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Singapore investors, who bought structured notes linked to failed U.S. investment bank Lehman Brothers, may recover what is left of their investments after the receiver gained control of the notes’ underlying assets.
PricewaterhouseCoopers (PWC), acting on behalf of Singapore investors who had bought the so-called “Minibonds”, said on Thursday it has reached a deal with Lehman Brothers Special Financing Inc, the swap counterparty for the Minibonds, to take over assets backing these notes.
PWC “can commence the process of realising the residual value of the notes without the risks and uncertainties of complex, costly litigation,” it said.
PWC did not give an estimate on how much Singapore investors can expect to recover.
Retail investors in Singapore and Hong Kong, many of them retirees, have lost millions of dollars investing their savings in what they thought were safe bond-like products, but were actually complex derivatives.
The losses sparked large protests in both cities, forcing authorities to intervene and negotiate settlements, forcing financial institutions to compensate some affected investors.
In Hong Kong, 16 banks agreed to pay about $813 million to compensate investors who had plouged nearly $2.5 billion into the toxic Lehman-linked securities.
Singapore banks have also offered compensation to affected investors, but on less generous terms, with ABN AMRO for instance offering on average just 20 cents for every dollar claimed.
PWC said it will liquidate the collateral over the next few months and pass whatever money is raised to affected investors.