On 22 July 2009, 16 distributing banks, without admission of liability, reached an agreement with the HKMA and SFC to repurchase Lehman Brothers Minibonds from eligible customers. In consideration of the agreement, the SFC will discontinue its investigations into the sale and distribution of Minibonds by such banks.
Professional investors, corporate/non-individual investors (with specified exceptions), experienced investors (who in the three years preceding their first purchase of Minibonds, executed five or more transactions in leveraged products, structured products or a combination of these products) and customers who have previously settled claims in relation to Minibonds with the distributing banks are not eligible for such repurchase offer.
Eligible customers below the age of 65 will be offered a repurchase amount equivalent to 60% of the nominal value of their original investment and eligible customers aged 65 or above will be offered a repurchase amount equivalent to 70% of the nominal value of their original investment. Depending on recoveries from the underlying collateral, eligible customers below the age of 65 may also receive a further payment of initially up to 10% of the nominal value of their investment in the Minibonds. In addition, if recoveries from the underlying collateral exceed 70%, the distributing banks will pay the entire excess amount to eligible customers who have accepted the repurchase offer.
As at 16 July 2009, the HKMA had received 21,490 complaints concerning Lehman Brothers related products of which 6,229 are currently being investigated. The complaints are mainly in relation to products arranged/issued by Lehman Brothers: most notably, minibonds.