Fubon (00636) sees profit to rise HK$4m on Minibonds deal (10:36)
(ET Net News Agency, 28 March 2011) Fubon Bank (Hong Kong) (00636) announced a conditional agreement among Lehman Brothers Special Financing Inc., the receivers, the trustees and others has been reached to settle opposing claims asserted by Lehman Brothersin respect of the collateral for the Series 10 to 12, 15 to 23 and 25 to 36 of the Minibonds.
The agreement will, upon it becoming unconditional, enable investors of relevant Minibonds to recover between 70% and 93% of the amounts they invested. The total level of recovery to eligible customers, after taking into account the offer of ex gratia payments by the distributing banks, will be in the range of 85% to 96.5% of the principal amount oftheir investment.
If the payment obligations under the funding arrangements described above are fully utilized in the next six years, it is estimated that there would be an overall positive financial impact to the profit of the bank from the proposal of around HK$4 million over the next six years. If, on the other hand, none of the contingent obligations under the funding arrangements described above is drawn down and utilized during the next six years,the overall positive financial impact to the profit over the next six years will increase to around HK$30 million. (HL)
