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Replies to post #109105 on Lehman Brothers Financial SA (LEHNQ)
12/07/23 3:30 PM
This notice contains important information that is of interest to the registered and beneficial owners of the
subject securities. If applicable, all depositories, custodians and other intermediaries receiving this notice
are requested to expedite the re-transmittal to beneficial owners of the securities in a timely manner.
Notice to Holders
Lehman Brothers UK Capital Funding LP
€225,000,000
Fixed Rate to CMS-Linked Guaranteed Non-Voting, Non-Cumulative Perpetual Preferred
Securities
XS0215349357
Lehman Brothers UK Capital Funding II LP
€250,000,000
Euro Fixed Rate Guaranteed Non-Voting, Non-Cumulative Perpetual Preferred Securities
XS0229269856
Lehman Brothers UK Capital Funding III LP
€500,000,000
Fixed/Floating Rate Enhanced Capital Advantaged Preferred Securities
XS0243852562
29 November 2023
Notice of Interim Payment
Reference is made to:
(i) the €225,000,000 Fixed Rate to CMS-Linked Guaranteed Non-Voting, Non-Cumulative Perpetual
Preferred Securities issued by Lehman Brothers UK Capital Funding LP (the "Issuer" or “LP I”) with ISIN
number XS0215349357 pursuant to a prospectus dated 29 March 2005 (the "LP I Prospectus");
(ii) the €250,000,000 Euro Fixed Rate Guaranteed Non-Voting, Non-Cumulative Perpetual Preferred
Securities issued by Lehman Brothers UK Capital Funding II LP (the "Issuer" or “LP II”) with ISIN number
XS0229269856 pursuant to a prospectus dated 30 August 2005 (the "LP II Prospectus"); and
(iii) the €500,000,000 Fixed/Floating Rate Enhanced Capital Advantaged Preferred Securities issued by
Lehman Brothers UK Capital Funding III LP (the “Issuer”) or “LP III”) pursuant to a prospectus dated 20
February 2006 (the "LP III Prospectus" and together with the LP I Prospectus and the LP II Prospectus, the
"Prospectuses” and each a "Prospectus").
hereinafter referred to as the "Securities". Reference hereinafter to “the Issuers” is reference to LP I, LP II
and LP III.
Capitalised terms used but not otherwise defined herein shall have the meanings ascribed to them in each
Prospectus (as applicable).
Interim Payment: an initial interim payment will be paid for value on 8 December 2023 relating to the
Liquidation Distribution in respect of the Securities to beneficial holders of the Securities as of 1 December
2023. The value of the distribution for LP I, LP II and LP III is set out below. This distribution represents a
significant proportion of the total funds currently available for distribution. Some funds have been retained to
meet certain costs of the liquidation and residual funds from these retained reserves may become
distributable in the future. Further significant distributions are subject to the Company’s success (or
otherwise) in relation to the Priority Legal Issue 1 (as defined and set out in the Joint Liquidators’ 21
September 2023 update notice).
Value of interim Liquidation Distribution by Issuer
LP I ISIN number XS0215349357 - a Liquidation Distribution totalling EUR 36,025,574.76 which, in
accordance with the terms of the LP I Prospectus, comprises: (a) an amount of EUR 32,341,532.54, by way
of a Liquidation Preference; and (b) EUR 3,684,042.22, by way of due and accrued but unpaid Distributions.2 -
LP II ISIN number XS0229269856 - a Liquidation Distribution totalling EUR 55,921,323.60 which, in
accordance with the terms of the LP II Prospectus, comprises: (a) an amount of EUR 53,218,412.64, by
way of a Liquidation Preference; and (b) EUR 2,702,910.96, by way of due and accrued but unpaid
Distributions.
LP III ISIN number XS0243852562 - a Liquidation Distribution totalling EUR 80,919,451.47 which, in
accordance with the terms of the LP III Prospectus, comprises: (a) an amount of EUR 80,060,773.06, by
way of a Liquidation Preference; and (b) EUR 858,678.41, by way of due and accrued but unpaid
Distributions.
To ensure that future payments can be made on these Securities to the extent the Joint Liquidators are in a
position to do so in the future, the principal amounts recorded as being outstanding on these Securities will
not be written down nor will a pool factor be applied at this time as part of the process by which the
payments referenced in this Notice are made.
Background: each of the Issuers were registered as a special purpose limited partnership for the purposes
of issuing the Securities. LB GP No.1 Ltd (the "Company") acts as the General Partner of the Issuers.
Bruce Alexander Mackay and Matthew Robert Haw of RSM UK Restructuring Advisory LLP were appointed
as joint liquidators (the "Joint Liquidators") of the Company on 28 February 2017 pursuant to a special
resolution of the Company's sole member, Lehman Brothers Holdings Inc. ("LBHI"). The appointment of the
Joint Liquidators was ratified by the Company's creditors at a meeting of creditors held on 12 April 2017.
The appointment of the Joint Liquidators followed a Court process in which the Company was restored to
the Register of Companies with effect from 3 February 2017. The restoration process and a number of
related Court Orders that flowed from it were set out in the Joint Liquidators’ Notice to Holders dated 23
June 2017 (the "June 2017 Notice"). The Company is part of the Lehman Investment Banking Group (the
"Group"). Prior to the collapse of the Group in September 2008, a funding structure was developed by the
Group to fund, on a subordinated basis, capital to be made available to Lehman Brothers Holdings Plc (in
administration) ("LBH") and LBHI in respect of regulatory capital. The funding structure was established
through five limited partnerships as follows:
(i) Lehman Brothers UK Capital Funding LP ("LP I");
(ii) Lehman Brothers UK Capital Funding II LP ("LP II");
(iii) Lehman Brothers UK Capital Funding III LP ("LP III");
(iv) Lehman Brothers UK Capital Funding IV LP ("LP IV"); and
(v) Lehman Brothers UK Capital Funding V LP ("LP V").
(together the "Partnerships" or individually a "Partnership" as the context requires.
The Company acted as a general partner of each of the Partnerships. The Partnerships formed the
structure of the capital funding arrangement. The purpose of the Partnerships was to raise regulatory capital
for LBH and LBHI by issuing securities to investors.
Qualification Statement: this notice has been prepared using information obtained by Bruce Alexander
Mackay and Matthew Robert Haw (i) acting as the Joint Liquidators of the Company; and (ii) acting as
licensed insolvency practitioners specifically in relation to winding-up the Partnerships pursuant to an order
of the High Court made in accordance with section 6(3) of the Limited Partnerships Act 1907. Reference in
this notice to the Joint Liquidators also includes (where the context requires) Bruce Mackay and Matthew
Haw acting as insolvency practitioners for the purpose of winding-up the Partnerships. Given the wider
international failure and insolvency of associated Lehman entities and the passage of time since the
Partnerships were active, it has been difficult to obtain all information relevant to the Partnerships and
readers of this notice should understand that the Joint Liquidators' investigations have been hampered (in
some cases) by the paucity of financial information and documentation.
Neither the Joint Liquidators nor RSM UK Restructuring Advisory LLP accept any liability whatsoever
arising as a result of any decision or action taken or refrained from as a result of information contained in
this notice.
AI
