minibonds. Lehman is not one of the reference entities, yet investors may lose their principal since Lehman was the Arranger and Swap agent. Not very clear cut, hope someone takes over Lehman’s duties.
3. Morgan Stanley Pinnacle notes. The reference entities did not go bust, however a number of the securities in the Underlying Securities went bust. The Underlying Securities, in my opinion, were not highlighted sufficiently in the first few pages of the propectus (although it was mentioned somewhere in the thick prospectus). Unfortunately, it was indeed mentioned in the prospectus that should the Underlying Securities suffer a loss beyond a threshold (which has been breached now), investors will lose their principal. Legally, they are covered.. but morally…
The above 3 actually highlight the 3 possible problems that could occur with a credit-linked note, and all 3 has happened!
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jc Reply:
November 13th, 2008 at 12:18 pm
Hi Intheknow
For CASE 3, if one was never given the “other” thick prospectus to made the purchase decision, is that legally correct?
Thank you
jc
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Intheknow Reply:
November 13th, 2008 at 5:45 pm
Hi JC,
It is a requirement for a copy of the thick prospectus to be made available to you.
Unfortunately, when you sign the risk disclosure / subscription form, I am pretty sure there is a clause there that declares you have read and understood the prospectus.
Thus, it’s going to be very hard for you to prove that you were not given the thick prospectus.
Regards,
Intheknow
lioninvestor Reply:
November 13th, 2008 at 6:32 pm
Hi intheknow,
you are absolutely right.
I was actually going to write a post highlighting this, but you beat me to it.
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Dave Reply:
November 14th, 2008 at 5:37 pm
If we go by the fact that there are some prints hidden within the prospectus that have never been brought to light through the sales process (i.e. advertisements) as well as the explanation of the product (i.e. prospectus and bank officer), then I believe there is still a strong case for a legal dispute… It’s akin to legitimately hiding facts about what is being sold and in the process, bet that the victims do not see the fine prints before they sign the dotted line or that the worst case scenario doesn’t not happen… One may ask how come parts of the product has been so blatantly exposed in the hard-sell process while some other parts have been so nicely hidden, never been raised at all …
…Either way, a crime has been committed…
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C S Lim Reply:
November 14th, 2008 at 10:24 pm
Dear in the know:
Can you pls. point me to the page of Pinnalce Base Prospectus whihc specifically gives the “threshold” beyond which the principal is “gone”.
I have read the Base Prospectus 10 times - and cant find the “threshold”. But I found the words on p. “A-1″ -Description of first-to Default Notes - to the effect that the proceeds of a series of notes will be “invested in equal aggregate principal amount of original underlying assets”. (i.e. equal weighting)
If they are equally weighted - say 100 names in the portfolio, how can just 6 defaults wipe out the rest of the 94 ?
Perhaps , someone can explain the “voodoo” mathematics that is facing us all : 6 defaults and the rest of the portfolio is reduced to nothing? It will only be nothing if the 6 defaults happen to be weighted more than the 94 that did not default. That is simple arithmetic, isn’t it ?
E.g. if there was $10 mln issued for a Series and there are 100 names in the udnerlying assets - each “asset name” will only be invested up to 1% or $100,000/-. If 6 defaulted- then only $600,000/- is wiped off and the rest still value - even if it is a lower “market value”. But they do not all become “zero” !
The only way to get a satisfacotry explnation as to what and where our money went is the court. There befoer the judge they can explain and see if the judge understands the basic question : Where did our money go to ?
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lioninvestor Reply:
November 15th, 2008 at 12:51 am
Hi CS Lim,
Refer to page 11 of the base prospectus:
http://www.morganstanley.com/pinnaclenotes/pdf/series9-10/Pinnacle_Base_Prospectus.pdf
A synthetic CDO is not the same as a pool of normal bonds. To put it another way, it is like a pool of credit default swaps that you write insurance on.
Once x number of defaults is exceeded, the entire position has to be terminated.
Ed Reply:
November 13th, 2008 at 5:53 pm
My mom’s afraid she may say the wrong things to the press and make matters worse, so she prefers to give it 2 weeks & see what’s the reply from Hong Leong Finance first. Good to hear we have avenues in the press for airing the problem.
Fyi, she wasn’t given the prospectus, nor told of so-called “underlying assets”, but just shown a few pages of the prospectus and assured that the reference entities are all very safe and worse case senario will be only a 5% loss.
Totally mis-sold!
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just note… NOT ALL MORGAN STANLEY PINNACLE NOTES HAVE THIS STRUCTURE….
It’s like Merrill Jubilee notes.. Series 3 is dead.. but Series 8 is fine.. because they have different structures.
Jubilee 3 is credit linked.. and died.
Jubilee 8 is like a fixed deposit and as long as Merrill (in future BOA) doesn’t die, Jubilee 8 won’t die.
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PH MM Reply:
November 16th, 2008 at 8:51 am
Hi,
This is the same for MS Pinnacle Series 15 too right?
As long as Morgan Stanley does not default, notes wouldn’t go into default too.
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I m very very shocked !! I am from Singapore.
I bought into Pinnacle Notes Series 1 in 2006 through a local distributor bank after seeing its ADs, brochures and also through advise from the bank staff… They told me that Pinnacle Notes Series 1 was linked to the performance of 7 major Asian bonds but never told me about it being linked to CDOs… 2 days’ ago, they forward a “self-explanatory” letter from Pinnacle Performance Ltd to me although the contents of the letter was totally “greek” to me!!!
Only through my phone contact with the branch manager that I came to know that the product is linked to the CDOs and 5 “credit events” (what that meant?!) had taken place. Also, the “value” of my investment has dropped to 2% !!! Over the last 2 years, I was never once given information on the status of my investment with Pinnacle Notes…
My questions now :
1. Is this how foreign banks are allowed to “re-package” their products with fantasy offerings and make false claims to entice their customers to buy into the false claims ??!?
2. Isn’t this criminal ?
3. Can anybody comment on my recourse ?
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Ed Reply:
November 14th, 2008 at 7:22 pm
What’s more “criminal” in my opinion are how Financial Advisors sold these high risk products unscrupulously to the masses under the idea that its all based on strong companies like SIA, Singtel, Temasek etc. and not told about the dangers from risky toxic CDOs.
That’s criminal!
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Dave Reply:
November 14th, 2008 at 10:00 pm
Yes. The so-called strong companies or Asian bonds are merely fantasy products that hid the fact that the real products driving the investments are the high risk CDOs… There is a disconnect between how even during harsh times, strong Asian bonds and companies are still thriving while the risky sub-standard CDOs have all gone under-water… Surely in doing so, the distributor banks have deceived their clients and should bare the full responsibilities of their actions by paying back every penny taken from their clients!
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Ed Reply:
November 19th, 2008 at 11:23 am
And the brochures the FA & WM gave us states “5.5% in bull or BEAR market” … what a joke!!!
Hi lioninvestor,
Kindly advise is floating rate notes credit linked? My RM told me that the underlying asset of Pinnacle 15/16–USD floating rate notes are senior unsecure debt. The word ‘debt’ worries me. I have no clue about senior unsecure debt. Is floating rate notes safe?
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lioninvestor Reply:
November 14th, 2008 at 1:12 pm
Hi Hazel,
If you are holding 15/16, your main risk would be that of Morgan Stanley going under.
The debt obligations refer to that of Morgan Stanley. ie they owe you money. Unsecure simply means without collateral.
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Lostinvestor Reply:
November 15th, 2008 at 12:38 am
Hi,
do you mean that for note 15, as long as Morgan Stanley survives, the notes should still be safe?
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pinnacle15 Reply:
November 17th, 2008 at 5:29 pm
indeed, as long as Morgan Stanley survives the notes will…
it’s buying into USD floating rate notes issues by MS and MS is sound with investment by MUFJ and covered by 700B US bailout plan. In overall it won’t fall down as easily as other notes.
Were pinnacle notes sold in HK?
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Hi, anyone bought pinnacle series note 2? was told credit events had occurred. Can advise me the value worth now or 100% loss. Tks
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Is it advisable for me to sell off my Pinnacle Notes series 15?
What is the value of the Pinnacle Notes worth now?
Thanks.
Peter
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PH MM Reply:
November 16th, 2008 at 8:54 am
You should ask your RM who sold you on the recent value. It should be at 80++% from what i last heard.
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From Straits Times:
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_302272.html
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PN 10 is Lehman-linked!
http://www.sgpolitics.net/?p=1207
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More information at the Morgan Stanley website:
http://www.morganstanley.com/pinnaclenotes/index.html
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MAS has provided some advice to investors who would like to file a complaint:
http://www.mas.gov.sg/consumer/other_structured_products/index.html
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The interest for series 15 has been credited. Anyone can advise how to find out about indicative price for Series 15?
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lioninvestor Reply:
November 15th, 2008 at 9:02 am
Hi MC,
You can request your distributor to check for you.
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Morgan stanley website does not have information on series 15/16
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Hi
Is it wise to call back the pinnacle notes series 15 now?
As I was quoted the price now is at 84.4% of my total investment as of 14 Nov 08.
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As you mentioned before Series 15/16 are USD floating rate notes.
Can please elaborate more on the floating rate notes.
Thanks
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lioninvestor Reply:
November 16th, 2008 at 11:25 pm
Hi Andrew,
there is no mention of synthetic CDOs in the entire pricing statement of pinnacle 15. So it’s not exactly in the same class as series 9,10, etc.
Floating rate notes means the coupon on the notes is pegged to some standard benchmark. For pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR - BBA plus margin.
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andrew ng Reply:
December 5th, 2008 at 10:43 pm
Just got the latest update for Pinnacle Notes 15 is at 80.79% (Sing Dollars) from my RM at standard chartered.
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I think the term “mis-sold” is a lighter term describing selling through “trickery” and “deception”… In another industry, this may still be condoned to some extent, but in the highly regulated banking sector ??!?
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Kenneth Reply:
November 16th, 2008 at 11:12 pm
Mine is minibond 3.
Since mid Sept, the frustration & disappointment are:
MAS action: ask HSBC to work harder, ask investors to go talk to their FI.
FI action: Contact 1-to-1 session with those investors who complaints. Delayed reply to complaints and refuses open forum requested by investors except DBS.
RM/FA: Keeping a low profile, no future business with investors. Also admit they didn’t know product is so toxic.
Investors: wrote to MP, PM, SM, MM. Petition to MAS, DBS. 4 rounds of Hong Lim Square gathering. Too expensive to go for class action while no creditible lawyer willing to take up.
Outcome: Nothing while DBS High Notes, Jubilee, Minibond 5/6, Pinnacle 9/10 slowly liquidating.
HSBC still working on it……
Conclusion? Back to square one. Fighting a losing battle…
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hi may i ask if jubilee series 8 which is arranged by Merrill Lynch has any underlying DSO basket of companies?
lioninvester could u advise me?
how about the pinnacle notes series 9? is there any confirmed outcome alr? is it true that there is really no possiblity of the investors getting back any amount of money?
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lioninvestor Reply:
November 15th, 2008 at 8:17 pm
Hi Jess,
Jubilee series 8 has been discussed at length here:
http://www.lioninvestor.com/merrill-lynch-jubilee-series-8-notes/
Investors of Pinnacle notes 9 will not be getting back anything.
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could like to know how about series 6????
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lioninvestor Reply:
November 16th, 2008 at 10:59 pm
6 is in danger as there could be a mandatory event should more defaults take place.
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I am holder of Pinnacle Series 9. Can anyone please advise where in the Base Propectus is it stated:
1. The list of “Other Underlying Assets” ie. the list of 100+ entities which issued the CDOs.
2. The default and mandatory redemption threshold level?
I understand that at the time of closing of Series 9, there was still no such list, ie. it is not in the Base Prospectus. The list was only subsequently constructed much later.
Lioninvestor,
1. Is there a legal case against MS for intent to conceal, mislead and misreprsent by selling a product without fully disclosing the list of “Underlying Assets”, while deliberately highlighting only the 5 Referenced Entities (which are generally considered to be low risk), thereby camouflaging the actual risks?
What if MS decides to populate the belated list with toxic assets that it wants to dispose of at the expense of Pinnacle 9 holders? This is clearly fraudulent and criminal. What is MAS’ position?
2. If there is no mention specifically of the default and mandatory redemption threshold level in the Base Prospectus, is there a legal case against MS for selling an incomplete product that it can later arbitrarily decide on the threshold level? The playing field is clearly tilted in MS favour. If the threshold level is not in the Base Prospectus, can it be argued that there is intent to conceal, mislead and misrepresent?
[Reply]
lioninvestor Reply:
November 17th, 2008 at 12:36 am
Hi Wgu,
if you look at the notice they gave out, it is clear they are trying to tell us they got everything covered legally:
http://www.morganstanley.com/pinnaclenotes/pdf/series9-10/Pinnacle9_Notice_to_Distributors_031108.pdf
Page 30 of the pricing statement also says that information on the underlying assets will not be available at the time of purchase. The only protection to investors is that they must be rated Aa.
http://www.morganstanley.com/pinnaclenotes/pdf/series9-10/Pinnacle9_10_Pricing_Statement.pdf
The playing field is tilted to MS as investors are buying something that they do not know.
Even I myself was duped into buying the Lehman Minibond, which has a structure similar to the Pinnacle. The realization took place before Lehman Brothers collapsed. I should have sold it off when I had the chance.
http://www.lioninvestor.com/more-on-lehman-minibonds/
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Can you let me know what Mr Tan Kin Lian’s blog address is? I want to see his forthcoming meeting schedule at the Speakers’ Corner.
Thanks.
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lioninvestor Reply:
November 17th, 2008 at 7:43 am
Hi Alice,
here’s the schedule:
http://tankinlian.blogspot.com/2008/11/fortnightly-meetings-at-speakers-corner.html
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with alot of anxiety in the air, i think it’s still safe for pinnacle15 and 16. their underlying assets are based-on notes issued by Morgan stanley. their not buying into toxic CDO and swap, but into MS itself which received injection by MUFJ and US gov.
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Pinnacle notes series 15 indicative price is around 82% last check. You can check the indicative price every Friday with your bank and decide whether to sell or not. Let’s keep each other in touch here and advise one another on Pinnacle notes series 15. I myself had been very stress over this whole financial crises.
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after reading ps-15 prospectus, i think i should just hang on the investment as term of investment is backed by short-term debt note by MS. the long-term prospect of the investment is higher in-term of security than those credit-linked pinnacle notes. the long-term notes give fixed coupon and treated like bond with capital protected. MS by now should have enough capital to cover its liability and MS stock performance in one year term stock drop 70% while Goldman sach drop 73% (better performance compare to GS with their diversified bussiness model). As notes investor, that should be enough reason for me to sit tight and USD700B bailout package should enough to cover MS’s liability to debt-holder like us. although market pretty bottom down right now, I hope Singtel will be back just in time.
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Hi lioninvestor
may i know wat time is the rally at Hong Lim Park on 29 Nov 08
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lioninvestor Reply:
November 24th, 2008 at 6:40 am
Hi Jess,
the time is from 5-7pm.
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I heard the news of Citigroup and it unsettle me. Will it go bankrupt like Lehman if US govt is not stepping in. Citigroup is asking for SGD 3 trillion which is enormous amount for US govt to step in. Will I lost all my Pinnacle series 15 investment that I bought in Citibank Singapore if they really go bust…
[Reply]
lioninvestor Reply:
November 24th, 2008 at 10:42 am
Hi MC,
Citibank is just a distributor of the product. A collapse will have no effect on Pinnacle 15.
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Lioninvestor
Thank you. I will be there.
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I understand that pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR - BBA plus margin. The underlying coupon quarterly payout were basically basaed-on the lending rate between bank, and hence depending pretty much on level of bank confidence and central bank rate. it is clear that libor’s movement indirectly proportional to central bank lending rate while speaking of central bank rate, we are in deep recession at the moment (with singapore the first country in asia officially in recession) where we are talking about not 1% growth, not zero growth, but NEGATIVE GDP growth.
Therefore bank all over the world, including UK, US, and japan are moving their attention to zero central bank rate which in return will bring LIBOR down along. what worry me so much now when the underlying coupon payment are highly depending on LIBOR, well just put it this way “if libor is at 3.5%, how can MS payout 3.5% to pinnacle series 15 holder???”. remember, the term of early redemption stipulates ” when the notes unable to meet its obligation” such as giving quarterly coupon, the notes is deemed worthless…
please click on below link fyi:
http://www.abs-cbnnews.com/business/10/10/08/singapore-asias-first-economy-recession
http://www.thisismoney.co.uk/libor
http://www.moneycafe.com/library/libor.htm
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btw, can anyone help me to interpret the effect on downgrading of Morgan stanley “unsecured debt” rating by Moody’s and S&P recently to chance of default for the “floating rate” notes issued by MS?
http://www.rbs.com.sg/Singapore/Important-3/index.htm
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Just got the lastest updated for Pinnacle Notes 15 from my RM at standard chartered is at 80.79% (Sing Dollars)
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