Morgan Stanley: S$26 million notes sold in Singapore likely worthless

Morgan Stanley (MS) said S$26 million (US$17 million) of notes sold to around 700 retail investors in Singapore are now likely worthless amid a mandatory early redemption.

The notes, known as Pinnacle Notes Series 9 and 10, were subject to the redemption because credit events occurred in the underlying assets of the structured product, which included Lehman Brothers Holdings Inc. (LEHMQ), Fannie Mae (FNM), Freddie Mac (FRE) and two Iceland banks, the company said on its Web site Friday.

Morgan Stanley said the underlying assets will be sold, and the notes will be redeemed within four to six weeks.

“Investors in the Series 9 and 10 Notes will be notified of the redemption amount payable to investors in accordance with the prescribed process. However, given current market values, investors are likely to lose all of their original principal investment,” it said in a statement.

The notes were sold through five distributors – DMG & Partners Securities, Hong Leong Finance, Kim Eng Securities, OCBC Securities and UOB Kay Hian.…