- 4 - terms were most favorable. In 1977, City had notes payable of more than $70 million to U.S. banks pursuant to a revolving credit agreement dated April 1, 1975. The notes bore interest at a floating rate of one-half percentage point above the prime rate, and the notes had maturities of 3 to 7 years. In order to obtain long-term financing at a fixed rate and to reduce the amount of indebtedness owed to the U.S. banks under the revolving credit agreement, City sought access to the Eurobond market. Eurobond Market/Use of Netherlands Antilles Finance Subsidiaries3 During the years at issue, a major capital market outside the United States was the Eurobond market. The Eurobond market was not an organized exchange but rather a network of underwriters and financial institutions that marketed bonds issued by private corporations (including, but not limited to, finance subsidiaries of U.S. companies), foreign governments and their agencies, and other borrowers. In addition to individuals, purchasers of the bonds included institutions such as banks (frequently purchasing on behalf of investors with custodial accounts managed by the banks), investment companies, insurance companies, and pension funds. There was a liquid and well- capitalized secondary market for the bonds with rules of fair practice enforced by the Association of International Bond 3 The description which follows is based upon the parties’ stipulations.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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