Doral Financial in $625 Million Recapitalization

July 19, 2007

Cleary Gottlieb advised Doral Financial, a Puerto Rico-based bank holding company, in a recapitalization transaction to refinance the company’s $625 million notes due July 20, 2007. The transaction was completed on July 19, 2007.

The recapitalization transaction entailed an equity investment of $610 million in Doral by a newly formed bank holding company in which, among other investors, Bear Stearns Merchant Banking and funds managed by Marathon Asset Management, Perry Capital, the D. E. Shaw group, Tennenbaum Capital Partners, Eton Park Capital Management, Goldman Sachs, Canyon Capital Advisors and GE Asset Management invested. The transaction, which received significant press coverage as one of the first controlling investments by private equity firms in the U.S. banking sector, was announced on May 15.

Cleary Gottlieb also represented Doral Financial in connection with the various lawsuits and investigations initiated following Doral’s announcement of the need to restate the company’s financial statements in April 2005, successfully concluding a settlement with the SEC in September 2006 and an omnibus settlement of securities class action and shareholder derivative litigation that received final court approval on July 17, 2007.