Saba Partnership, Brunswick Corporation, Tax Matters Partnership - Page 85




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              The Fuji and Norinchukin hedge swaps were designed to allow             
         the banks to transform their liabilities under the LIBOR notes to            
         an amortizing liability at an interest rate below LIBOR.                     
         Consequently, the Fuji and Norinchukin hedge swaps effectively               
         converted the transactions, from the banks' perspective, to                  
         synthetic funding below the banks' funding rates.  Further, the              
         banks' payments under the hedge swaps were much less volatile                
         than the payments required to be made under the LIBOR notes.                 
              B.  Sodbury-ABN-Merrill Lynch Swaps                                     
              Sodbury entered into interest rate swaps with ABN and ABN               
         entered into mirror swaps with Merrill Lynch to reduce Sodbury's             
         and ABN's interest rate risk associated with the 4 LIBOR notes               
         held by Saba.                                                                
              C.  Bank of Tokyo Swaps                                                 
              Effective September 6, 1990, Merrill Lynch and BOT executed             
         a swap in connection with BOT's purchase of the 3 LIBOR notes                
         from Brunswick.  The swap, which was designed to replicate the               
         economic effect of investing in an amortizing loan that paid a               
         margin over LIBOR, effectively converted the purchase of the                 
         LIBOR notes, from BOT's perspective, to a synthetic amortizing               
         asset at a rate above BOT's normal financing rate.                           
              D.  Banque Francaise du Commerce Exterieur Swaps                        
              Effective January 2, 1991, Merrill Lynch and BFCE executed a            
         swap in connection with BOT's assignment of the Norinchukin LIBOR            





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