Citigroup to Repurchase HK$1.06 Billion of Lehman Notes

Citigroup to Repurchase HK$1.06 Billion of Lehman Notes
By Stephanie Tong - Jul 8, 2011 6:13 PM GMT+0800


Citigroup Inc. (C) agreed to repurchase HK$1.06 billion ($136 million) of notes linked to Lehman Brothers Holdings Inc. (LEHMQ) in Hong Kong, according to a statement from the Hong Kong Securities and Futures Commission today.

Citigroup’s offer covers about 92 percent of customers holding the outstanding notes, it said. The bank will pay 80 percent of the value of each customer’s investment, according to the statement.

The offer from Citigroup came after Standard Chartered Plc (STAN) in March agreed to repurchase HK$1.48 billion of structured notes linked to Lehman. The proposals, along with a settlement agreement approved in May, may help end discontent that led investors to hold almost daily protests outside bank branches in Hong Kong.

“Citibank is making this offer in the best interests of our clients without admitting any liability,” James Griffiths, a Citigroup spokesman for the bank in Asia Pacific, said in the e-mailed statement.

Hong Kong investors in notes tied to Lehman approved on May 20 a settlement agreement proposed by Lehman’s receiver PricewaterhouseCoopers LLP that would return as much as 96.5 percent of their original investment. About 43,000 Hong Kong investors had bought an estimated $1.8 billion of so-called minibonds from lenders.

Citigroup is repurchasing market-linked notes and equity- linked notes that are different from the minibonds that were sold by some banks in Hong Kong.

To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net