Many might think...what is a Minibond?
The main difference between a bond and a minibond is that it requires (MUCH) less principal to buy compared to the traditional bonds (- that's what made it so attractive!)
The least amount of purchase usually ranges from ten thousand Hong Kong dollars to fifty or sixty per unit.
The distributor is usually a Cayman Island-registered company. They chop up the bonds (which only the rich people can afford!) and sell it through retail banks in Hong Kong to accumulate principal and purchase blue-chip bonds (usually the financial institutions are the trustees of these bonds).
The minibonds consists of high-risk derivatives like synthetic collateralised-debt obligations (CDOs) and credit default swaps (CDS) and were marketed as proxy investments in well-known companies such as Hutchison Whampoa and the Hong Kong and Shanghai Bank Corporation (HSBC).
In the past few years, Lehman Brothers sold over 10 billion worth of Minibonds.
This is our understanding for the time being...
Hope you get it!
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