ACM Partnership, Southampton-Hamilton Company, Tax Matters Partner - Page 109

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                    Flow of Benefits in 11/17/89 Structured Transaction               
                                      Diagram 1                                       
                                                                                     
          Purchase Citicorp Notes at the Bid                                          
          <                                                                           
          ACM            Expected benefit to Bank = $$       BoT/BFCE                 
                                                                                     
          Issue Contingent LIBOR Notes at the ask                                     
          =                                                                           
          Expected benefit to Bank = $                                                
                                                            Swaps                     
          AMerrill Capital puts the bank (BoT or BFCE) into the    Expected benefit   
          Postion of a dealer                                    to Merrill = $$$     
          ABank expects to benefit by executing transactions at                       
          Dealer prices (benefit shown as $ + $$)                              ?      
          AThrough swaps, most of the expected benefit of dealer                      
          Pricing is transferred back to Merrill (shown as $$$)      Merrill          
          ABank is left with sub-LIBOR funding, but has taken          Capital        
          Incremental credit risk                                                     

               Flow of Benefits in 12/22/89 Structured Transaction                    
                                      Diagram 2                                       
           Purchase Contingent LIBOR Notes at the Bid                                 
            Southampton                                    <  Sparekassen             
          Hamilton           Benefit to Bank = $$                                     

                                                            Hedge Swap                
          AMerrill Capital puts the bank (Sparekassen)into the         Benefit to     
          Position of a dealer                    Merrill = $                         
          ABank benefits by executing transacation at a dealer's                      
          Price (benefit shown as $$)                                                 
          AThrough Hedge Swap, most of the benefit of dealer                       ?  
          Pricing is transferred back to Merrill (shown as $)           Merrill       
          ABank is left with above-market asset, but has taken          Capital       
          Incremental credit risk                                                     
















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