Lehman Brothers Bonds Latest News: Effect of Lehman Brothers Bankruptcy

As reported in the article, Effect on Lehman Brothers Bonds: Lehman Brothers Bankruptcy, the biggest question that faces the investors of Lehman Brothers is about their Lehman Brothers stocks and Lehman Brothers bond holdings. The Lehman Brothers Stock Price is as available from the various exchanges on which the LEH stock is trading and it went down by more than 95%. The big questions that is haunting the investors is What is the status of Lehman Brothers Bonds, i.e. the Bonds issued by Lehman Brothers.

Here are some more interesting but disturbing news about the developments for the Lehman Brothers Bonds:
It was in HongKong, now a part of China, where angry investors of Lehman Brothers Bonds clashed with police outside Bank of China's Hong Kong headquarters Wednesday and demanded the repayment of investments linked to failed US bank Lehman Brothers.

Thousands of investors who have lost their earnings of life due to investments in the Lehman Brother Bonds due to the Lehman Brothers Bankruptcy have also stormed other major banks and demanding help from the law keepers to regain their money.

The biggest problem is that it was not the invetors who have directly selected to invest in the Lehman Borthers Bonds, but they had selecteed schemes like mutual funds, investment vehicles and other savings schemes which invested their money in the Lehman Borthers Bonds. The protestors, who complain that the banks which sold them the so-called "mini-bonds" had not fully explained the risks involved, held placards and shouted slogans to demand a full refund of their investments.
Lawmakers, grabbed by protesters as they were on their way to the first session of the new legislature, promised to do all they could to pressure the government to take more aggressive action against the banks.
People from all Walks of Life were complaining how they were "cheated" and "mis-lead" by the so called "investment advisors" and fund managers about how safe their investment is going to be. People are complaining that they had invested their lives earnings and now they are down to zero with their investments.

Political parties said they would meet with some of the banks Wednesday afternoon to discuss plans to resolve the crisis.
The government proposed on Monday that the banks buy back the products at their estimated value from investors, who bought an estimated 12.7 billion dollars (1.63 billion US) of the products.
But the proposal failed to pacify bond holders, who said the market value of the products is now much lower than their purchasing price.
Let's hope that there can be some way to redeem to investors hard earned money, with the help of the government and banks.

Is ICICI Bank affected by Lehman Brothers Bankruptcy?

ICICI Bank, the second largest bank of India and the largest bank in private sector, has straight away dismissed any problems with its ICICI UK exposure to Lehman Brothers Bonds. As per the news, Chanda Kochar, joint managing director of ICICI Bank, said its cumulative overseas exposure is less than 4 per cent of its consolidated assets and the bank has the ability to take any losses, if they arise. NDTV News.

Since the day Lehman Brothers declared Banruptcy, there are big rumors running around in the market about ICICI bank's exposure to the troubled Lehman Brothers Bank and its Bonds. There have been questions raised about ICICI bank's solvency concerns.

"The exposure is very small compared to our balance sheet and profitability and the risk could be even lower," she said. Some of the losses on overseas investments, Kochar said, are just mark-to-market provisions, "not underlying credit losses".

On rumours of senior management selling their stake, Kochar said that none of the bank’s working directors has sold any stake in 2008 and described these speculations as "malicious". "We have reasons to believe the rumours are malicious," she said. The bank plans to urge the regulator to take action against those spreading it.

As per the news, The current credit turmoil in the Wall Street has also impacted the domestic liquidity. But Kochar indicated that ICICI Bank’s liquidity situation remains comfortable as "the bank had taken steps a year ago to increase it". "We operate on domestic liquidity in the range of Rs 8,000 crore to Rs 10,000 crore and global cash and cash equivalents of $2 billion," she said.

On the Wall Street crisis, she said that it is more panic that erosion of underlying value. She noted that recent deals in which US investment bank Merrill Lynch was bought by Bank of America, and Lloyds TSB’s takeover deal of HBOS PLC, UK’s biggest mortgage lender. Both these institutions were bought at much higher prices than their market prices, she pointed out.

Effect on ICICI Bank for Lehman Brothers Bankruptcy

The global investment bank Lehman Brothers, has filed for bankruptcy under Chapter 11, but it said that its bankruptcy plans will not include its broker-dealer operations and other units like Neuberger Berman.

Coming to India, some investors are worried whether any of their banks or investment firmss had any exposure to Lehman Brothers, directly or indirectly. There is some news available about the ICICI Bank exposure to Lehman Brothers and ICICI Bank officials claim that the losses are not so phenomenal or significant.

As per the news, the ICICI Bank's UK division has a lot of exposure to Lehman Brothers Bondsholds 57 million euro of senior bonds of Lehman Brothers Inc. "Potential losses are not material," the bank said in a statement.

The bank said it had undertaken transactions with the US-based troubled investment banker as part of treasury operations.

"The exposure to Lehman Brothers' entities on account of these transactions and potential loss thereon are not material," it said.

However, the ICICI Bank shares yessterday went down by around 6 per cent to Rs 591.35 on the Bombay Stock Exchange.

Lehman Brothers, which is a 158-years-old-financial institution has filed for bankruptcy protection, after losing around $60 billion (About Rs 2,76,000 crore) in sinking real-estate market.

Another investment bank Merrill Lynch is being bought over by Bank of America for $50 billion, while world's largest insurer American International Group (AIG) is also facing financial crisis.

Also, Lehman has suspended operations of its three Asian arms. Lehman Brothers Asia, Lehman Brothers Securities Asia and Lehman Brothers Futures Asia Ltd have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice.

Effect on Lehman Brothers Bonds: Lehman Brothers Bankruptcy

The global investment bank Lehman Brothers, has filed for bankruptcy under Chapter 11, but it said that its bankruptcy plans will not include its broker-dealer operations and other units like Neuberger Berman.

The biggest question that faces the investors of Lehman Brothers is about their stocks and bond holdings. The Lehman Brothers Stock Price is as available from the various exchanges on which the LEH stock is trading and it went down by more than 94% in yesterday's trades. The biog questions that is haunting the investors is What is the status of Lehman Brothers Bonds, i.e. the bonds issued by Lehman Brothers.

The Standard & Poor's or S&P has downgraded the Long term bonds of Lehman Brothers to Default Status. These Lehman’s long-term bonds are still trading and being quoted flat in the secondary market. Some of the market data providers have said that they are unable to collect quotes or other market information for a number of Lehman index-linked bonds and Lehman Brothers Commercial Bank certificates of deposit (CDs).Similarly, no concrete information is available about Lehman index-linked bonds and Lehman Brothers Commercial Bank CDs. God knows what will happen with the long term bonds issued by Lehman Brothers.

There is a lot of interest among other investment firms in buying its broker-dealer operations. Lehman Brothers said that it is in advanced discussions with a number of potential buyers of its investment management division. Lehman Brothers Bankruptcy will represent the end of a 158-year old company that survived world wars and the collapse of Long-Term Capital Management but could not survive the global credit crunch. This is another example like that of the Bear Sterns bank being sold out to J P Morgan for a measely 10 dollars a share, while the bid started at just $2 per share.

As per the news, Investors in recent weeks had grown increasingly jittery about Lehman's $46 billion of mortgages and asset-backed securities, as well as its credit rating and its ability to raise capital. Helpless investors can just wait and watch.