Lehman Brothers' Pacific International Finance has launched number 30 in its Minibond series for Hong Kong retail investors, whose investment incentives this time include a video camera or flat-screen TV.
Four CDO-backed tranches arranged by Lehman Brothers pay coupons quarterly, and repay capital should there no adverse credit event affect the reference portfolio of banking and finance companies.
Tranche A notes are US dollar-denominated and pay 6% per annum in years one to three and 7.5% per annum for a further four years, if the product is extended beyond year three. Tranche B notes are HK dollar-denominated and pay 5 % in years one to three and 6.5% in the remaining four if the product is not called. Tranche C notes are US dollar-denominated and pay 5.3% in years one to four and then 6.6% for a further year and half. Finally, HK dollar tranche D notes offer 4.3% in years one to four and then 5.6% per annum for a further year and half.
The reference credits are Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch and Morgan Stanley.
The issue is callable on or after the first year anniversary on any interest payment date, with redemption at 100% of capital plus interest due. The issue may also redeem early paying less than 100% of principal should a credit event occur.
The product closes to subscriptions on 19 January.
Click here to see a brochure for this product.
