KIRKLAND & ELLIS LLP

Kirkland & Ellis LLPU.S. Capital Markets Comparison

Christian O. Nagler

July 26, 2011

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KIRKLAND & ELLIS LLP

History of U.S. Markets

Bonds States used bonds to finance the Revolutionary War First U.S. government issuance was to refund state debts (1790) Corporate bonds financed much of the industrial boom WWI Liberty Bonds marketed to individuals

Equities NYSE / 1792 Continent wide economy with low internal trade barriers

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Regulation of Securities Generally, a disclosure regulated regime

Offering document quite well-established

Registered/unregistered securities (equities typically registered)

State regulation dates back to 1911 – “blue sky laws”

Federal regulation dates back to 1933 (Securities Act); 1934 (Exchange Act); 1940 (Trust Indenture Act)

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Current Market 154 U.S. IPOs completed in 2010/69 U.S. IPOs completed in 2009* About $822 billion average daily bond trading volume** Low interest rates for new issuances (IBM – 5 yr bond – 2.07% YTM) Almost all bond trading is between broker-dealers on the over-the-

counter market Today’s buyers include: mutual funds; institutional funds; hedge

funds; insurance companies; and structured funds

* PwC US IPO Watch

** Source: SIFMA

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Contributors to Active Capital Markets Established history/case law

Strong secondary markets – there’s almost always a buyer

Bankruptcy Reorganization Laws

Established Disclosure Regime

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KIRKLAND & ELLIS LLP

ChicagoKirkland & Ellis LLP300 North LaSalleChicago, IL 60654+1 (312) 862-2000

+1 (312) 862-2200 fax

LondonKirkland & Ellis International LLP

30 St Mary AxeLondon EC3A 8AF+44 20 7469 2000

+44 20 7469 2001 fax

Los AngelesKirkland & Ellis LLP

333 South Hope StreetLos Angeles, CA 90071

+1 (213) 680-8400+1 (213) 680-8500 fax

San FranciscoKirkland & Ellis LLP555 California Street

San Francisco, CA 94104+1 (415) 439-1400

+1 (415) 439-1500 fax

Palo AltoKirkland & Ellis LLP950 Page Mill RoadPalo Alto, CA 94304+1 (650) 859-7000

+1 (650) 859-7500 fax

Mailing Address:P.O. Box 51827

Palo Alto, CA 94303

MunichKirkland & Ellis International LLP

Maximilianstrasse 1180539 Munich

+49 89 2030 6000+49 89 2030 6100 fax

Washington, D.C.Kirkland & Ellis LLP

655 Fifteenth Street, N.W.Washington, D.C. 20005-5793

+1 (202) 879-5000+1 (202) 879-5200 fax

Hong KongKirkland & Ellis International LLP

26th Floor, Gloucester TowerThe Landmark

15 Queen's Road CentralHong Kong

+852 3761 3300+852 3761 3301 fax

New YorkKirkland & Ellis LLP

601 Lexington AvenueNew York, NY 10022

+1 (212) 446-4800+1 (212) 446-4900 fax

ShanghaiKirkland & Ellis International LLP

11th Floor, HSBC BuildingShanghai IFC

8 Century AvenuePudong New District

Shanghai 200120P.R. China

+8621 3857 6300+8621 3857 6301 fax

CHICAGO

NEW YORK

WASHINGTON, D.C.

SAN FRANCISCO

LOS ANGELES

LONDONMUNICH

HONG KONG

PALO ALTO

SHANGHAI

Office Contact Information

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