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The demise of Lehman Brothers may force Keshet Debentures to default on its liabilities to bondholders. Keshet will probably not be sending investors interest checks in two weeks for the Keshet B1 series of bonds, brokered by Excellence Nessuah. That's because the Deutsche Bundesbank has halted payments by Lehman Brothers Bankhaus, which backs the series' liabilities. Excellence issued this bond series in conjunction with Xpert Financial Group.

Keshet Debentures said yesterday that the Lehman Brothers' Chapter 11 request for court protection from creditors does not include subsidiaries such as Lehman Brothers Bankhaus, but the German central bank nevertheless issued an order that payments by the bank are to be halted until further notice.

For this reason, and since Lehman Brothers Bankhaus' obligations are not covered by deposit insurance, the German bank is not expected to transfer interest on the promissory note sold to Keshet Debentures, and the company is therefore unlikely to pay interest to investors on the upcoming payment date in October.