Lehman Preferred Series "J" Preferred (fka LEHJQ)

[DJN]

RBS offers to buy your Lehman-backed structured products

http://www.citywire.co.uk/professional/-/news/structured-products/content.aspx?ID=372602

By Drazen Jorgic | 15:45:57 | 11 December 2009

Royal Bank of Scotland (RBS) is buying structured products backed by Lehman Brothers after their value rallied in recent weeks, Citywire Wealth Manager can reveal.

Structured products which were backed by Lehman Brothers bonds were deemed worthless after the collapse of the once-revered investment bank.

However, the RBS Global Banking & Markets division is now looking to buy Lehman-backed structured products from private client wealth managers who own such notes in their portfolios.

An RBS note to discretionary wealth managers said: 'RBS are putting bids on Lehman paper you may hold (structured products). With the Lehman v Barclays lawsuit underway, Lehman paper has rallied in recent weeks.
'We are seeing speculative buyers and some clients are selling out of their positions looking to capitalise on the recent rally in the paper.

'If you hold Lehman paper and are interested in capitalising on the recent gains let me know.'

It is not clear if RBS is buying Lehman-backed products for its own use or for a customer that has expressed an interest.

The RBS move coincides with today's announcement that the Financial Services Compensation Scheme (FSCS) is ready to start paying claims for some Lehman-backed structured products which were sold to the retail market. RBS' decision relates to bespoke products.

Nick Sketch, a senior investment director at Rensburg Sheppards, said the RBS move, although ambiguous in its nature, was intriguing.
However, he added: 'There must be something else going on apart from the obvious, but I'm not sure what that is and the question on my mind is how does it actually work when you lift up the bonnet?'