- 125 -
there is no evidence in the record, that the purpose of Radcliffe
and of BOT for using cash as collateral for the Bangkok Bank LA
branch and Union Bank loans at issue was to obtain lower interest
rates on any of those loans.91
Based on our review of the entire record in these cases,
petitioner has failed to persuade us that the Bank transactions
took the form they did because, by using cash as collateral for
the loans at issue from the U.S. banks in question, Radcliffe and
BOT were able to obtain lower interest rates on those loans than
would have been charged had those loans been secured by second
deeds of trust on real estate.92
90(...continued)
interest rate on any of those loans. This is because, to the
extent the record shows such interest rates, they were the same.
91 In fact, the record does not indicate that petitioner even
investigated whether to place additional encumbrances on the
respective real estate held by NMSC and by 300 Montgomery As-
sociates before arranging the pledges of cash deposits that, in
form, collateralized the Bank loans.
92 A further circumstance weighing against that purported pur-
pose for the form of those transactions is Radcliffe's request
that Bangkok Bank LA branch raise the interest rate on BB Loan
No. 2. After the Traveluck $1,625,000 CD was replaced by the
Double Wealth $1,625,000 CD as security for that loan in July
1985, Bangkok Bank LA branch issued to Double Wealth two succes-
sive one-month certificates of deposit that matured in August and
September 1985, respectively, and that bore interest at the rate
of 7 percent, which was .5 percent below the 7.5 percent interest
rate on BB Loan No. 2 during that time. Records of Bangkok Bank
LA branch indicate that, by telex dated Aug. 17, 1985, Bangkok
Bank HK branch informed Bangkok Bank LA branch that Radcliffe
preferred to have the interest rate on BB Loan No. 2 set at 8.25
percent until that loan was due on June 11, 1986. That cir-
cumstance indicates that Radcliffe did not seek to minimize the
(continued...)
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