Oct 01, 2008

Cleary Gottlieb is representing Dexia on all aspects of its recapitalization plan. After three days of intense negotiations between Dexia, its shareholders and the Belgian, French and Luxembourg governments, and on the back of heightened crisis in the European banking sector, a €6.4 billion recapitalization plan was put together in record time. Under the plan, the Belgian state and regions as well as the existing core Belgian shareholders of Dexia, on the one hand, and the French government and the CDC on the other, will each inject €3 billion into Dexia SA. In parallel, the Luxembourg government will be subscribing for €376 million in convertible bonds issued by Dexia BIL.

Dexia's recapitalization is the second instance of urgent, large scale support by European governments to Belgian financial institutions in the last few days, after the rescue, over the course of last weekend, of Fortis. A Cleary Gottlieb team is representing BNP Paribas in its announced acquisition of Fortis' operations in Belgium and Luxembourg, as well as the international banking franchises, for a total consideration of €14.5 billion.

Nov 21, 2008

Cleary Gottlieb is representing the German Savings Bank Association (“DSGV”) with respect to back guarantees granted by DSGV and other major German banking associations and financial institutions to the Federal Republic of Germany in connection with a €50 billion rescue package arranged by the German Federal Government and various significant financial institutions for the Hypo Real Estate Group.

In 2007, Cleary Gottlieb advised DSGV on the acquisition of Landesbank Berlin Holding AG (formerly “Bankgesellschaft Berlin”).

Sep 08, 2008

Cleary Gottlieb acted for Morgan Stanley, which was in turn the advisor to the United States Treasury, in connection with the conservatorship of Fannie Mae and Freddie Mac described in the press as “the most dramatic market intervention in years.”

As detailed in an announcement by Treasury Secretary Henry Paulson on September 7, the two companies have been placed into conservatorship. As a result, the Federal Housing Finance Agency, Fannie Mae’s and Freddie Mac’s regulator, has gained management control of the companies. Treasury has also established preferred stock purchase agreements with Fannie Mae and Freddie Mac under which Treasury could be required to provide as much as $100 billion to each of the companies, established a new secured lending credit facility for the companies, and initiated a temporary program to purchase Fannie Mae and Freddie Mac's mortgage backed securities in the open market.

Jan 25, 2008

Cleary Gottlieb represented Citi in 10 concurrent offerings of $19 billion of convertible preferred stock and straight preferred stock. The offerings involved six individually negotiated private placements of $12.5 billion of convertible preferred stock to the Government of Singapore Investment Corporation, the Kuwait Investment Authority, HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Capital Research mutual funds, the New Jersey Division of Investment and Citi's former Chairman and CEO Sandy Weill, as well as a $3.17 billion public offering of convertible preferred stock and a $3.72 billion public offering of straight preferred stock. The private and public convertible preferred stock offerings closed on January 23 and the straight preferred stock offering closed on January 25.

Cleary Gottlieb represented Citi on the private placements, and represented the underwriters, led by Citi Global Markets, for the public offerings. Cleary Gottlieb also served as disclosure counsel to Citi in connection with its year-end earnings release.

Dec 03, 2007

Cleary Gottlieb represented Citigroup Inc. in its sale of $7.5 billion of mandatorily convertible trust preferred Units (Upper DECS Equity Units) to the Abu Dhabi Investment Authority. The investment, conducted as a private placement, will give ADIA a 4.9% ownership stake in Citi on an as-converted basis. ADIA has agreed not to own more than a 4.9% stake in Citi, and will have no special rights of ownership or control and no role in the management or governance of Citi, including no right to designate a member of Citi's Board of Directors. Citi and ADIA agreed on the investment on November 26, and it closed on December 3.

Substantially all of the investment proceeds will be treated by Citi as Tier 1 capital for regulatory capital purposes. Accordingly, it will support Citi's progress toward its goal of achieving its targeted capital ratios by the end of the first half of 2008.

Each Upper DECS Equity Unit consists of a contract to purchase stock at different future purchase dates and an interest in four series of trust preferred securities. The Upper DECS Equity Units mandatorily convert into shares of Citi common stock on dates ranging from March 15, 2010, to September 15, 2011, at prices ranging from $31.83 to $37.24. Each Upper DECS Equity Unit will pay a fixed annual payment rate of 11%.

Citigroup Inc., a global financial services company with approximately 200 million customer accounts in over 100 countries, provides financial products and services, including banking, securities brokerage and asset management.

ADIA is the sovereign wealth fund of the government of Abu Dhabi, one of the seven emirates that comprise the federation of the UAE.

Aug 01, 2008

Cleary Gottlieb is representing Temasek in its $3.4 billion investment in Merrill Lynch. Temasek is currently Merrill Lynch’s largest shareholder following its $5 billion initial investment in December 2007. Temasek is an investment holding company owned by the Singapore government with staff of over 300 people and a portfolio of over $100 billion focused primarily in Asia.

The Share Subscription Agreement was signed on July 28, 2008. Temasek committed to purchase $3.4 billion of common stock in a public offering by Merrill Lynch, which priced on July 29, 2008, at $22.50 per share. The First Closing occurred on August 1, 2008 together with the Public Offering. Under the terms of the Share Subscription Agreement, Temasek was entitled to receive from Merrill Lynch $2.5 billion of this stock in settlement of Merrill Lynch’s obligations under price reset provisions of the initial investment in December 2007. Temasek also agreed to invest an additional $900 million in new funds in the public offering. A portion of the total commitment is subject to regulatory approvals.

Feb 29, 2008

Cleary Gottlieb represented Credit Suisse as the warrant manager in a Regulation S offering by the Republic of the Philippines of debt exchange warrants. The warrants entitle the holders to exchange specified series of the Republic’s outstanding U.S. dollar- and euro-denominated bonds for a series of Philippine domestic bonds denominated in Philippine pesos, in the event of a default on those foreign-currency bonds. The deal closed on February 29.

The bonds to be tendered on exercise of the warrants include twelve different series of bonds maturing between 2008 and 2017 that are governed by New York or English law. The offering was sold to international as well as Philippine investors, primarily Philippine banks. Philippine banks will benefit from favorable capital treatment of their holdings in Philippine foreign currency debt by owning the warrants.

Apr 09, 2008

Cleary Gottlieb represented the United Mexican States in its Rule 144A/Reg. S offering of Series XWA08 Debt Exchange Warrants and Reg. S offering of Series XWB0B Debt Exchange Warrants. The transaction closed on April 9, 2008.

The Warrants entitle holders to exchange, on October 9, 2008 (unless extended by Mexico at its sole discretion), approximately $1.25 billion of various series of Mexico's outstanding U.S. dollar, euro, Italian lira and Deutsche mark-denominated external bonds for certain series of MBonos, domestic bonds denominated in Mexican pesos, or Udibonos, domestic bonds denominated in UDIs, a unit of account adjusted for Mexican inflation.

The offering--Mexico's fourth offering of debt exchange warrants since launching the product in November 2005--continues the sovereign's strategy of reducing its external indebtedness by replacing it with domestic debt payable in pesos.

The bonds to be tendered on exercise of the warrants include 21 different series of bonds maturing between 2009 and 2034 that are governed by New York or German law. The series of MBonos or Udibonos to be acquired in exchange are governed by Mexican law and will mature in 2014, 2017 and 2036, respectively, in the case of the MBonos, or 2017 and 2035, respectively, in the case of the Udibonos. The MBonos and Udibonos have no covenants, no events of default, no gross-up for Mexican taxes and are not subject to New York or U.S. federal court jurisdiction.

Barclays Capital and Merrill Lynch acted as the joint lead managers for the deal. Citibank, N.A., London Branch is serving as warrant agent.

Oct 10, 2006

Cleary Gottlieb successfully represented the Republic of Congo (Brazzaville) in two Fifth Circuit appeals from attempts by judgment creditors of the Congo to satisfy their claims by executing upon the Congo’s right to receive royalty oil from petroleum exploration projects in the Congo in FG Hemisphere Associates v. Republique du Congo, and Af-Cap, Inc. v. Republic of Congo,in FG Hemisphere Associates v. Republique du Congo, 455 F.3d 575 (5th Cir. 2006), and Af-Cap, Inc. v. Republic of Congo, 2006 WL 2424778 (5th Cir. Aug. 23, 2006).

The net result of these decisions is to vacate writs of garnishment purporting to execute upon royalty obligations owed to the Congo by oil development corporations, to reverse a turnover order directing the Congo to sign over such royalty obligations to creditors, and to vacate an order holding the Congo in contempt for its refusal to comply with the turnover order on grounds of sovereign immunity.

In FG Hemisphere, the Court of Appeals held that lower courts must determine whether a foreign state’s property is "in the United States" and "used for a commercial activity in the United States" before it may be subject to attachment or execution under § 1610 of the FSIA every time a writ of garnishment or other form of execution on foreign state property is sought; the fact that the property was previously in the United States does not satisfy the statutory test. The court also held that these "situs snapshot" determinations must be made separately for each piece of property targeted for execution, and that any execution must satisfy all the requirements of state law even where no immunity is found under the FSIA.

In Af-Cap, the Fifth Circuit further held that non-monetary obligations (such as the obligation to deliver royalty oil) are not subject to garnishment under Texas law; that a contractual consent of a foreign sovereign to jurisdiction in New York is insufficient to support a finding of personal jurisdiction under the FSIA in Texas (which would be necessary to support a turnover order); and that the FSIA prohibits monetary contempt sanctions against a foreign state (a point on which the Congo was supported by the U.S. Department of Justice as an amicus curiae).

Oct 11, 2007

Cleary Gottlieb represented The Export-Import Bank of Korea in its SEC-registered offering of MXN 1 billion 8.61% notes due 2017, which closed on October 11 and was a takedown from KEXIM’s shelf registration statement under Schedule B. Merrill Lynch was the sole bookrunner for the offering.

The notes were settled through Euroclear and Clearstream (including Indeval, the Mexican central clearing system) and listed on the International Quotation System (Sistema Internacional de Cotizaciones) of the Mexican Stock Exchange. These are the first peso-denominated notes issued by a Korean issuer.

KEXIM was established in 1976 as a special governmental financial institution pursuant to the Export-Import Bank of Korea Act to promote the sound development of the Korean economy and economic cooperation with foreign countries by extending the financial aid required for export and import transactions, overseas investment and the development of natural resources abroad.

May 11, 2007

Cleary Gottlieb won a SDNY motion for the Republic of Slovenia in a dispute over rights to certain assets in New York claimed by Yugoimport, an agency of the former Yugoslavia. On May 11, Senior Judge Charles S. Haight issued a decision that refers interpleader claims involving Yugoimport assets to the Standing Joint Committee established under the June 29, 2001 Succession Agreement among the five successor states to the former Yugoslavia.

The dispute arose over claims to a deposit at the Bank of New York in the name of Yugoimport. Yugoimport, a successor to the Federal Directorate of Supply and Procurement of the former Yugoslavia, argued that Yugoimport is a private Serbian company entitled to the BNY deposit. Slovenia and the Republic of Croatia argued that Federal Directorate was a "department" or "agency" of the former Yugoslavia, requiring allocation of Yugoimport’s BNY deposit under the Succession Agreement. The court concluded that the case should be referred to the Standing Joint Committee because the dispute requires interpretation of the Succession Agreement.

Feb 20, 2007

Cleary Gottlieb represented The Export-Import Bank of Korea ("KEXIM") in its SEC-registered offering of €750 million 4.625% notes due 2017. The transaction was a takedown from KEXIM’s shelf registration statement under Schedule B. The closing took place on February 20, 2007.

The notes were listed on the Singapore Stock Exchange. Citigroup, DEPFA Bank, Deutsche Bank, Merrill Lynch and UBS were the joint lead managers and bookrunners for the offering.

KEXIM was established in 1976 as a special governmental financial institution pursuant to the Export-Import Bank of Korea Act to promote the sound development of the Korean economy and economic cooperation with foreign countries by extending the financial aid required for export and import transactions, overseas investment and the development of natural resources abroad.

Jan 11, 2007

Cleary Gottlieb represented Mittal Steel in the review by the new Government of Liberia of the mining development agreement signed in August 2005, which gave Mittal access to about 1 billion metric tons of rich iron ore reserves in Western Liberia.

Following the election of Ms. Ellen Johnson Sirleaf to office in November 2005, the new Government of Liberia, while recognizing the validity of the contracts signed by the predecessor transitional government, launched a review process involving all significant investor agreements. Mittal agreed to cooperate with this review process. The parties eventually engaged in long and strenuous renegotiations of certain matters regarding allocation of ownership and control rights over existing infrastructure, tax and customs treatment, guarantee of project execution and project-related environmental obligations. An Amendment to the mineral development agreement was signed in Monrovia on December 28, 2006. The Amendment, which remains subject to ratification by the Liberian Legislature, confirms the parties’ commitment to the project, with Mittal expected to invest more than $1 billion over the life of the project for mine development, related railway and port infrastructure and community development.