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BNP Paribas Interim / Quarterly Report 2009
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Interim / Quarterly Report
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BNP Paribas Capital Trust VI
Financial Statements As of June 30, 2009 (Unaudited)
BNP Paribas Capital Trust VI
June 30, 2009 (Unaudited)
2
Financial Statements
Statement of Financial Condition 3
Statement of Operations. 4
Statement of Changes in Stockholder's Equity 5
Statement of Cash Flows 6
Notes to Financial Statements 7
Certification of Director and Treasurer 14
BNP Paribas Capital Trust VI
Statement of Financial Condition
As of June 30, 2009 (Unaudited)
Assets
Cash and due from banks € 0
Investment in Preferred Securities held to maturity 714,835,000
Accrued interest receivable 18,681,168
Total assets € 733,516,168
Liabilities and shareholder's equity
Shareholder's equity
Common stocks, stated value 1 per stock; 1,000 stocks
authorized, issued and outstanding € 14,835,000
Preferred stocks 700,000,000
Retained Earnings 18,681,168
Total shareholder's equity 733,516,168
Total liabilities and shareholder's equity € 733,516,168
BNP Paribas Capital Trust VI
Statement of Income
For the period ended June 30, 2009 (Unaudited)
Revenues
Dividends received
€ 20,369,226
Total Revenues
€ 20,369,226
Expenses
Interest Expense
Total Expenses
Net Income
€ 20,369,226
BNP Paribas Capital Trust VI
Statement of Changes in Shareholder's Equity
For the period ended June 30, 2009 (Unaudited)
| Common Stock | Retained Earnings | Total Stockholder's Equity | |
|---|---|---|---|
| Balance, January 1, 2009 | € 714,835,000 | € 0 | € 714,835,000 |
| Net income | - | 20,369,226 | 20,369,226 |
| Prepaid dividends | - | (1,688,058) | (1,688,058) |
| Balance, June 30, 2009 | € 714,835,000 | € 18,681,168 | € 733,516,168 |
BNP Paribas Capital Trust VI
Statement of Cash Flows
As of June 30, 2009 (Unaudited)
Cash flows from operating activities:
Dividends received from preferred stocks € 20,369,226
Net cash provided by operating activities 20,369,226
Cash flows from investing activities:
Net cash provided by investing activities -
Net cash provided by investing activities -
Cash flows from financing activities:
Dividends prepaid (20,369,226)
Net cash provided by financing activities (20,369,226)
NET INCREASE/(DECREASE) IN CASH AND DUE FROM BANKS
CASH - December 31, 2008
CASH - June 30, 2009 € 0
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
1. Organization
General
BNP Paribas Capital Trust LLC VI (the "Trust") is a limited liability company formed on January 2, 2003 as a Delaware statutory business trust.
The Trust was formed by BNP Paribas (the "Bank"), a bank incorporated with limited liability under the laws of the Republic of France, acting through its New York Branch (the "Branch"). Together with all its consolidated subsidiaries, including its branches, the Bank is engaged in a wide range of banking, financial and related activities, in France and abroad.
The limited liability company agreement was amended and restated in its entirety on January 16, 2003 (as so amended and restated, the "LLC Agreement") to reflect among other things, the issuance by the Trust of two classes of limited liability company interests: its Trust Common Stocks and its Trust Preferred Stocks (the "Stocks"). The Trust Common Stocks rank junior to the Trust Preferred Stocks as to the payment of dividends.
Concurrent with the formation of the Trust, the Bank has created BNP Paribas Capital Preferred LLC (the "Company") which is a limited liability company formed on January 2, 2003 under the Delaware Limited Liability Company Act.
The Trust exists for the purposes of (i) issuing the Stocks; (ii) acquiring and holding the preferred securities issued by the Company; and (iii) performing functions necessary or incidental thereto.
The Bank, acting through the Branch, holds 100% of the Trust Common Stocks, which have an initial liquidation preference of €14,835,000, an amount equivalent to the bank's initial capital contribution. The Trust Common Stocks are the only Stocks that have voting rights, except if expressly required by applicable law. As a result, the Trust is a wholly owned subsidiary of the Bank.
The Trust has offered 700,000 Trust Preferred Stocks to qualified institutional buyers in accordance with rule 144A under the Securities Act. The 700,000 Trust Preferred Stocks have an aggregate liquidation preference of €700,000,000, and a liquidation preference of €1,000 per Trust Preferred Stock. The Trust has invested the proceeds of the Trust Preferred Stocks in the Company Preferred Securities.
Investments
Under the LLC Agreement, the Trust may not hold or invest in any securities other than the Company Preferred Securities or other subordinated debt instruments that are issued by the Company. The Trust has applied the proceeds from the issuance of the Trust Preferred Stocks to acquire the Company Preferred Securities. The Trust is prohibited by the LLC Agreement from selling the Company Preferred Securities and incurring any indebtedness for borrowed money. The Company Preferred Securities are undated, unsecured and subordinated obligations of the Bank, acting through the Company, and will rank pari passu with any other unsecured subordinated obligations of the Bank with the exception of any prêts participatifs granted to the Bank or any titres participatifs issued by the Bank, which rank junior to the Company Preferred Securities.
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
Interest on the Company Preferred Securities will be payable on a non-cumulative basis (i) from the Issue Date to and including January 16, 2003, annually in arrears on January 16 of each year, commencing on January 16, 2004, at a fixed rate per annum on the principal amount outstanding equal to 5.868% (calculated on an Actual/Actual Basis) and (ii) thereafter, quarterly in arrears on each January 16, April 16, July 16 and October 16 of each year (or if any such date is not a Business Day, the next Business Day), commencing on April 16, 2013 at a variable rate per annum on the liquidation preference equal to 2.48% above three-month EURIBOR (calculated on an Actual/360 Basis).
The Company Preferred Securities will be redeemable at the option of the Company (i) on the Interest Payment Date on January 16, 2003 or any Interest Payment Date thereafter, in whole or in part, at a redemption price equal to 100% of their principal amount plus interest accrued but unpaid to the date fixed for redemption, and (ii) prior to the Interest Payment Date on January 16, 2003, in whole but not in part, if (a) a Tax Event, an Investment Company Act Event or a Capital Disqualification Event occurs or (b) in the event the Company's United States interest expense deduction attributable to the Company's investment proceeds of the Company Preferred Securities or Replacement Notes will be reduced or is not currently usable, in each case at a redemption price equal to the higher of (x) the redemption price that would otherwise apply as calculated pursuant to clause (i) above, and (y) a "Company Preferred Securities Make Whole Amount" (calculated in substantially the same manner as the Make Whole Amount with respect to the Trust Preferred Stocks).
Trust Preferred Stocks
Dividends on the Trust Preferred Stocks will be payable when declared by the Board of Directors of the Trust, on a non-cumulative basis (i) from the Issue Date to and including January 16, 2003, annually in arrears on January 16 of each year, commencing on January 16, 2004, at a fixed rate per annum on the principal amount outstanding equal to 5.868% (calculated on an Actual/Actual Basis) and (ii) thereafter, quarterly in arrears on each January 16, April 16, July 16 and October 16 of each year (or if any such date is not a Business Day, the next Business Day), commencing on April 16, 2013 at a variable rate per annum on the liquidation preference equal to 2.48% above three-month EURIBOR (calculated on an Actual/360 Basis).
Redemption – Liquidation distribution upon dissolution
The Trust Preferred Stocks are not redeemable at the option of the holders at any time and are not redeemable at the option of the Trust prior to the Dividend Payment Date scheduled to occur on January 16, 2003, except in whole upon the occurrence of a Tax Event, an Investment Company Act Event or a Capital Disqualification Event.
Any redemption of the Trust Preferred Stocks is subject to the Trust having given not less than 30 or more than 60 days' notice of its intent to redeem the Trust Preferred Stocks to the Stockholders.
In the event of any voluntary or involuntary liquidation of the Trust that is not concurrent with the liquidation of the Bank, after all debts and liabilities of the Trust have been satisfied, if any, the holders of the Trust Preferred Stocks will be entitled to receive out of assets of the Trust available for distribution in liquidation, before any liquidation distribution is made on the Trust Common Stocks, liquidation distributions equal to the Liquidation Claim Amount as defined in the LLC Agreement.
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
As defined in the LLC Agreement, there are other specific events that could result in the liquidation of the Trust.
Support Agreement
The Bank and the Trust entered into a Support Agreement on January 16, 2003, under which the Bank will agree to contribute (or cause to be contributed) to the Trust any necessary additional funds (after payment of all Trust expenses and taxes) to enable the Trust (i) to pay any dividends on the Trust Preferred Stocks that are due and payable on any Mandatory Dividend Payment Date and (ii) to pay the redemption price on the Trust Preferred Stocks on any duly notified redemption date.
2. Summary of Significant Accounting Policies
Basis of presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
The policies, which are followed by the Company to determine its financial position, results of operations and cash flows, are summarized below.
Investments
The Trust's sole investment is in the Company Preferred Securities issued by the Company. Dividends on the Company Preferred Securities will accrue from the Issue Date, January 16, 2003, annually in arrears on January 16 of each year, commencing on January 16, 2004, at a fixed rate per annum on the principal amount outstanding equal to 5.868% (calculated on an Actual/Actual Basis) and (ii) thereafter, quarterly in arrears on each January 16, April 16, July 16 and October 16 of each year (or if any such date is not a Business Day, the next Business Day), commencing on April 16, 2013 at a variable rate per annum on the liquidation preference equal to 2.48% above three-month EURIBOR (calculated on an Actual/360 Basis).
The Trust invested €700,000,000 in principal on January 16, 2003, and has not recorded any accrued interest up to June 30, 2009 as the last dividend payment date was December 31.
These securities are classified as held-to-maturity securities and are carried at amortized cost. The Trust has the positive intent and ability to hold these securities to maturity.
Cash and due from the banks
For the purpose of reporting cash flows, cash and due from banks includes cash maintained in financial institutions.
Stocks issued by the Trust
The Trust Preferred Stocks are classified as shareholder's equity as they have the characteristics of equity instruments rather than debt instruments.
The Trust Common Stocks represent the ownership rights in the Trust and are also classified as shareholder's equity.
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
Income taxes
Assuming full compliance with the terms of the LLC Agreement, the Trust will not be taxable as a corporation and will not itself be subject to United States federal income tax. The Bank intends to treat the Trust as a partnership for United States federal income tax purposes.
Accordingly, the Trust has made no provision for income taxes in the accompanying statement of operations.
Fair Value Measurement – Definition and Hierarchy
The Trust adopted the provisions of SFAS 157 effective January 1, 2008. See Note 6 herein for additional information regarding the Trust’s adoption of SFAS 157. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
SFAS 157 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Trust. Unobservable inputs are inputs that reflect the Trust’s assumptions about the parameters that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
In October 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. 157-3 (“FSP 157-3”) “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active”. This FSP clarified the application of SFAS 157 in a market that is not active and provided an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active.
In February 2008, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of SFAS Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS 159 was effective for financial statements issued for fiscal years beginning after November 15, 2007. Early adoption was permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided that the Trust also elects to apply the provisions of SFAS 157. The Trust adopted SFAS 159 effective January 1, 2008. The adoption of
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
SFAS 159 did not have a material impact on the Trust’s financial statements, as the Trust did not elect to apply fair value method of accounting to any of its assets or liabilities during 2008.
3. Investment
The Trust invested €700,000,000 in principal in Company Preferred Securities on January 16, 2003. The Trust has not recorded any accrued interest up to June 30, 2009 as the last dividend payment date was December 31.
4. Dividends
The Trust has prepaid €1,688,058 for dividends incurred during the period ended June 30, 2009. The Trust has received €20,369,226 for dividends earned on its securities during the period ended June 30, 2009.
5. Supplemental Disclosure of Cash Flow Information
The Company has not paid any cash for interest or income taxes in the six-months ended June 30, 2009. The Company has not received any interest on its securities in the six-months ended June 30, 2009.
6. Fair Value Disclosures
Fair Value Measurements
Due to the nature of its operations, substantially all of the Trust’s assets are comprised of cash, due from banks and held to maturity investments. Cash due from banks is short-term in nature and the carrying amounts are a reasonable estimate of fair value. The Fair Value Measurement disclosure also doesn’t apply to the held to maturity investments. As a matter of fact, although BNP Paribas Capital Trust VI has adopted the SFAS 157 effective January 1, 2008, it does not have a material impact on the Trust financial statements.
Financial Instruments not Measured at Fair Value
Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments" ("SFAS No. 107"), requires the disclosure of the estimated fair values of financial instruments and certain other information. The estimated fair values of financial instruments can vary from period to period based on changes in a wide range of factors, including interest rates and the duration of financial instruments.
The estimated fair value of the held-to-maturity investments approximates its recorded carrying value at December 31, 2008, taking into account the creditworthiness of the asset sellers, the loss experience of the pooled receivables, other credit enhancements, and variability in interest rates as they are all short-term in nature or reset frequently. The carrying amounts of cash, receivables, commercial paper and payables approximate their fair value due to the relatively short-term nature of the instruments.
BNP Paribas Capital Trust VI LLC Notes to Financial Statements
7. Related-Party Transactions
The Trust has invested the proceeds from the issuance of its Trust Preferred Stocks in eligible investments, issued by the Company, a related party. Terms and conditions on those investments may not necessarily be similar to those of alternative investment securities issued by unaffiliated entities.
On January 16, 2003, the Trust has entered into a support agreement with the Branch (the "Support Agreement"). Under the Support Agreement, the Branch is obligated, among other things, to provide legal, accounting, tax and other general support services, to maintain compliance with all pertinent U.S. and French local, state and federal laws, and to provide necessary administrative, record-keeping and secretarial services for the Trust. As holder of the Trust Common Stocks, the Branch will pay all the fees and expenses of the Trust. The Administration Agreement may not be terminated so long as any of the Trust Preferred Stocks remain outstanding. Therefore, the Trust's financial condition and results of operations may not necessarily be indicative of those which would have resulted if the Trust had been operated as an unaffiliated company.
8. Recent Accounting Developments
In February 2008, the FASB issued FSP SFAS No. 140-3, "Accounting for Transfers of Financial Assets and Repurchase Financing Transaction" ("FSP SFAS 140-3"). FSP SFAS 140-3 requires an initial transfer of a financial asset and a repurchase financing that was entered into contemporaneously or in contemplation of the initial transfer to be evaluated as a linked transaction under FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", unless certain criteria are met, including that the transferred asset must be readily obtainable in the marketplace. FSP SFAS 140-3 is effective for fiscal years beginning after November 15, 2008, and will be applied to new transactions entered into after the date of adoption. Early adoption is prohibited. For the Company FSP SFAS 140-3 became effective January 1, 2009 there was no impact on the Statement of Financial Condition.
In May 2009, the FASB issued Statement No. 165 ("FASB 165") "Subsequent Events". This Statement establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this Statement sets forth: (1) the period after the balance sheet date during which management of a reporting entity should evaluate events and transactions that may occur for potential recognition or disclosure in the financial statements; (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This Statement is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this Statement had no impact on the Statement of Financial Condition.
In June 2009, FASB issued Statement No. 166 ("FASB 166") "Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140". This Statement improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and the transferor's continued involvement, if any, in the transferred financial assets. Additionally, the concept of qualifying special purpose entity is no longer relevant upon adoption. This Statement must be applied as of the beginning of the Company's first annual reporting period that begins after
BNP Paribas Capital Trust VI LLC
Notes to Financial Statements
November 15, 2009. For the Company the effective date of this Statement is January 1, 2010. Early adoption is prohibited. There was no impact on the Statement of Financial Condition
In July 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162" ("SFAS No. 168"). SFAS No. 168 establishes the FASB Accounting Standards Codification ("Codification") to become the source of authoritative U.S. generally accepted accounting principles ("U.S. GAAP") recognized by the FASB to be applied by nongovernmental entities. All existing accounting standard documents are superseded. All other accounting literature not included in the Codification will be considered non-authoritative. The Codification does not change current GAAP. SFAS No. 168 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company does not expect the adoption to have a material impact on the Company's statement of financial condition.
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Certification of Director and Treasurer
I, Sady Karet, certify that:
- I have reviewed this semi-annual report of Capital trust VI, LLC as of June 30, 2009;
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
Date: October 21, 2011
Title: Director and Treasurer
Sady Karet
Mr. Sady Karet
Capital Trust IV, LLC
C/o BNP Paribas
787 Seventh Avenue, New York, NY, 10019
Phone: (212) 841-2287
Fax: (212) 841-2992
14
Certification of Director and Treasurer
I, Sady Karet, certify that:
-
I have reviewed this semi-annual report of Capital trust VI, LLC as of June 30, 2009;
-
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
-
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
Date: October 21, 2011
Title: Director and Treasurer
Mr. Sady Karet
Capital Trust IV, LLC
C/o BNP Paribas
787 Seventh Avenue, New York, NY, 10019
Phone: (212) 841-2287
Fax: (212) 841-2992