Bank Capital Markets

S&C is a leading law firm in innovative domestic and international bank securities offerings. In late 2007 and early 2008, our Firm took the lead in advising on a number of sovereign wealth fund capital investments in leading U.S. banks, in a role that The Wall Street Journal called “a front row seat for one of the biggest developments in the financial world in 2007.” This work was an outgrowth of the Firm’s pioneering efforts in nearly every major development in the new generation of securities designed to provide financial institutions with equity-like treatment for capital purposes and debt-like treatment (e.g., deductible interest expense) for tax purposes.

Our Firm represented the following parties in capital raising transactions:

• Citigroup in the sale of $12.5 billion in optionally convertible securities to a group that includes the Government of Singapore Investment Corporation (GIC), Capital Research Global Investors, Capital World Investors, the Kuwait Investment Authority and the New Jersey Division of Investment (2008) and, separately, in the sale of $7.5 billion in mandatorily convertible securities to the Abu Dhabi Investment Authority (2008);
• Barclays PLC in the sale of a 2.1% stake for approximately $2.0 billion to Temasek Holdings (Pte) Ltd. (2007) and, separately, in an approximately $8.87 billion capital raising through a firm placing and open offer involving various investors including sovereign wealth funds Qatar Investment Authority and Temasek Holdings (2008);
• UBS in the sale of $11.6 billion in mandatorily convertible securities to two entities, including GIC (2007);
• Merrill Lynch in the sale of $6.6 billion in mandatorily convertible securities to the Korea Investment Corporation, the Kuwait Investment Authority and Mizuho Financial Group Inc., among others (2008), and, separately, in both the private placement of $6.2 billion of Merrill Lynch common stock with Temasek Holdings and Davis Selected Advisors (2007), as well as in the sale of approximately $2.5 billion in new shares to Temasek Holdings (Private) Limited through Temasek’s participation in a $8.5 billion public share offering (2008); and
• China Investment Corporation in the purchase of $5.6 billion in mandatorily convertible securities from Morgan Stanley (2007).

The Firm continues to advise on the new generation of debt-equity hybrid securities for which our Firm has been the leading law firm since the mid-1990s, when we played a central role in the creation of trust preferred securities. In 2007, we participated in approximately 50 offerings of this type (by more than 30 different issuers) with an approximate aggregate value of $60 billion. The Firm worked on hybrid offerings by AIG, Australia and New Zealand Banking Group, Barclays Bank, CEMEX, Goldman Sachs, The Hartford Financial Services Group, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Wachovia, Washington Mutual and Wells Fargo.

Other recent bank capital markets matters include advising:

• the underwriters in the offering of $1 billion 5.625% Subordinated Notes due 2016 by Federal Home Loan Bank of Chicago—the first subordinated debt offering by a Federal Home Loan Bank (FHLB) and the first time an individual Home Loan Bank issued its own debt as opposed to consolidated obligations issued jointly by all 12 government-sponsored Federal Home Loan Banks that comprise the Federal Home Loan Bank System (June 2006); and
• the Bank of China in its $11.8 billion privatization and IPO, including a Rule 144A offering in the United States, a Regulation S offering outside of the United States, a public offering and listing in Hong Kong and a public offering without listing in Japan—the largest IPO in the world since 2000 and the largest equity offering ever by a PRC company (June 2006).