Minibond

Minibond is a brand name for a series of structured financial notes issued in Hong Kong and Singapore under the control of Lehman Brothers. It is a misnomer to describe the Minibond as credit-linked note because of the Synthetic Collateralised Debt Obligations hidden in the three-layered structure (as all series of Minibonds issued in 2004 and thereafter are). The term "Minibond" is also used to refer to other likewise structured Notes, namely Constellation Notes and Octave Notes, respectively issued in Hong Kong under the direction of DBS Bank and Morgan Stanley. These Notes, coupled with Minibonds and other Equity-linked Notes issued by Lehman Brothers, are sometimes officially referred to as "Lehman-related securities". For the sake of completeness, Lehman Brothers arranged 3 "Special Purpose Entities" (hereafter "SPE") to issue Minibond-like Notes in Hong Kong from 2002 to 2008. Minibonds are issued by Pacific International Finance Limited, and the Notes issued by the other 2 SPE are branded "ProFund Notes" and "Pyxis Notes". Unlike the Minibonds which have a three-layered structure, these latter Notes feature 2 layers of notes bundled together with prominence given exclusively to one so as to obscure the nature and importance of the other.

Minibond is a brand name for a series of structured financial notes issued in Hong Kong under the control of Lehman Brothers. It is a misnomer to describe the Minibonds as credit-linked note because of the Synthetic Collateralised Debt Obligations hidden in the three-layered structure (as all series of Minibonds issued in 2004 and thereafter are). Full details of the Minibonds (plural expression herein refers to more than one series or all the series) are unavailable to the general public – even the note-holders because of the secrecy and other barriers put up by the relevant governmental authorities, and the financial and professional institutions. Those who have or ought to have the full details but refuse to disclose to the note-holders are the Securities and Futures Commission (hereafter "SFC") and Hong Kong Monetary Authority (hereafter "HKMA") of Hong Kong SAR; the HSBC Bank USA NA as Trustee of the series; the PricewaterhouseCoopers as Receiver appointed by the Trustee; as well as all the distributing banks and brokerages. The concerted action to keep the details of Minibonds secret by the regulators, trustee, distributors, and Lehman Brothers is consequential on the imperative to obscure the real causes of the systematic and widespread mis-selling that lasted for more than 6 years.

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