To The Rescue 2410


Published on


Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

To The Rescue 2410

  1. 1. 24 October 2008 Market Economics, Credit Strategy & Interest Rate Strategy To The Rescue Policy Measures - Overview 1 This document, prepared jointly by Economic Research, Credit Research and Interest Rate Strategy summarises the main measures taken so far in Capital Injections Measures 2 response to the financial crisis. It will be updated daily. New Debt Issuance Guarantees 4 Other Measures 6 Implications for Government The most recent developments as of this morning … Bonds Supply in the Eurozone 9 The Canadian authorities yesterday unveiled the details of their plan to shore up confidence in their financial system. Under the program, the Canadian Lenders Assurance Facility will provide guarantees up to CAD218bn (14.2% of GDP) for new debt issuance by financial institutions. The insurance will be provided at an annualized fee of 135bp plus a surcharge depending on the rating of the financial institution. The debt guarantees add to the plan announced on October 10, under which the government will purchase up to CAD25bn (1.5% of GDP) of mortgage pools through the Canada Mortgage and Housing Corporation (CMHC). Contacts In the US, the Treasury is reportedly discussing a possible guarantee on the repayment of troubled loans. The lender in Market Economics turn would lower the interest rate and/or principal for the life Luigi Speranza of the loan. Tel.: 44 20 7595 8322 Email: The program would be restricted to situations where the Eoin O’Callaghan borrower's income is high enough to meet the revised Tel.: 44 20 7595 8226 schedule of payments. Email: According to the press, the US Treasury is also planning to Gizem Kara take stakes in a number of regional banks as part of the Tel.: 44 20 7595 8783 USD250bn programme to inject capital into financial Email: companies. Details of the plan might be announced as early Credit Research as today. Olivia Frieser Tel.: 44 20 7595 8591 The IMF, which is in negotiations with several countries to Email: provide emergency loan facilities, is reportedly also working to arrange a large credit line that would allow other countries Interest Rate Strategy to borrow US dollars. Patrick Jacq Tel.: 33 1 4316 9718 East Asian leaders have reportedly agreed to set up a Email: USD80bn fund by mid-2009 to fight the global economic crisis, though few specifics are available. Vishal Pathak Tel.: 44 20 7595 8295 Email:
  2. 2. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 1: Overview of the Policy Measures Amounts Pledged* Total* Note New Debt Capital Local Issuance Others EURbn % of GDP Injections Currency Guarantees Austria 15 85 100 100 37.0 Includes Dexia, Ethias Belgium 13.9 13.9 13.9 4.2 and Fortis Cyprus 2 2 2 12.8 Finland 4 50 54 54 30.1 France 40 320 360 360 19.0 Germany 80 400 480 480 20.0 Greece 5 15 8 28 28 12.3 Ireland 500 500 500 260.0 Includes deposit guarantee Italy 40 40 40 2.6 Luxembourg 2.9 2.9 2.9 8.0 Netherlands 36.8 200 236.8 236.8 41.6 Includes Fortis Portugal 20 20 20 12.3 Slovenia 8 8 8 24.0 Spain 100 50 150 150 14.3 Eurozone 200 1,378 418 1,996 1,996 22.4 Australia 8 8 4 0.7 Canada 218 25 243 151.8 15.8 Denmark 0.5 0.5 0.1 0.0 Plus losses over USD35bn on bank liabilites Norway 350 350 41 15.4 South Korea 100 100 74 10.3 Sweden 15 1,500 1,515 153 49.3 Switzerland 6 6 4 1.0 Capitalisation of UBS UK 50 250 300 385 21.4 Excludes Special Liquidity Scheme (GBP200bn) US 250 1,400* 450 2,100 1,623 15.2 Does not include Fed’s facilities, such as the MMIFF Note: * Includes capital injections, asset buying and guarantees on debt issuance. Excludes deposit guarantees, with the exception of Ireland where they are included *FDIC estimate of total size of unsecured debt falling under its guarantee Source: Reuters, Bloomberg, BNP Paribas. Most recent news are in bold 1 To the Rescue
  3. 3. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 2: Capital Injections Measures Scope Conditions Amount Austria Up to EUR15bn Option to buy banking shares Aaa/AAA (5.5% of GDP) Belgium Recapitalisation and guarantee of EUR13.9bn Aa1/AA+ Dexia and Fortis Cyprus Government has EUR2.0bn (12.8% EUR2.0bn of GDP) in reserve to bail out the Aa3/A+ (12.8% of GDP) banking sector (20/10) Statement from the ministry of finance suggested the possibility Sum not expected to exceed Finland of government investment in private No concrete details yet EUR4bn equity of viable and solvent Finnish banks. SPPE (originally set up to provide (21/10) SPPE buying subordinated capital to Dexia) can provide capital loans (Tier 1 capital) issued at base to other banks if needed rate (5 year OAT yield) + 400bp France Up to EUR40bn (21/10) French government will from the big six banks. Instruments Aaa/AAA (2.1% of GDP) inject EUR10.5bn into France’s have a 5yr call option at the issuer’s largest six banks in form of hybrid options and the banks must provide Tier 1 capital adequate financing to the economy. Set up of a "financial stabilisation Germany Banks that receive a capital Up to EUR80bn fund" with the authorisation to issue injection will have to cap executive (3.3% of GDP) can be used for Aaa/AAA until EUR100bn (4.1% of GDP) for pay and suspend dividends. recapitalisation banks refinancing Greece Government to boost the capital of Up to EUR5.0bn Greek banks by buying prefered A1/A (2.2% of GDP) shares with voting rights Approved on a case-by-case basis, Italy Minister of Finance authorised by and conditional on the Bank of law decree to provide capital to Unspecified Aa2/A+ Italy's evaluation of a 3-year banks for preferred shares restructuring plan Luxemb. EUR2.9bn Individual rescue aid to Dexia/Fortis Aaa/AAA (8.0% of GDP) Set up of EUR20bn fund to recapitalise banks + EUR16.8bn Neth. individual rescue aid to Fortis. EUR36.8bn Aaa/AAA ING will issue non-voting core Tier- 1 securities for EUR10bn to the fund. A winding up company owned and Banks will collectively pay up to capitalised (DKK500k) by the state DKK7.5bn in annual fees to the will primarily guarantee depositors winding up company. The winding and unsecured creditors of banks. up company may also raise loans to Denmark But in the process, if a bank fails to cover its funding requirements. The DKK0.5m capitalisation of winding Aaa/AAA meet capital adequacy ratios or is banks must cover the first DKK35bn up company plus any losses over declared bankrupt, its sale can be (15bn of which will be in fees) of the DKK35bn arranged to a designated buyer or company’s losses, with the state the winding up company can covering losses thereafter. purchase capital. Bank capitalisation program in the form of subordinated LT loan Russia (RUB950bn) No clarity on amount, assets, timing Baa1/BB+ National Welfare Fund (RUB785bn) will start investing locally No recapitisation plan but "should S. Korea the need arise to pursue such A2/A measures, the government will take proper actions” Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 2 To the Rescue
  4. 4. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 2: Capital Injections Measures (cont.) Scope Conditions Amount Stability fund of SEK15bn (0.5% of GDP) to handle future solvency problems at Swedish credit All credit institutions will have to institutions. contribute a specific fee into the Possible future capital injections stabilisation fund which will be risk- through issuance of preference differentiated. Sweden shares. Other forms of investment As with Swedish debt guarantee by the State could be considered. SEK15bn (0.5% of GDP) Aaa/AAA scheme (see below), participating The government will seek institutions will have to accept limits permission from Parliament to allow on the compensation of key compulsory share redemption - the executives right, in certain circumstances, to buy out other shareholders in systemically important institutions at market price. The government will subscribe to Switz. mandatory convertible notes of CHF6bn Aaa/AAA UBS, with a conversion price of (1% of GDP) CHF20 and coupons of 12.5% At least GBP50bn of government money available to assist in raising UK tier 1 capital of the main UK banks Up to GBP50bn Aaa/AAA before the end of the year. (3.6% of GDP) GBP37bn already committed to RBS, HBOS and Lloyds TSB. Warrants must be included for purchase of common stock equal to 15% of preferred investment Restriction on executive Under the “Emergency Economic compensation Stabilization Act 2008”, the Deadline for participation Nov 14, Treasury will purchase senior non- 2008 voting preferred share from US qualifying U.S. controlled banks, Minimum 1% of risk weighted Up to USD250bn Aaa/AAA savings associations, and certain assets (1.8% of GDP) bank and savings and loan holding Maximum USD25bn companies engaged only in 5% dividend for first five years, 9% financial activities that elect to after participate before 14/11/2008 Callable at par after 3 years, or can be redeemed before with proceeds from equity offering of T1 perpetual preferred or common stock Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 3 To the Rescue
  5. 5. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 3: New Debt Issuance Guarantees Scope Conditions Amount/Fees A clearing house for interbank debt Amount: up to EUR85bn and for issuing bank bonds will be Austria (31.4% of GDP) set up, run by the Austrian Kontrollbank Covers wholesale funding entered Applies to "systemic" Belgian banks. into or rolled over up to 31/10/2009 Amount: not specified Belgium Renewable for a further year with maturity not beyond Fee: TBC but firm specific 31/10/2011. (22/10) Government is in the Amount: EUR50bn (proposed) Guarantees for credit instruments process of requesting authority from Fee: TBC. Under current provisions, issued by banks or bank holding Parliament for the scheme. it is possible to levy an annual companies - bank deposit charge of 0.50% and a 0.25% flat Guarantees could only be granted certificates and bonds being issued fee on guarantees for long-term Finland to viable banks that meet all without any other financial collateral. loans. Short-term loan instruments solvency requirements, and would Expires 31/12/2009, with be subject to market rates. include a 0.25% charge computed assessment by 30/4/2009 whether on the basis of the debt maturity. Bank specific limitations. still needed. Max maturity 5 years. The legal provisions on these levies will now be amended. The Republic of France may directly Applies to debt issued not later than Amount: EUR320bn grant its guarantees to bonds issued France 31/12/2009 and with a maximum by French banks in case of maturity of five years emergency Amount: up to EUR400bn (16.5% of GDP) Fee: the law states that guarantees Maximum maturity of 36 months. will be charged at “an appropriate Guarantees on new senior bank Debt issued until 31/12/2009. Germany fee” while the regulation indicates a funding “market risk premium plus margin”. Reports on 17/10 suggested a 2% annual fee plus an individual risk premium. Guarantee on new loans or Amount: up to EUR15bn (6.6% of Greece refinance existing loans GDP) Irrevocable guarantee of interbank Amount: up to EUR500bn (260% of Participating banks subject to deposits, senior unsecured debt, GDP) taken together with deposit regulation of their commercial covered bonds and dated lower tier guarantee Ireland conduct, government representation 2 subordinated debt of participating on boards, and controls over Fee: TBC but firm specific and to institutions. Valid 2 years until executive compensation. depend on risk ratings 28/09/2010 Any instrument up to 5-yr maturity + Amount: unspecified Subject to BoI's evaluation. Debt Italy Bank of Italy's loans to Italian banks issued before 31/12/2009 or Italian units of foreign banks The government will provide Amount: EUR200bn (35.3% of guarantees on non-complex senior GDP) unsecured loans; ‘plain vanilla’ The scheme will include loans Fee: based on historical credit commercial paper, certificates of denominated in USD and GBP. Neth. default swap spreads plus 50bp. deposit, and medium term notes, Both principal and interest will be Maturities of less than a year will with maturities ranging from 3 to 36 covered. have a flat fee of 50bp. months. The scheme will run through to December 31, 2009 Amount: up to EUR20bn (12.3% of Guarantee scheme for financing of Applies to credit institutions with GDP) Portugal credit registered office in Portugal (22/10) Finance Minister announced Slovenia Expires 31/12/2009 Amount: EUR8bn bank guarantees Applies to debt issued after 15/10/2008 and until 31/12/2009 Amount: up to EUR100bn in 2008 Government guarantee on bank 2008 by credit entities resident in (9.5% of GDP). Unspecified for Spain financing including interbank Spain or subsidiaries of foreign 2009 deposits and term funding credit entities which perform a significant activity in Spain Maximum 5 year maturity Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 4 To the Rescue
  6. 6. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 3: New Debt Issuance Guarantees (cont) Covers Australian owned banks and locally incorporated subsidiaries of foreign banks, credit unions and building societies. The facility will be restricted to senior unsecured debt instruments. Certificates of deposit and bank bills Guarantee on debt securities issued will be covered Australia by Authorised Deposit-Taking Eligible ADIs must apply to the Fee: TBC Institutions (ADIs) Government for a guarantee and the guarantee will be extended on an issue by issue basis Covers new and existing issuances of debt securities up to 60 mths. Facility will be withdrawn once market conditions have normailised. Insurance for new issues of certain Amount: CAD218bn senior unsecured marketable Fee: 135bp plus 25bp for eligible wholesale debt instruments with a Voluntary, open to federally- institutions rated at or above A- or term to maturity of at least regulated deposit-taking institutions. equivalent. Further 25bp for other Canada 3 months, denominated in CAD, Program commences in early eligible financial institutions, and USD, EUR, GBP and JPY. Expires November. another surcharge for insurance on 30/4/2009, up to 3 year maturity. non-Canadian dollar denominated debt. Existing and new senior debt with a max maturity of 2yrs, issued up until See comment in Capital Injections See comment in Capital Injections Denmark 30 Sep 2010. Only creditors related Measures Measures to covered bonds and holders of subordinated debt are not covered. Amount: up to USD100bn (domestic Guarantee for Korean banks' new banks' external debt reaching external debt issued October 20 maturity by June 2009 estimated to S. Korea 2008 – June 30 2009, up to 3yr be around USD80bn) maturity Guarantee available to banks and Guarantee of banks’ and mortgage mortgage institutions based and institutions’ bonds, certificates of operating in Sweden with tier 1 deposits and other non- capital above 6% and combined tier Amount: up to SEK1.5trn (49% of subordinated debt instruments 1&2 above 9%. GDP) which have a maturity longer than Conditions include restrictions on Fee: determined by risk rating, and 90 days but less than five years. wage increases, bonus payments, set at a level between the current Sweden Scheme includes covered bonds. market price and an estimated price board remuneration and bank Limited to the refinancing of executives´ severance packages under normal market conditions. No institutions’ existing debt during the guarantee period. currency restrictions. instruments with maturities longer than 90 days. Covers issues up Applications made to Swedish Debt until 30/4/2009. Could be extended Office but no decisions until bill to 31/12/2009. approved – expected to be passed into law by 28/10. No concrete measures but "The Federal Council is prepared to guarantee new short and m/t Switz. interbank liabilities and money market transactions" if refinancing problems emerge. Amount: take up expected: Instruments up to 36 months GBP250bn (18% of GDP), being Government guarantee of new short UK maturity for eligible institutions kept under review. and medium term debt issuance during a 6-mth window Fee: 50bp + median CS over 12m to 7/10/2008 Includes promissory notes, CP, Amount: estimated to cover up to Newly issued senior unsecured interbank funding, and any US USD1.4tn. debt, up to 3yr maturity unsecured portion of secured debt. Fee: 75bp flat Debt issued up to 30/06/09 Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 5 To the Rescue
  7. 7. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 4: Other Measures Deposit Guarantee Schemes Asset Buying/Other Details Amount Unlimited deposit guarantee for private Austria customers Belgium Deposits up to EUR100k Cyprus All bank deposits up to EUR100k Deposit guarantee doubled to EUR50k Finland until end of 2009 Vehicle set up to finance banks up to 31/12/2009. The vehicle will forward credits to banks with a France max duration of five years. The Up to EUR320bn (16.9% of entity will be guaranteed by the GDP) government. It will finance itself on the market and pass on the funds to the banks 100% guarantee on all retail deposits in Germany German banks Increase in deposit guarantee for individual accounts from EUR20k to EUR100k. Valid for 3 years Issuance of government bonds, Up to EUR8.0bn Greece deposited with banks at 50-100bp A political commitment to guarantee all (3.5% of GDP) spread to improve liquidity. bank deposits, regardless of the amount, has also been made. Guarantee scheme for all retail and Up to EUR500bn (260% of Ireland GDP) taken together with debt corporate deposits. Valid for 2 years guarantee Facility to swap bank assets for Up to EUR40bn Italy All bank deposits up to EUR103k government debt (2.6% of GDP) Luxembourg Increased to EUR100k Bank deposit guarantee of up to Netherlands EUR100k Bank deposit guarantee increased from EUR25k to EUR100k. Applies to Portugal Portuguese nationals with deposits in Portuguese banks Unlimited guarantee on deposits (so far up to EUR22k) to all banks operating on Slovenia Slovenian territory. Temporary measure (until end of the crisis) Fund to be set up to buy Spanish top rated assets issued by credit entities and securitisation funds Up to EUR50bn resident in Spain and backed by (4.8% of GDP). An injection of Deposit guarantee increased to EUR100k credits granted to individuals, EUR10bn (which can be Spain from EUR20k companies and non-financial extended to EUR30bn) has entities. Instruments backed by already been approved for credits granted after 7/10/2008 2008 have priority when the fund selects investments Deposit guarantee for Australian owned banks, locally incorporated subsidiaries of foreign banks, credit unions and building The Australian Office of Financial societies (on 22/10 the government hinted Management has been directed to Australia it is considering a limit of AUD1mn). purchase another AUD4.0bn of AUD8.0bn (0.7% of GDP) Runs for 3 years. There is no cap. RMBS from non-ADI lenders. This is in addition to the AUD4.0bn Covers deposits made at offshore already announced branches of Australian-owned banks but not overseas banking subsidiaries. Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 6 To the Rescue
  8. 8. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 4: Other Measures (cont.) Deposit Guarantee Schemes Asset Buying/Other Details Amount Bulgaria Increase of deposit guarantee up to EUR50k The government will purchase Up to CAD100k of savings, checking and Canada National Housing Act MBS insured guaranteed investment certificates of 5yrs Up to CAD25bn (1.5% of GDP) mortgage pools at market prices or less via competitive auction. Czech Rep. Increase of deposit guarantee to EUR50k Denmark Unlimited deposit guarantee. From 5/10/2008 to 30/09/2010 Sought IMF help in restoring confidence. Offered to guarantee all interbank loans by OTP (largest independent bank in CEE), after OTP shares Increase of deposit guarantee from plunged on rumours the bank had Hungary HUF6mn to HUF13mn difficulties. OTP turned down the offer. Changed regulations to allow pension funds to invest all of their funds into government bonds, eased also repo collateral rules Increase of deposit guarantee from Lithuania EUR22k to EUR100k Until October 2009) Opt-in deposit guarantee scheme covering retail deposits up to NZD1mn per depositor per guaranteed institution. New Zealand Covers the size of deposits at 12/10/2008 with a growth allowance of 10% p.a. Expires 12/10/2010. Facility to swap covered bonds NOK350bn including mortgage backed (15.4% of GDP) Norway securities into new government bonds. Amount NOK350bn (15.4% of GDP) Poland EUR50k guarantee from EUR22.5k Increase in guarantee on bank deposits Romania from EUR20k to EUR50k Loan to VEB for takeover of Svyazbank. CBR instructed state- Russia owned banks to lend RUB60bn to smaller institutions. Deposits from CBR to smaller banks Unlimited guarantee of deposits of Slovak Rep. physical persons and some categories of legal persons No increase in deposit guarantees planned but “should the need arise to Central bank considering buying S. Korea pursue such measures, the government local bank debt.(22/10) will take proper actions”. Bank deposit guarantee on all types of accounts to be increased by SEK250k to SEK500k. Deposit guarantee fund has Sweden SEK 18bn. Guarantee deposits at foreign banks with clients in Sweden if their respective governments are unable to do so Federal Department of Finance working UBS will transfer CHF60bn of on a 'moderate' increase in deposit illiquid assets to an SNB fund Switzerland insurance where "the decisions taken by entity, capitalising it with CHF6bn the EU member states will serve as an of equity and selling that stake to important benchmark" the SNB for CHF1bn. Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 7 To the Rescue
  9. 9. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 4: Other Measures (cont.) Deposit Guarantee Schemes Asset Buying/Other Details Amount Special Liquidity Scheme facility GBP200bn Deposit guarantee increased from UK raised to make GBP200bn GBP35k to GBP50k (14.3% of GDP) available Under the “Troubled Assets Relief Programme” (TARP) the Treasury Deposit guarantee raised from USD100k will purchase bank asset from Bank asset purchase up to to USD250k until Dec 31 2009 eligible financial institutions. USD450bn Unlimited guarantee on non-interest Specifics still to be announced. (3.3% of GDP) US bearing deposit transaction accounts. On 22/10, the Fed announced a Expires end-2009, provided for new facility (MMIFF) to buy USD- Money market mutual fund institutions participating in debt denominated short-term paper purchases up to USD540bn guarantee. 10bp Fee. (remaining maturity of no longer (3.9% of GDP) than 90 days) from US mutual funds. Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold 8 To the Rescue
  10. 10. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008 Table 5: Potential “Risk Scenario” Increase In Supply Due To Government Bailouts* Total 2 = 2009 Funding Total 3 = 2009 Funding 2009 Needs Capital Debt Total 2 + 20% 2009 Deficit Needs +50% Redemptions (ex Tbills & Injections guarantees * Debt capital other sources) Guarantees EUR bn injection Austria 9 -5 15 15 23 85 40 Belgium 19 -4 22 13.9 29 29 Finland 7 6 5 4 7 50 17 France 112 -62 140 40 160 320 224 Germany 138 -15 158 80 198 400 278 Italy 163 -50 200 200 200 Ireland 5 -9 17 17 17 Netherlands 32 2 30 36.8 48 200 88 Portugal 6 -6 11 11 20 15 Spain 30 -24 50 50 100 70 Greece 26 -9 40 5 43 15 46 Slovenia 1 0 2 2 8 4 690 787 1,027 Source: BNP Paribas. * Note: Economic funding needs scenario for 2009 is shown in the third column. We make simple EMU-wide assumptions to get an idea of potential supply increases due to banking system bailouts. Firstly we assume 50% of proposed capital injections will be funded by long term issuance in 2009. These injections have been announced and are currently underway so taken together with the economic funding needs, they form our base case scenario. Second assumption is that 20% of proposed guarantees will be called upon and financed in 2009; as guarantees are contingent costs, the extra funding required form our “risk scenario”. 9 To the Rescue
  11. 11. RESEARCH DISCLAIMERS: IMPORTANT DISCLOSURES: Please see important disclosures in the text of this report. The information and opinions contained in this report have been obtained from, or are based on, public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate, complete or up to date and it should not be relied upon as such. This report does not constitute an offer or solicitation to buy or sell any securities or other investment. Information and opinions contained in the report are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient, are subject to change without notice and not intended to provide the sole basis of any evaluation of the instruments discussed herein. Any reference to past performance should not be taken as an indication of future performance. To the fullest extent permitted by law, no BNP Paribas group company accepts any liability whatsoever (including in negligence) for any direct or consequential loss arising from any use of or reliance on material contained in this report. All estimates and opinions included in this report are made as of the date of this report. Unless otherwise indicated in this report there is no intention to update this report. BNP Paribas SA and its affiliates (collectively “BNP Paribas”) may make a market in, or may, as principal or agent, buy or sell securities of any issuer or person mentioned in this report or derivatives thereon. BNP Paribas may have a financial interest in any issuer or person mentioned in this report, including a long or short position in their securities and/or options, futures or other derivative instruments based thereon, or vice versa. BNP Paribas, including its officers and employees may serve or have served as an officer, director or in an advisory capacity for any person mentioned in this report. BNP Paribas may, from time to time, solicit, perform or have performed investment banking, underwriting or other services (including acting as adviser, manager, underwriter or lender) within the last 12 months for any person referred to in this report. BNP Paribas may be a party to an agreement with any person relating to the production of this report. BNP Paribas, may to the extent permitted by law, have acted upon or used the information contained herein, or the research or analysis on which it was based, before its publication. BNP Paribas may receive or intend to seek compensation for investment banking services in the next three months from or in relation to any person mentioned in this report. Any person mentioned in this report may have been provided with sections of this report prior to its publication in order to verify its factual accuracy. BNP Paribas is incorporated in France with limited liability. Registered Office 16 Boulevard des Italiens, 75009 Paris. This report was produced by a BNP Paribas group company. This report is for the use of intended recipients and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without the prior written consent of BNP Paribas. By accepting this document you agree to be bound by the foregoing limitations. Certain countries within the European Economic Area: This report is solely prepared for professional clients. It is not intended for retail clients and should not be passed on to any such persons. This report has been approved for publication in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas, 10 Harewood Avenue, London NW1 6AA, which is regulated by the Financial Services Authority for the conduct of its investment business in the United Kingdom and registered in England & Wales under No. FC13447. This report has been approved for publication in France by BNP Paribas, a credit institution licensed as an investment services provider by the CECEI and the AMF, whose head office is 16, Boulevard des Italiens 75009 Paris, France. This report is being distributed in Germany either by BNP Paribas London Branch or by BNP Paribas Niederlassung Frankfurt am Main, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). United States: This report is being distributed to US persons by BNP Paribas Securities Corp., or by a subsidiary or affiliate of BNP Paribas that is not registered as a US broker-dealer to US major institutional investors only. BNP Paribas Securities Corp., a subsidiary of BNP Paribas, is a broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers, the New York Stock Exchange and other principal exchanges. BNP Paribas Securities Corp. accepts responsibility for the content of a report prepared by another non-US affiliate only when distributed to US persons by BNP Paribas Securities Corp. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch, or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited, Tokyo Branch, a subsidiary of BNP Paribas, is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association. BNP Paribas Securities (Japan) Limited, Tokyo Branch accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch. Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan. Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Hong Kong Branch is regulated as a Registered Institution by Hong Kong Monetary Authority for the conduct of Advising on Securities [Regulated Activity Type 4] under the Securities and Futures Ordinance. © BNP Paribas (2008). All rights reserved.