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HGI requested and received the consent of each of the banks to
the issuance of the 1977 HGI note, as required by the revolving
credit agreement.
City prepared an offering circular for prospective
purchasers of the notes to be sold by Finance in 1977 which
disclosed that City’s $13,200,000 capital contribution to Finance
would be lent by Finance to HGI and that Finance’s capital
thereafter included the 1977 HGI note. The audited financial
statements of both City and HGI were included in the offering
circular.
2. Finance’s 1977 Issuance of Notes
On May 5, 1977, Finance was the named issuer of $30 million
of 8-3/4-percent notes on the Eurobond market, due May 1, 1984
(8-3/4-percent notes). Interest on the notes at the stated rate
was payable annually. The 8-3/4-percent notes also provided that
the issuer would, in general, indemnify the holders with respect
to any withholding taxes that might be imposed by the United
States or the Netherlands Antilles with respect to the payments
under the 8-3/4-percent notes, by providing for the payment of
additional interest sufficient to make the interest payment equal
to the stated rate.4 Finance’s obligations to make principal and
4 The 8-3/4-percent notes further provided the issuer with a
right to redeem in the event that the foregoing additional
interest became payable.
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Last modified: May 25, 2011