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4. Bid/offer spread on the private placement note and
on the contingent note.
The foregoing should be viewed as a summary of the
Merrill Lynch proposal. [Redacted material deleted.]
Merrill Lynch's partnership proposal, and specifically the
partnership's purchase of private placement notes (PPNs) and
their subsequent sale for approximately 80 percent cash and 20
percent LIBOR notes, was intended to comply with the contingent
installment sale provisions and ratable basis recovery rules
under section 453 and section 15A.453-1(c), Temporary Income Tax
Regs., 46 Fed. Reg. 10709 (Feb. 4, 1981).
Merrill Lynch's role was to manage all aspects of the
transactions, including enlisting the foreign partner, serving as
a financial adviser to the partnership, arranging for the
purchase and sale of the PPNs, and arranging for the purchase and
sale of the LIBOR notes.
On February 7, 1990, O'Brien wrote a memorandum to McManaman
regarding investment of the proceeds that Brunswick would derive
from the sale of its Technical businesses. O'Brien suggested
that Brunswick's need for investment advice should be used as a
"vehicle to acquaint ourselves with the investment expertise of a
sophisticated financial institution with worldwide marketplace
experience."
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