PNC in $375 Million Hybrid Securities Offering

February 19, 2008

Cleary Gottlieb represented PNC Financial Services Group, Inc. in a Rule 144A offering of fixed-to-floating rate non-cumulative exchangeable perpetual trust securities to institutional investors by a subsidiary of PNC. The offering priced on February 11, and closed February 19.

The securities offered to investors were issued by a Delaware trust and mirror the terms of preferred securities held by the trust that were issued by a Delaware LLC, which in turn holds mortgage loans and home equity installment loans directly and indirectly contributed by PNC Bank, National Association. Investors will receive a fixed rate of 8.7%, payable quarterly, for the first 5 years following issuance and a LIBOR-based floating rate thereafter. Under certain circumstances, the securities will be exchangeable into a series of preferred securities of PNC at the direction of the Office of the Comptroller of the Currency.

The offering was hailed in EuroWeek as a “landmark deal in [the U.S. hybrid capital market, which] has been a moribund sector for at least six months.”

The deal was structured to ensure that the securities will qualify for Tier 1 treatment by the Office of the Comptroller of the Currency and will receive favorable state and federal tax treatment. Structuring for the offering required consultation with the Office of the Comptroller of the Currency and Moody’s Investors Service and the extensive participation of Cleary Gottlieb tax lawyers.

PNC is one of the largest diversified financial services companies in the U.S., based on assets, operating businesses engaged in retail banking, corporate and institutional banking, asset management and global fund processing services.