ACM Partnership, Southampton-Hamilton Company, Tax Matters Partner - Page 87

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          Markets Desk at the New York Branch of Sparekassen SDS                      
          (Sparekassen).9  Pepe proposed a transaction involving the                  
          purchase of the BFCE LIBOR Notes by Sparekassen and collateral              
          swaps that provided Sparekassen with risk protection and an                 
          attractive return.  Schickner was already familiar with the                 
          transaction structure; at about the same time, Pepe offered him             
          one or two similar deals in connection with other section 453               
          partnerships.  On December 5, in order to conclude the deal,                
          Schickner notified the bank's headquarters in Copenhagen that he            
          was reserving a credit line in the amount of $10 million.                   
               The third partnership meeting took place on December 12,               
          1989, in Curacao.  On behalf of Southampton, Pohlschroeder served           
          notice of an adjustment in the Yield Component, whereby                     
          Southampton elected to increase its share of interest rate                  
          exposure to 39.7 percent.  Next, the Committee voted to accede to           
          a Colgate proposal to exchange $4.7 million aggregate principal             
          amount of the Long Bonds plus $4,165 cash payment for $5 million            
          aggregate principal amount of new 3-1/2 year fixed rate debt.               
               Macauley Taylor next stated that the debt exchange                     
               contemplated by the foregoing resolutions would reduce                 
               the Partnership's exposure to the risk of interest rate                
               fluctuations and recommended that the Partnership                      
               reduce its position in the variable rate instruments                   
               purchased to hedge against such exposure.  He reported                 
               that a reduction of approximately 30 percent in the                    

               9 During 1989, Sparekassen was the largest savings bank in             
          Denmark.  Later, in the same year, it merged with the two other             
          banks to form Unibank.  We refer to the bank at all times as                
          Sparekassen.                                                                




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