Drew & Napier chief executive Davinder Singh SC has been called on by the Monetary Authority of Singapore to give advice on the next crisis looming in the Lion Nation – the unravelling of Minibonds structured notes. Minibonds are credit-linked notes which are structured as a security with an embedded credit default swap allowing the issuer to transfer a specific credit risk to credit investors. In Hong Kong and Singapore, these are marketed and sold to individual investors. 

Singapore’s central bank said earlier this week that it has called on Singh “to advise the MAS on the implications of the legal issues raised by lawyers acting in the Chapter 11 proceedings for Lehman Brothers”. ALB understands that these “implications” have to do with the fact that the entity used to issue the notes – Minibond Limited – was an offshore special purpose vehicle created by Lehman, a fact that the Minibonds trustee, HSBC Institutional Trust Services, and receivers, PricewaterhouseCoopers, believes will lead the lawyers acting on the Lehman case to challenge the unwinding of the minibonds. 

Series 1 and 5–10 of the notes have defaulted and will be unwound, while series 2 and 3 are expected to go into default soon. There are no series 4 notes. The appointment of Singh, one Singapore’s most revered litigators, is being interpreted in the industry as a sign that the Singapore government is considering litigating this dispute and expediting the return of cash to investors in the minibonds.