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Capital Markets
Cleary Gottlieb is an acknowledged leader in U.S. and international capital markets practice. Issuers and market participants throughout the world rely on us for the most current advice on disclosure and corporate governance matters, corporate and securities regulatory issues and transactional structuring. We regularly advise issuers and underwriters throughout the world on company-critical and precedent-setting financings, which span the spectrum of capital markets transactions. The firm was among the first to recognize the importance of the global marketplace, with the opening of its Paris office in 1949. The scope and depth of our international resources are among the firm’s historic strengths and allow us to offer clients seamless advice across markets in their worldwide financing activities.
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Dec 11, 2008
Cleary Gottlieb acted as counsel to BNP Paribas and Crédit Agricole in connection with the issuance of €2.55 billion and €3.0 billion, respectively, of deeply subordinated perpetual securities to a French state-owned entity as part of the French bank recapitalization program. The deals priced on December 10 and closed on December 11.
The securities were issued to the Société de Prise de Participation de l’Etat (SPPE), a company established by the French State as part of the government’s plan to provide capital and liquidity to French banks. SPPE is one of two companies established under this program. Its role is to invest in equity and hybrid equity instruments, while the other company provides short and medium-term debt financing to French banks.
BNP Paribas and Crédit Agricole were among six French banks that issued a total of €10.5 billion of hybrid securities to SPPE in its first investment round. The issuances followed the approval by the European Commission of the SPPE program, under European State Aid rules that limit the ability of EU Member States to provide subsidies to companies.
The securities are deeply subordinated, perpetual notes that qualify as “Tier 1” capital for bank regulatory purposes. Their terms are similar to other such securities that have been issued by the banks in the past. However, the banks also undertook in a separate agreement to pay a premium upon repurchase or redemption of the securities, with the amount of the premium increasing annually. This was part of the deal reached with the European Commission, which sought terms that will encourage the banks to repay the notes as soon as possible.
Cleary Gottlieb also represented Natixis in connection with its issuance of €1.9 billion of similar deeply subordinated notes to its principal shareholders, Banque Fédérale des Banques Populaires and Caisse Nationale des Caisses d’Epargne. Each of the shareholders issued its own deeply subordinated notes to SPPE under the French recapitalization program, and in turn used most of the proceeds to subscribe to back-to-back issues by Natixis.
Jan 25, 2008
Cleary Gottlieb represented Citi in 10 concurrent offerings of $19 billion of convertible preferred stock and straight preferred stock. The offerings involved six individually negotiated private placements of $12.5 billion of convertible preferred stock to the Government of Singapore Investment Corporation, the Kuwait Investment Authority, HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Capital Research mutual funds, the New Jersey Division of Investment and Citi's former Chairman and CEO Sandy Weill, as well as a $3.17 billion public offering of convertible preferred stock and a $3.72 billion public offering of straight preferred stock. The private and public convertible preferred stock offerings closed on January 23 and the straight preferred stock offering closed on January 25.
Cleary Gottlieb represented Citi on the private placements, and represented the underwriters, led by Citi Global Markets, for the public offerings. Cleary Gottlieb also served as disclosure counsel to Citi in connection with its year-end earnings release.
Sep 08, 2008
Cleary Gottlieb acted for Morgan Stanley, which was in turn the advisor to the United States Treasury, in connection with the conservatorship of Fannie Mae and Freddie Mac described in the press as “the most dramatic market intervention in years.”
As detailed in an announcement by Treasury Secretary Henry Paulson on September 7, the two companies have been placed into conservatorship. As a result, the Federal Housing Finance Agency, Fannie Mae’s and Freddie Mac’s regulator, has gained management control of the companies. Treasury has also established preferred stock purchase agreements with Fannie Mae and Freddie Mac under which Treasury could be required to provide as much as $100 billion to each of the companies, established a new secured lending credit facility for the companies, and initiated a temporary program to purchase Fannie Mae and Freddie Mac's mortgage backed securities in the open market.
Feb 01, 2008
Cleary Gottlieb represented the underwriters, led by Kotak Mahindra Capital Company and UBS Securities India, in an initial public offering by Reliance Power Limited of 260,000,000 equity shares listed on the Bombay Stock Exchange and the National Stock Exchange of India. The $2.93 billion offering is the largest IPO in Indian history. The transaction closed on February 1.
The global offering was made to investors under Regulation S and Rule 144A.
Reliance Power is developing 13 power projects in India with a combined capacity of over 28 gigawatts at a projected cost of $28.5 billion. Reliance Power is an affiliate of the Reliance ADA Group, one of the largest business houses in India, comprising companies in the telecommunications, financial services, media and entertainment, infrastructure, energy and other sectors.
Mar 26, 2007
Cleary Gottlieb acted as U.S., English and Russian counsel to Sberbank, Russia’s largest bank, in its $8.85 billion equity offering, which closed on March 26. The Russian subsidiaries of Credit Suisse and JP Morgan acted as brokers for the offering. Sberbank’s offering is the first public equity offering of a Russian bank and is the second-largest Russian equity offering to date (the largest being the July 2006 $10.6 billion Rosneft offering, on which Cleary Gottlieb also advised the issuer).
The offering was carried out under Russian procedures for an open subscription of shares, using only a Russian statutory prospectus. Current shareholders, exercising their preemptive rights, took up approximately $5.6 billion of the offering; new investors took up the remainder.
Aug 01, 2008
Cleary Gottlieb is representing Temasek in its $3.4 billion investment in Merrill Lynch. Temasek is currently Merrill Lynch’s largest shareholder following its $5 billion initial investment in December 2007. Temasek is an investment holding company owned by the Singapore government with staff of over 300 people and a portfolio of over $100 billion focused primarily in Asia.
The Share Subscription Agreement was signed on July 28, 2008. Temasek committed to purchase $3.4 billion of common stock in a public offering by Merrill Lynch, which priced on July 29, 2008, at $22.50 per share. The First Closing occurred on August 1, 2008 together with the Public Offering. Under the terms of the Share Subscription Agreement, Temasek was entitled to receive from Merrill Lynch $2.5 billion of this stock in settlement of Merrill Lynch’s obligations under price reset provisions of the initial investment in December 2007. Temasek also agreed to invest an additional $900 million in new funds in the public offering. A portion of the total commitment is subject to regulatory approvals.
May 05, 2008
Cleary Gottlieb acted as Italian, U.S. and English counsel to Molecular Medicine S.p.A. in its initial public offering of 26,116,952 ordinary shares. The offering is a public offering to retail investors in Italy and a Regulation S offering to institutional investors outside the United States. The shares have been listed on the Mercato Telematico Azionario managed by the Borsa Italiana S.p.A. The offering is notable as one of the very few initial public offerings successfullly completed in Europe in the first half of 2008, with the transaction team having to overcome significant turbulence in both the Italian and international capital markets. The €56 million IPO closed on March 5.
Molecular Medicine is a medical biotechnology company focused on the discovery, development and clinical validation of innovative therapies for tumor treatment. MolMed, incorporated in July 1996, is based in Milan. The company originates from the experience of a group of scientists of the San Raffaele Scientific Institute of Milan, headed by Professor Claudio Bordignon, one of the most eminent Italian research scientists. MolMed is often referred to by the press as one of Italy’s most prestigious research companies.
Dec 12, 2007
Cleary Gottlieb advised the sponsor, Deutsche Bank, and the joint bookrunners, Credit Suisse Securities (Europe) Limited, Morgan Stanley Securities Limited and ABN AMRO Rothschild, in the initial public offering by Eurasian Natural Resources Corporation plc of 252,500,000 ordinary shares on the London Stock Exchange. The transaction, one of the first in which Cleary Gottlieb advised on all aspects of a primary London listing of a UK-incorporated company post the adoption of the Prospectus Directive, raised over $2.7 billion, valued the company at approximately $15 billion and was one of the London Stock Exchange’s largest IPOs in 2007. The transaction closed on December 12, 2007.
ENRC is a diversified natural resources group with integrated mining, processing, energy, logistical and marketing operations. The group’s production assets are located primarily in Kazakhstan, where it employs approximately 62,000 people and, in 2006, accounted for 4% of the country’s GDP.
Jun 25, 2007
Cleary Gottlieb represented Companhia Vale do Rio Doce, the world’s largest iron ore miner, in its $1.88 billion mandatorily convertible bond offering, the largest corporate convertible bond offering ever by a Latin American borrower. The offering was comprised of two series: $1.30 billion of 5.50% Guaranteed Notes due 2010 (Series RIO) and $584.54 million of 5.50% Guaranteed Notes due 2010 (Series RIO P). On the maturity date, the series will convert into ADSs representing common CVRD shares and preferred class A CVRD shares. The deal closed on June 25.
The offering was SEC-registered, using an automatic shelf registration statement filed the morning the deal was launched.
Oct 11, 2007
Cleary Gottlieb represented Sony Corporation as selling shareholder in its international initial public offering of the common stock of Sony Financial Holdings Inc. The IPO, which raised $2.7 billion for Sony in the secondary offering, as well as $270 million of new capital for SFH, closed on October 11. The IPO was the largest in Japan this year.
The international offering consisted of SFH common shares sold in offshore transactions outside the United States in reliance on Regulation S and to qualified institutional buyers in the U.S. under Rule 144A. With the international offering, shares were offered in Japan by Sony and by SFH after SFH’s listing on the first section of the Tokyo Stock Exchange. Sony’s stake in SFH was reduced to 60 percent from 100 percent as a result of the IPO.
SFH, the holding company for Sony Life Insurance Co., Sony Assurance, Inc., and Sony Bank, accounted for nine percent of Sony’s group revenue in 2006.
JPMorgan and Nomura International acted as international joint lead managers and bookrunners.
Jun 18, 2008
Cleary Gottlieb represented the Bolsa Mexicana de Valores, S.A.B. de C.V. in its initial public offering and the listing of its Series A common shares on the Mexican Stock Exchange. The initial public offering included both a public offering in Mexico and an international private placement with institutional investors (including in the United States under Rule 144A). The combined offering generated approximately $385 million in aggregate proceeds for the Bolsa, with approximately 220 million shares sold. The deal closed on June 18.
The Bolsa is the sole equity and derivatives exchange operator in Mexico. With the proceeds of the offering, the Bolsa will acquire additional equity interests in related companies—Fideicomiso F/30430 Asigna, the central counterparty for the Mexican derivatives exchange, Compensación y Liquidación, Contraparte Central de Valores de México, S.A. de C.V., the clearing agent and counterparty for all equity transactions executed on the Bolsa, Mercado Mexicano de Derivados, S.A. de C.V., the Mexican derivatives exchange, which was previously a subsidiary of the Bolsa, and S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., the central securities depository of Mexico—in order to create a more vertically-integrated stock exchange.
Dec 04, 2007
Cleary Gottlieb is acting as international counsel to ArcelorMittal in its planned cash tender offer, announced December 4, to acquire the 43% that it does not already own of outstanding shares in ArcelorMittal Inox Brasil S.A. (formerly Acesita S.A.).
The shares eligible to be tendered in the offer represent a value of R$3.2 billion, or US$1.75 billion, at the offer price of R$100 per share. The offer is subject to Brazilian regulatory approvals. If more than two-thirds of eligible shares are tendered, ArcelorMittal Inox Brasil’s shares will be delisted in Brazil.
ArcelorMittal Inox Brasil is the only integrated producer of flat stainless and silicon steel in Latin America.
ArcelorMittal is the world’s number one steel company, with 320,000 employees in over 60 countries. Cleary Gottlieb represented Mittal Steel in its successful tender offer for Arcelor and subsequent two-step back-end merger. Cleary Gottlieb has also represented ArcelorMittal in its two other going-private transactions involving the former Arcelor’s Latin American subsidiaries (Arcelor Brasil in Brazil and Acindar in Argentina).
Aug 17, 2007
Cleary Gottlieb represented the underwriters, led by Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc., in VMware Inc.’s initial public offering of 37,950,000 shares of Class A common stock (including exercise of an over-allotment option), the largest technology sector IPO since Google went public in 2004. The offering priced on August 13 at $29 per share, valuing VMware at $11 billion; by close of the first day of trading on the NYSE, VMware was valued at nearly $20 billion, a market cap few other technology companies have exceeded. In the two weeks following pricing, VMware shares have traded as high as $73.95. The offering closed on August 17.
Prior to the IPO, VMware was wholly owned by EMC Corporation. EMC continues to own approximately 90% of VMware.
VMware is the leading provider of virtualization solutions, with a customer base that includes 100% of the Fortune 100 and more than 84% of the Fortune 1,000. VMware’s core virtualization technology enables multiple software applications and operating systems to share underlying hardware (such as a single server) safely by encapsulating each application and operating system in its own "virtual machine." VMware’s suite of virtualization solutions addresses a range of complex IT problems that include infrastructure optimization, business continuity, software lifecycle management and desktop management.
Apr 30, 2008
Cleary Gottlieb represented Natixis in two offerings of deeply subordinated notes that will constitute Tier 1 capital for Natixis. The first offering, worth $300 million, closed April 16. The joint lead managers were HSBC, Natixis Funding and UBS Investment Bank and the notes have been listed on the Luxembourg Stock Exchange. The second offering, worth $750 million, was the first Tier 1 offering by Natixis under Rule 144A. Merrill Lynch, Morgan Stanley and Natixis Bleichroeder acted as joint lead managers for the second offering, which closed April 30, and the notes are expected to be listed on the Luxembourg Stock Exchange.
Natixis (formerly known as Natexis Banques Populaires) is the corporate and investment banking affiliate of the Groupe Caisse d’Epargne and Groupe Banque Populaire, two leading French mutual banking groups. It was formed in November 2006 through the combination of more than a dozen banking affiliates of the two groups. Cleary Gottlieb represented Natixis in the share offering that accompanied the combination.
Tier 1 transactions involve the issuance of securities with debt-like features, which are counted as core capital under regulations that require banks to maintain minimum capital levels as a percentage of their risk-adjusted assets.
Mar 25, 2008
Cleary Gottlieb is representing Goldman, Sachs & Co. as underwriter in Liberty Lane Acquisition Corp.’s initial public offering, which is expected to raise $350 million. This transaction is Goldman's first "Blank Check" IPO and makes significant changes to the typical structure of such offerings. The IPO filed on March 25.
Liberty Lane Acquisition Corp. is a blank check company (also called a special purpose acquisition company,) recently formed to acquire one or more operating businesses through a merger, stock exchange, asset acquisition, reorganization or similar business combination.
Global Capital Markets Law Firm of the Year
Chambers Global (2007)
Capital Markets Team of the Year
Chambers USA (2007)
Americas Debt & Equity-Linked Deal of the Year
(Citigroup’s $7.5 billion sale of Upper DECS
Equity Units to Abu Dhabi Investment Authority)
International Financial Law Review (2007)
U.S. Equity Issue of the Year
(VMWare’s IPO)
International Financing Review (2007)
Latin America Deal of the Year
(TAM's $300 million bond offering)
AirFinance Journal (2007)
U.S. IPO of the Year and Equity Deal of the Year
(Mastercard’s IPO)
International Financing Review, International Financial Law Review (2006)
Korea Deal of the Year, Asia Equity Deal of the Year
(Samsung Card’s IPO)
FinanceAsia (2007)
International Financial Law Review (2007)
Asia-Pacific Equity Issue of the Year and IPO of the Year
(Sony Financial’s IPO)
International Financing Review, Thomson Financial DealWatch (2007)
Deal of the Year
(Lotte Shopping’s IPO)
Asian-Counsel (2006)
Best Local Currency Deal
(América Móvil’s 8 billion peso 2036 Offering)
LatinFinance (2007)
Best Follow-On Equity Deal
(Usiminas’ $1 billion equity offering)
LatinFinance (2007)
Debt & Equity-Linked Deal of the Year
(Deutsche Bank's $200 million contingent note offering)
International Financial Law Review (2007)
CEEMEA Equity Issue of the Year
(Rosneft's IPO)
International Financing Review (2006)
#3 Managers’ Counsel in Global Bonds
Bloomberg (2007 Rankings, volume and deal count)
#1 Issuers’ Counsel in Euromarket High Yield (excluding emerging markets)
Bloomberg (2007 Rankings, volume and deal count)
#2 Managers’ Counsel in EMEA IPOs
Bloomberg (2007 Rankings, volume and deal count)
#3 Issuers’ Counsel in Euromarket Bonds
Bloomberg (2007 Rankings, U.S.-based law firms, volume)
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Chambers Latin America (2008)
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