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its loans to Kannex as well as to other special purpose
corporations that ABN Trust had organized for section 453
partnerships. The participations ABN proposed were short-term
and renewable. ABN would guarantee an interest rate of LIBOR
plus 35 basis points or 50 basis points. ABN would possess the
exclusive right to enforce the loan.
ABN's relationship to Kannex was a source of some confusion.
An internal memorandum of Banco di Roma outlining the syndication
proposal described ABN as a "shareholder in Kannex together with
another major U.S. Corporation". In the attempt to reassure
prospective investors that their principal would be secure, den
Baas went further than the terms of the formal Participation
Agreement in defining ABN's position in the arrangements: "Since
there is neither a scheduled interest payment on the notes held
in the portfolio nor a principal repayment you would look even
more to ABN to take you out at the maturity date of the loan".
Within Banco di Roma, the participation was recommended for
approval with the following explanatory gloss: "The repayment
source of our advance is the committed facility provided by ABN
through its Curacao or Grand Cayman Branch." The memorandum
concludes: "Taking into consideration: The de facto guarantee
of ABN, * * * we recommend your authorization to participate".
An internal credit proposal of Banco Espirito Santo E Comercial
De Lisboa (Banco Espirito Santo) reflects a similar
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