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<p>MayerBrownLLPpresentsRecentTrendsinBrazilianandMexicanDebtRestructuring</p> <p>March4,2009</p> <p>RecentTrendsinBrazilianandMexicanDebtRestructuringTableofContentsMarch4,2009</p> <p>Tab </p> <p> Agenda 1</p> <p>SpeakerBiographies 2</p> <p>LatinAmericanRestructuringsParticipants,CharacteristicsofRestructurings&amp;Recoveries</p> <p>3</p> <p>DebtRestructuringinBrazilWhatisdifferentthistime? 4</p> <p>MexicanInsolvenciesandRestructuringsLessonsLearned 5</p> <p>Chapter15oftheUnitedStatesBankruptcyCode:AncillaryandOtherCrossBorderProceedings</p> <p>6</p> <p>LatinAmericanRestructuringDerivativeIssues 7</p> <p>TAB 1 </p> <p>RecentTrendsinBrazilianandMexicanDebtRestructuring</p> <p>AgendaMarch4,2009</p> <p>Time Topic Presenters</p> <p>3:00p.m. Introduction DougDoetschMayerBrown</p> <p>PeterDarrowMayerBrown</p> <p>3:10p.m. LatinAmericanRestructuringParticipantsandCharacteristics</p> <p>GabrielBreslerFTIConsulting</p> <p>3:35p.m. DebtRestructuringinBrazilWhatisdifferentthistime?</p> <p>RonHerscoviciSouza,CesconAvedissian,BarrieueFlesch</p> <p>JimPattiMayerBrown</p> <p>4:10p.m. MexicanInsolvenciesandRestructuringsLessonsLearned</p> <p>MichellNaderJauregui,Navarrete&amp;Nader</p> <p>DavidDuffeeMayerBrown</p> <p>4:45p.m. Break </p> <p>5:00p.m. Chapter15oftheUnitedStatesBankruptcyCode:AncillaryandOtherCrossBorderProceedings</p> <p>RobertStollMayerBrown</p> <p>5:15p.m. LatinAmericanRestructuringDerivativeIssues</p> <p>JamilaPiracciMayerBrown</p> <p>5:30p.m. PredictionsonRecoveriesintheCurrentRoundofRestructurings</p> <p>GabrielBreslerFTIConsulting</p> <p>RonHerscoviciSouza,CesconAvedissian,BarrieueFlesch</p> <p>MichellNaderJauregui,Navarrete&amp;Nader</p> <p>6:00p.m. Reception </p> <p>TAB 2 </p> <p> GabrielBreslerFTIConsulting,SeniorManagingDirector</p> <p>Email:gabe.bresler@fticonsulting.com Phone:+16178971500</p> <p>GabrielBreslerisaseniormanagingdirectorinFTIsCorporateFinancepracticeandisbasedin Boston. Gabriel specializes in providing strategic and financial planning, processimprovement, merger integration planning and effectuation, cost allocation studies,troubledcompanyevaluationandrestructurings,interimmanagementservices,mergersandacquisitions,businessvaluations,anddisputeadvisoryassistance.Withmorethan20yearsexperience, Mr. Bresler has provided advice to a widerange of clients in thetelecommunicationsandmedia,energy,distribution,andmanufacturingindustries.</p> <p>Gabrielscompanyadvisoryworkhasincludedleadingthedevelopmentandimplementationofoperationalplans,process improvement, financialmanagementplanning,productroadmappingandcustomersegmentation.Hehasservedasfinancialadvisortovariouspartiesintransactions, including due diligence on behalf of financing sources, identification ofacquisitiontargets,analysisoffinancialandoperationalsynergiesinpotentialmergers,andpreparation and negotiation of bids and acquisition agreements for both distressed andhealthyinvestments.</p> <p>Gabriel has led and managed a broad array of cases for clients in formal bankruptcyproceedingsandoutofcourtrestructurings(bothcreditorsanddebtors),leadingtheeffortsof company and creditor groups in the development of valuemaximization strategies.Relatedserviceshave includeddevelopmentandreviewofbusinessplans,managementofoperations and network closures, valuations, competitive benchmarking, distressed assetandbusinessmarketing and sales, renegotiationof credit facilities,anddevelopment andimplementationofcashmanagementprograms.</p> <p>PeterV.DarrowMayerBrown,NewYorkPartnerEmail:pdarrow@mayerbrown.com Phone:+12125062560PeterDarrow isapartner intheNewYorkOfficeofMayerBrownLLP.Peter iscoheadofthefirmsLatinAmericanandCaribbeanpractice,andspecializesinrepresentingissuersandunderwriters in securitiesofferingsby companies in the region in the international capitalmarkets,andinadvisingcompaniesandfinancialinstitutionsintheregioninconnectionwithliabilitymanagementtransactionsanddebtrestructuring.Peterhasrepresentedborrowers,lenderscreditorcommitteesandfinancialadvisorsinnumerousdebtrestructurings inLatinAmericaandtheCaribbean.</p> <p>PetergraduatedfromColumbiaCollegein1972,andreceivedaB.PhilfromTrinityCollege,Oxford,in1974.HegraduatedfromMichiganLawSchoolin1978,wherehewasamemberoftheLawReview.</p> <p>DouglasA.DoetschMayerBrown,ChicagoPartnerEmail:ddoetsch@mayerbrown.com Phone:+13127017973DouglasDoetschservesascoheadofthefirmsLatinAmericanandCaribbeanpracticeandleadstheChicagoofficesbankingandfinancepractice.Headvisesclientsonacquisitionandotherleveragedlendingtransactions,structuredcredittransactions,andprojectfinancings,particularlyinLatinAmericaandotheremergingmarkets.Heisalsoaleaderincrossbordersecuritizationtransactions,especiallyfuturecashflowsecuritizations.Inhiscrossborderwork,Dougregularlyadvisesonemergingmarketdebtrestructuringanddebt exchange offers. In addition, his transactional work involves asset and stockacquisitions, real estate investments, and crossborder joint ventures.Doug also advisesemerging market companies on Eurosecurities offerings and US equity offerings.Doughasearnedwiderecognitionforhisworkinemergingmarketssincejoiningthefirmin1988.AccordingtoChambersLatinAmerica2009,hehasanunparalleledabilitytoquicklyclosecomplextransactionsandmake itseem likeawalk inthepark. ChambersUSA2007calls him a simply great attorneywhowins praise for his emergingmarkets expertise.TherecanbefewlawyerswhohavethedepthofexperiencethathecanboastinSouthandCentralAmerica.In1986,Doug receivedhisJD fromColumbiaUniversityLawSchool.DougalsograduatedfromKalamazooCollegewherehereceivedhisBA,magnacumlaude,in1979.</p> <p>DavidK.DuffeeMayerBrown,NewYorkPartnerEmail:dduffee@mayerbrown.com Phone:+12125062630David Duffee advises financial institutions on US and crossborder financings, with aparticular focus on secured transactions and acquisitions.His financework also includesinternationalprojectfinanceandsovereignandprivatesectordebtrestructuring, includingdebtorinpossessionfinancingsandworkouts.Major clients in Davids practice are investment banks, commercial banks, hedge funds,finance companies, insurance companies and governmental entities.David also providestransactionalcounseltocorporateborrowersandtofinancialadvisors.David attended ColumbiaUniversity School of Law and received his JD in 1984.He alsoattendedSt.OlafCollegeforhisBA,magnacumlaude,in1981.</p> <p> RonaldHerscoviciSouza,CesconAvedissian,BarrieueFlesch,Partner</p> <p>SoPauloEmail:ronald@scbf.com.br Phone:+551130896506Ronald Herscovici is involved in the following practice areas: Capital Markets andSecuritization,ProjectFinanceandBankingandStructuredFinance.Mr.HerscovicireceivedhisLLBattheUniversityofSoPauloLawSchool(USP)in1994andhisLLMattheCornellUniversityLawSchoolin1996.</p> <p> MichellNaderJauregui,Navarrete&amp;Nader,PartnerEmail:mnader@jnn.com.mx Phone:+525552674507Mr. Naders practice focuses on Banking, Finance, Debt and Equity Restructurings,InsolvencyandMergers&amp;Acquisitions. Mr.Naderhasworked inanumberof the largestrestructuringsand insolvencies inMexicogenerally representingcreditorsandoccasionallyhasrepresenteddebtorsincomplexcases.HehasalsoparticipatedinMexicaninsolvencieswithUS insolvencyandbankruptcy ramifications. He iscurrentlyworking in fourMexicancasesinvolvingderivativesandinotherworkoutsrepresentingbondholdersandlenders.</p> <p>Mr.Naderistheauthororcoauthorofvariousarticlesandchaptersofspecializedbooksandmagazines, including the Mexican Banking Impasse Resolved at Last, published byEuromoney Publications PLC; Ins and Outs ofMergers and Acquisitions inMexico; TheFutureofMexicanFinancialServicesIncludingMoneyLaunderingRegulations,publishedbyTheU.S.MexicoLawInstitute;DebtRestructuringinMexico,publishedbyMayerBrown.</p> <p>In1979,Mr.NaderreceivedhislawdegreefromtheUniversidadIberoamericanainMexico,summacumlaude,andin1980,heobtainedaMasterofComparativeLawfromGeorgetownUniversity.</p> <p>JamesP.PattiMayerBrown,ChicagoPartnerEmail:jpatti@mayerbrown.com Phone:+13127018476JamesPattirepresentsclientsinvolvedwithcomplex,cuttingedgefinancingtransactionsinemerging markets that range from Brazil and Peru to Russia, Turkey, Kazakhstan andNigeria.Hisworkemphasizesstructuredfinance,includingcrossbordersecuritizationsandstructured loans,witha strong focuson futurecash flowandexportrelated securitizationtransactions.Healsoassistsglobalclientswithproject/infrastructure financeandgenerallending (secured and unsecured) transactions, as well as with unregistered securitiesofferings,debtrestructuringsandacquisitionsfinancings.Approximately half of the emergingmarket transactions that Jim handles focus on LatinAmerica.He isproficient inSpanish,andChambersGlobal2006notes thathe "handlesalarge proportion of Latin American work." According to Chambers USA 2008, "clientsemphasized his 'internationalwork, and particularly his emergingmarkets experience' as'highly beneficial assets in any deal.'"Most recently in Chambers LatinAmerica 2009, heearns plaudits for highly detailed approach and technical expertise. In addition to hispresence in theUS, Jim spends timeworking from the firmsLondonoffice.Hispracticetherefacilitateshisabilitytoassistemergingmarketclients inCentralandEasternEurope,TurkeyandAfrica.James receivedhis JD from theUniversityofChicago in1994. Jamesalsograduated fromGeorgetownUniversity,wherehereceivedhisBS,magnacumlaude,in1989.</p> <p>JamilaA.PiracciMayerBrown,ChicagoAssociateEmail:jpiracci@mayerbrown.com Phone:+13127018609</p> <p>JamilaPiraccipracticesinthederivativesarea.Shehasrepresentedbanks,investmentfundsandcorporationsinavarietyofderivativestransactions,withcoveragethatincludescredit,equity,commodity,currencyandinterestrateproducts.</p> <p>In theareaof structured finance, Jamilahashandledcreditderivativesdocumentation forsyntheticCDOs andCLOs and interest rate swap documentation for securitizations.Shealsoprovides clientswith technicalanalysisandguidancewith respect todocumentation,regulatoryandmarketdevelopmentsforarangeofderivativesproductsandhassignificantexperiencedevelopingderivativestemplates.</p> <p>JamilaattendedCornellUniversityLawSchool,whereshe receivedher JD in2000. JamilaalsoreceivedherMBAfromCornellUniversity,JohnsonSchoolofManagement in1999. In1995,JamilareceivedherABfromHarvardUniversity,cumlaude.</p> <p>J.RobertStollMayerBrown,NewYork/ChicagoPartnerEmail:robertstoll@mayerbrown.com Phone:+13127018609</p> <p>RobertStoll focuseshis respected lawpracticeon threeprimaryareas, includingcreditorsrights,workoutsandbankruptcies.He represents large institutional creditors inChapter 7andChapter11casesandsupervisesanddirectsloanworkoutsandbankruptcies.</p> <p>NotableamongcasesthatRoberthasrecentlyhandled, individuallyorasagentfor lendingbankgroups,arecomplexChapter11bankruptcycasesinvolvinglendinginstitutionssuchasBankofMontreal,TorontoDominionBank,CanadianImperialBankofCommerce,andBankOne,NA.Inaddition,heactedasleadcounselforlendergroupsintherecentworkoutand/orChapter 11 cases of Tokheim (ABN AMRO), Loewen Group International, Inc., AdelphiaCommunicationsCorp.,TeleglobeCommunications, Inc. (BankofMontreal);TSRWirelessLLC (BankOne);KCSEnergy,EnronCorporation (Canadian ImperialBankofCommerce);andBenedekBroadcasting,Globenetand360Americas, InternationalWireless,Kenetech,MetrocallandAHERF(TorontoDominionBank).</p> <p>BobearnedhisJDfromColumbiaUniversityLawSchoolin1975andreceivedhisBA,magnacumlaude,in1972fromHaverfordCollege.</p> <p>TAB 3 </p> <p>1</p> <p>Previous Cycle of Latin American RestructuringsParticipants, Characteristics of Restructurings &amp; Recoveries</p> <p>Participants</p> <p> Initially dominated by Financial Institutions but over time opportunity players (e.g., hedge funds) tended to drive the deals to closing</p> <p> Bondholders had a role in certain situations but not to the same extent as the current round of restructurings</p> <p>Restructuring Forum</p> <p> Little use of court processes in Brazil and Mexico; use of APEs in Argentina</p> <p>Deal Length</p> <p> 12+ months</p> <p>Typical Deal Structure</p> <p> 7 year deal, 2 years principal grace amortizing loan</p> <p> Minor equity participation - Original controlling shareholder group maintained voting and economic control. Sometimes sale of the assets to third parties (e.g., Media and Telecom)</p> <p>Recoveries</p> <p> While a par recovery would be an overstatement, there are many instances of a full recovery commodity based companies, Globopar etc. </p> <p>2</p> <p>Current Latin American Restructuring LandscapeParticipants, Characteristics of Restructurings &amp; Recoveries</p> <p>Participants</p> <p> Massive devaluation has resulted in numerous toxic derivatives resulting in otherwise solvent companies with an inability to fund the margin calls (Aracruz, Comercial Mexicana, Sadia, Gruma, Vitro, etc.). This has resulted in derivative counterparties being at the table in the current round of restructurings</p> <p> However, as todays economic realities are reflected in the results of Latin American companies, the big players are going to be bondholders given the rash of significant bond placements in 2006 / 2007 / early 2008</p> <p> The opportunity players are sitting on the sidelines as they are protecting their own liquidity and many believe that the economy will only get worse (why buy now when you buy it cheaper in 6 months or when the uncertainty in the market place is reduced?)</p> <p> How financial institutions play in this round of restructurings is uncertain. Do you sell out or take cash and get rid of a problem (when the market is already penalizing your market cap) or do you restructure with the hope of creating long term value?</p> <p>Restructuring Forum</p> <p> Given the size of the bondholder positions, we expect that the court processes in Brazil and Mexico will be heavily used in this round of restructurings, if for nothing else to implement restructurings on bondholders. </p> <p>3</p> <p>Current Latin American Restructuring LandscapeParticipants, Characteristics of Restructurings &amp; Recoveries</p> <p>Wild Cards</p> <p>Shareholders Risk Appetite</p> <p> Latin American shareholders have historically taken the position what goes down will always eventually go back up</p> <p> This resulted in restructurings that bought time and, in many instances, were viewed as setting up the creditors for round 2</p> <p> However, in todays environment for many industries, it is very difficult to predict how long the current downturn will last this results in unprecedented uncertainty </p> <p> Will the economy correct itself in 2 years or 5 years?</p> <p> Shareholders are then going to have the difficult task of concluding on a sustainable debt that they are willing to bet the company on</p> <p>Government Bailouts</p> <p> Latin American Governments have been quick to provide short-term financing to shore up liquidity. However, what happens when the bailout itself needs to be restructured in order for a reasonable answer to occur is there a new influential player at the table?</p> <p> Shorter term, highly collateralized debt may complicate the restructuring</p> <p>TAB 4 </p> <p>Debt Restructuring in Brazil</p> <p>What is different this time?</p> <p>Ronald Herscovici</p> <p>Rua Funchal 418 - 11 andar04551 060 So Paulo SP BrazilTel (55 11) 3089.6506Fax (55 11) 3089.6565ronald@scbf.com.br</p> <p>Last Round </p> <p>(2001-2003)</p> <p>Current Round </p> <p>Debtors Capital Structure</p> <p>Concentrated control Publicly-traded companies and higher corporate gove...</p>

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