Fiat in €1 Billion Debt Deal

May 12, 2006

Cleary Gottlieb acted as Italian, U.S. and international counsel to issuer Fiat Finance and Trade Ltd. société anonyme and guarantor Fiat S.p.A. in Fiat Finance’s sale of €1 billion of 5.625% five year notes. The notes were the first takedown from Fiat’s €15 billion Reg S/Rule 144A Global Medium Term Note (GMTN) Programme, that Fiat recently reactivated after a hiatus of several years. Cleary Gottlieb also represented Fiat and each of the eligible issuers under the Programme (Fiat Finance, Fiat Finance North America and Fiat Finance Canada Ltd.) in connection with that update.

The offering confirmed the significant degree of interest in Fiat paper on the part of non-U.S. institutional investors, coming shortly after Fiat Finance’s issuance of a €1 billion benchmark deal in February, a deal in which Cleary Gottlieb also acted as Italian, U.S. and English counsel to the issuer and guarantor. The new deal was launched virtually simultaneously with Fiat’s release of positive results for the first quarter of 2006, which were marked by a significant improvement in trading profit at each of its sectors, especially Fiat Auto.

Fiat, the parent company of one of Italy’s largest industrial groups, is engaged principally in the manufacture and sale of automobiles, commercial vehicles, agricultural and construction equipment, and other automotive-related products and systems. Fiat Finance is a finance vehicle wholly owned by Fiat.

MTN programmes allow issuers to sell a wide range of debt securities without the need for extensive documentation at each issuance, thereby reducing transaction costs. This facilitates offerings of smaller amounts of securities than with other programmes and assists issuers in more precisely managing their liabilities and cash. Fiat will be using the proceeds from this takedown to refinance existing bank debt at a more favorable interest rate.