ISSUER SERVICES
October 2007
Capital Raising Using Global Depositary Receipts
Section I.
Why investors invest internationally and purchase DRs?
2
To benefit from investment opportunities around the world
World Equity Market Capitalization
Domestic Market Cap., ‘06
LatAm/ Asia/ Canada 7% Pac 5% EMEA 22% USA 66%
LatAm/ Canada 7% Asia/ Pac 21% EMEA 31% USA 41%
Region
Value ($U.S.tril.)
USA EMEA
Asia/Pac Latin America Canada
18.9 13.8
10.5
3.5 46.7
TOTAL
1970
2006
Nearly 60% of the world’s market capitalization is outside the U.S.
World Federation of Exchanges 1970 World Equity Market Capitalization equaled $929 billion, 2006 equaled $46.7 trillion
3
To be fully invested in specific industry sectors worldwide
• There are roughly 36,000 regularly traded stocks around the world – Only 13,000 are U.S. based.
NonU.S. Equities 64%
U.S. Equities 36%
U.S. Only Portfolios Miss Opportunities in the Following Sectors… Sector Select Companies
9
9
Airlines
Building Products
Air France-KLM, British Airways
St. Goban, Cemex, Lafarge
9
9 9 8 8
Consumer Electronics of the world’s 10 largest
Tobacco
Philips, Sony, Matsushita, Siemens
BAT, Japan Tobacco
Auto Manufacturers
Metals and Mining Oil & Gas
Toyota, Daimler-Chrysler, Honda, Nissan
BHP Billiton, Rio Tinto, Anglo American BP, Total, RD/Shell, ENI
7
Wireless Communications
Vodafone, NTTDoCoMo, TIM
Two-thirds of all equity investments are located outside U.S. borders
Sources: World Federation of Exchanges Annual Report 2005 – www.worldexchanges.org 4 Brandes – Why Invest Globally? Report 2004
Diversification
U.S. Investors are Major Holders of Non-U.S. Equities
• 19.7% of the $4.1 trillion in equity assets is held in non-U.S. equities. • Of this, $1.1 trillion is invested in Canadian or Caribbean domiciled equities, a further $1 trillion is invested in non-U.S. ordinary shares and the remaining $900 billion is invested in DRs
Value of Equities Held by U.S. Investors $U.S. billions
U.S. Holdings 20,000 15,000 10,000 5,000 0 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06
Ord. Shares 33%
Non-U.S. Holdings
Canada/ Carib. 37% DRs 30%
5
Source: Federal Reserve, Flow of Funds Accounts of the United States, NYSE, Nasdaq, The Bank of New York Mellon estimates.
Improve Returns
• The U.S. has not been the world’s top-performing developed stock market in more than 15 years
• The best opportunities are consistently found beyond U.S. borders
160% 120% 80% 40% 0% -40%
HK 117% Finland 119% China 83% Finland 151%
HK 50% HK 32%
Finland 52%
Portugal Switz. Spain 48% 44% 40% Switz. N.Z. 9% 6% N.Z. 20%
Austria Greece 69% 63% Japan 26%
'91
'92
'93
'94
'95
'96
'97 '98
'99 '00
'01
'02
'03
'04
'05
'06
U.S. Market (S&P 500 Index)
MSCI Developed Market
Best Performing Markets
Source: Morgan Stanley Capital International Inc. (MSCI) Developed Markets Standard Index – all returns in U.S. dollars. 6
Map of Cross-border Financial Holdings
Circles show size of total domestic financial assets in $ billions
Other W.Europe UK $6,710 $3,620 Emerging EuroZone E.Europe $26,567 Asia $9,581
US $47,612
$1,780
Japan
$17,323
Hong Kong, Singapore $1,820
Source: McKinsey Global Institute 2005
Latin America $2,554 Rest of World
Australia, New Zealand
and Canada
$5,046 $5,046
$300bn to $500bn 7 $5,000bn +
$500bn to $1,500bn
$1,500bn to $5,000bn
Institutional Investors Holding DRs
Top Institutional Holders of Depositary Receipts
Largest Depositary Receipt Investors, 2006
2006 DR Investor Fidelity Management & Research Capital Research & Management Dodge & Cox Wellington Management Brandes Investment Partners NWQ Investment Management AllianceBernstein Capital Mgmt. Lazard Asset Management Capital Guardian Trust Barclays Global Investors
Source: FactSet, December 2006
2005 DR
Value
($mm) 44,826 31,653 23,871 23,455 23,353 20,044 14,079 11,411 10,360 10,049
Value
($mm) 34,234 27,601 19,629 19,439 23,900 9,274 9,450 9.664 11,825 8,081
DR Value
% Change 30.9% 14.7% 21.6% 20.7% -2.3% 116.1% 49.0% 18.1% -12.4% 24.4%
Total Equity Assets ($mm) 748,648 828,941 139,937 345,983 82,172 58,425 375,284 36,335 160,480 831,940
DR Value
% of
Total Equity 6.1% 3.7% 17.1% 6.8% 28.4% 34.0% 3.7% 31.1% 6.4% 1.2%
8
Significant Investment in Depositary Receipts
• More than 40 billion DRs outstanding with a market value of more than $1 trillion ($800 billion is held by U.S investors and $200 billion by non-U.S. investors) • If the DR market constituted a stock exchange of its own, it would have the world’s 10 th largest market capitalization
World’s Largest Stock Markets $U.S. Market Cap., ‘05 Exchange NYSE Tokyo SE Nasdaq London SE Osaka SE Euronext TSX Group 1 Deutsche Börse Hong Kong Exchanges DR MARKETS BME Spanish Exchanges Swiss Exchange $bb 13,310 4,572 3,603 3,058 2,964 2,706 1,482 1,221 1,054 1,010 959 935
Level I DRs 13% London & Lux. Listed and Other DRs 26%
NYSE, Nasdaq and Amex Listed DRs 61%
Australian SE
OMX Exchanges 3 Borsa Italiana
804
802 798
The DR market has size and depth
Source: The Bank of New York Mellon estimates, World Federation of Exchanges
9
Section II.
What are the benefits of a DR program?
10
What are the benefits of a DR program?
DRs Allow Issuers to: DRs Allow Investors to: • Invest in more than 2,000 sponsored depositary receipts from 76 countries
• Access deep international capital markets and flexible funding options
• Increase share valuation and liquidity • Diversify and broaden their shareholder base • Prepare for future acquisitions • Express the international commitment of their company
• Receive quotes and dividends in U.S. dollars • Clear and settle according to global standards
• Overcome foreign investment restrictions • Access improved information flow in English
• Heighten the profile for their products and services
11
What are the benefits of a DR program?
• Positive impact in the Company’s valuation
“DR OTC programs increase shareholder value by an average of 10% over the first year”, (Oxford Metrica Study of 767 DR programmes over 1980-2003)
“Cross-listed firms have better information environments, which are associated with higher valuations”, (Mark H. Lang, Karl V. Lins, Daruis Miller Study) “Where DRs cease trading completely issuers and investors lose out not only on the deliberately reduced financial disclosure but also in terms of investor access, visibility, investor relations and consequently in reduced liquidity, (Oxford Metrica Study 2003)
• Enhance the overall trading and liquidity in the Company in the home market and overall.
“Over-the-Counter (OTC) DRs improve liquidity in home market by 23% on average, Oxford Merica Study 2003).
• Increase shareholder diversity.
49% of US Funds are available to buy ADRs, increasing by 88% the potential investor audience in the company (Federal Reserve Bank).
12
What are the benefits of a DR program?
• Greater access to International investors (including domestic and retail) who may be currently unable to invest in the Company due to restrictions limiting their ability to invest in offshore securities.
Many funds are not permitted to invest in non-US securities unless they are in DR form such as Dean Witter- Balanced Growth Fund, Smith Barney – Large Capitalization Growth Fund, etc.. Many funds use DRs to increase international exposure within the portfolio beyond fund or charter limit such as Van Kampen-Mid-Cap Growth Fund, AIM Family of Funds – Large Cap Value Fund, etc..
• Increase investment activity in the Company from Int’l Investors.
Large Int’l institutional investors, depending on the portfolio, fund or pension they manage, use shares or DRs. Brandes holds 54.9% of their portfolio in DRs, Capital Int’l holds 54% of their portfolio in DRs, Lazard holds 30.8% in DR form, etc..
Wrap Accounts and Hedge funds, two of the fastest growing areas of investment, use actively DRs in their portfolios.
• Expand International investor base.
49.5% of US Institutional Investors invest in ADRs only, compared to 5% that invest only in foreign ordinary shares and 18.9% that invest both in shares and ADRs. (Georgeson & Company Study)
13
What are the benefits of a DR program?
• Enhance the visibility of the Company in the International public market and awareness among International brokers, analysts and investors, which should benefit the Company’s cost of capital.
Through promotional efforts made by the depositary bank such as tombstone, announcements, broker notification, press release, access to regional broker networks, research magazine, Bloomberg Forum, NYSSA presentations and other secondary market support efforts.
•
Greater analyst & press coverage.
There is significant increase in analyst coverage (128%), Wall Street Journal articles (32%), FT articles (78%) with ADR programs, (International Cross Listing and Visibility, Baker, Nufsinger and Weaver).
The increase coverage by the Int’l financial press on companies with DR programs benefits the company’s visibility among US investors and the overall image of the company in the US market .
# Of additional instances with ADR program 6.20 1.64 6.56 6.08 % Increase 128% 32% 78% 37%
Effect # Of new analysts providing research coverage # Of additional Wall Street Journal articles per year # Of additional FT articles per year # Of additional domestic news articles per year
14
What are the benefits of a DR program?
• Buy-side analysts recommend investing in international stocks to their client base.
An DR program facilitates that these recommendations are translated into investments from international investors.
• Increase the dissemination and availability of financial information on the Company in the international markets.
The depositary bank provides several channels for distributing information to investors, such as 24-hour call center, corporate action email program, internet access account, tax reporting, etc.
• Depositary Receipts represent an important vehicle for International investors when investing internationally (e.g. in the USA, where there is a total reported investment in DRs of $780 billion, or 27% of the total US international investment
15
What are the benefits of a DR program?
• Reduced volatility
The performance during the last bear markets of European companies with DR programs compared to those without ADR programs indicates a reduced volatility in the share price for those companies with DR programs.
• A DR provides other international brokers with a security that they could trade, increasing the probability of interest in trading and or issuing research on the Company.
• Foster greater name recognition and understanding of the Company in the international markets.
16
Section III.
What are Depositary Receipts?
17
What are Depositary Receipts?
DRs G lobal
• United States and/or Internationally-traded equities that represent home-market shares • Can be used to list on an exchange or to raise capital in the U.S. or globally
• Can be adapted to meet specific marketing needs
American
No Major Difference Between ADRs and GDRs
18
Settlement Process
Issuance
Internat’l Investor Internat’l Broker
--Buy DRs-
Cancellation
London Stock Exchange
Internat’l Broker Internat’l Investor
-- Sell DRs -Issue DRs Cancel DRs
The Bank of NY
Buy Shares Sell Shares
Confirm Deposit
Instruction to Release
Deposit Shares --Buy Shares--
Local Custodian
Release Shares -- Sell Shares --
Local Investor
Local Broker
Local Exchange
Local Broker
Local Investor
19
Program Comparison
Issuer
Non-Capital Raising Transactions
Existing Shares Only
Level I ADR
Capital Raising Transactions
Selling New Shares
Over-the-Counter (OTC) Traded
Level I GDR
Unlisted
Level III ADR
U.S. Listed
Level II ADR
U.S. Listed
Level III GDR
Internationally Listed
Internationally Listed
Level II GDR
Existing shares or new shares can be used
20
Requirements Determine Program Type
Program Visibility/ Liquidity
High
Level III ADR Level II ADR
Medium
Level I ADR
Level II GDR and Level III GDR
Low
Level I GDR
Low
Medium
High
Disclosure Requirements
Generally, Increased Disclosure Results in Increased Visibility
21
Alternatives for an International Offering
International Offering
Non-US Investors
US Investors
Regulation S Offering (DR and/or Shares)
ADR Level III Exchange Listed Public Offering
Offering done outside the USA and without US investors. Does not require U.S. GAAP No need to register with SEC
Requires U.S. GAAP (Form F-1 and 20-F) Extensive disclosure required by SEC Sarbanes-Oxley Regulations Listed on a U.S. Exchange (NYSE, NASDAQ)
Listed (LSE) GDRs
Rule 144A Private Placement Non-Listed (OTC) GDRs
Restricted to QIBs (Qualified Institutional Buyers) Disclosure as required by QIBs Not registered with the SEC
GDR Offerings
Listed (London) GDRs
Non-Listed (OTC) GDRs
Professional Securities Market
(Exchange Regulated Market)
Not subject to Prospectus Directive
Main Market
(Regulated Market)
Subject to Prospectus Directive 3 year audited IFRS
International Placement Memorandum
A full international placement
Local Prospectus + Documents for Int’ Investors
There is no full detailed int’l
requirements
No IFRS
memorandum is produced.
Not Subject to Prospectus
placement memorandum.
Not Subject to Prospectus
Directive
No IFRS
Directive
No IFRS The simplest
23
Alternatives for Secondary Trading
Secondary Trading Outside the USA
In the USA
Rule 144A/Private Market Shares and ADRs
Trading in the Home Market
Limited trading among QIBs (PORTAL) Usually trading back on Local Markets Flow back over time
US & Non US-investors US QIBs (can receive European research)
ADR Level I – Over-the-Counter
Regulations S DR Facilities
Does not require U.S. GAAP Same disclosure as home country First Step Program
US & Non-US investors Not registered with the SEC
ADR Level II – Exchange Listed
Requires U.S. GAAP (Form 20-F) Extensive disclosure required by SEC Usually an intermediary step to increase visibility
Listed (London,Lux,) GDRs
Non-Listed (OTC) GDRs
Requirements Determine Type of Program
U.S. Securities Acts U.S. Registration Statement
Type
Degree of Disclosure
Listing Alternatives
Ability to Raise Capital
Level I
ADR Level I GDR Level II
1933, 1934
F-6, 12g3-2(b)
None
OTC
Pink Sheets
Must Upgrade
None 1933, 1934
None F-6, 20-F
None None
None NYSE, NASDAQ, Amex
None Must Upgrade
ADR Level III
ADR Level II & Level III GDRs None
Detailed/SOX 1933, 1934 F-1 & F-6
20-F None/12g3-2(b)
Rigorous/SOX
Detailed/SOX EU Prospectus Directive and/or U.S.144A
NYSE, NASDAQ, Amex
Yes – Full U.S & Global
London, Lux. DIFX, U.S. PORTAL
Yes – Limited U.S. & Global
Depositary Receipts Offer a Structure to Fit All Needs
25
Section IV.
Growth of the DR Market
26
Total Sponsored DR Programs
• Continued, but more rational growth in the number of DR programs • 2,015 sponsored programs from issuers in 76 countries
Total Sponsored DR Programs
U.S.-Listed (Level II & III DRs) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 29 58 230 159
'92
Level I (OTC DRs)
144A/Reg. S (GDRs)
603 530 440 333 225 90 11 180 131 108 130
'90 '91
642
660
645
664
660
676
744
839
892
586 493
623
654
633
623
660
683
671
684
684
666
675
402
295 203
'93
273
'94
319
'95
398
'96
458
501
520
570
563
537
504
498
484
473
448
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
1H 07
Source: The Bank of New York Mellon, numbers are of sponsored programs only 27
Non-U.S. Equities – Diverse Selection of DRs
Latin America 14% Asia Pacific 43%
Europe, Mid East & Africa 43%
Country India UK Japan Australia Russia Hong Kong
Programs 224 154 152 134 127 116
Country Taiwan Mexico Brazil South Africa France Germany
Sector Banks Tech Hardware & equip. Pharma & Biotech Software & computer Svc Electricity Fixed Line Telecom Oil & Gas Producers Industrial Metals Construction & Materials General Finance Travel & Leisure Food Producers Programs Chemicals 111 Industrial Engineering 73 Media 99 Electronics & Elec. Eq. 59 Mining 50 Real Estate 50 Personal Goods Industrial Transport
Programs 188 138 95 85 79 79 79 78 75 71 68 67 66 57 54 53 53 50 47 46
DR issuers from 65 countries and all 51 Dow Jones’ defined sectors
28 Source: The Bank of New York Mellon; www.adrbny.com
DR Trading Volume and Value
2006 DR trading volume was 52.6 billion - the best ever - and has increased every year since 1990. DR trading value was $1.5 trillion - the best ever. If the DR market constituted a stock exchange of its own, it would be the world’s 9 th most actively traded
World’s Largest Stock Markets Domestic Trading Value, 2006 Exchange $bb
NYSE 12,813
8,605 4,382 3,185 2,774 1,747 1,548 1,223
Annual DR Trading
U.S. Listed 1,600 1,200 800 400 0
Value ($bn) Volume (bn) 60 50 40 30 20 10 0
Nasdaq Tokyo SE London SE Euronext Deutsche Börse BME Spanish Exchanges Borsa Italiana
DR MARKETS Korea Exchange
TSX Group OMX Exchanges Australian SE Taiwan SE. Hong Kong Exchanges
1,210 1,204
902 898 636 583 463
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06
Sources: DR Trading – NYSE, Nasdaq and AMEX Stock Exchange Value - World Federation of Exchanges
29
Section V.
The DR Market in 2007
30
The Bank of New York ADR Index
• The Bank of New York ADR Index posted strong returns during the first half of 2007, up 10.7% year-to-date.
Index Performance
Jan. 1, 2007 – June 29, 2007
Comparative Returns of Indices
40 C omposite Asia MSC I EAFE Europe Latin America S&P 500
BNY ADR Indices BNY ADR Composite Index BNY Europe ADR Index BNY Asia ADR Index BNY Latin America ADR Index BNY Emerging Markets ADR BNY Developed Markets ADR
Close 185.1 186.9 167.4 349.3 314.8 142.8
% Change 10.7 11.3 5.8 25.5 17.4 9.7
30
20
BNY BRIC Select ADR Index Major Global Market Indices
4208.8 Close
1,503.3 13.408.6 486.2
54.5 % Change
6.0 7.6 12.5
10
S&P 500 Index Dow Jones Industrial Average MSCI AC World Index ex USA
0
MSCI EAFE Index
MSCI AC Europe Index
6,372.0
993.4 200.2 7.025.6 1,738.7
11.0
12.6 9.9 27.0 17.7
-10 J
F
M
A
M
J
J
MSCI AC Asia Pacific Index MSCI EM Latin America Index MSCI Emerging Markets Index
1H07
MSCI BRIC Index
401.2
56.6
DRs provide investors with convenient diversification opportunities
31
Source: The Bank of New York ADR Index
Increase in trading activity from investors
• • More than $1.34 trillion of DRs traded on U.S. and non-U.S. markets and exchanges during the first half of 2007, up 45% year-on-year GDR Trading (LSE’s International Order Book) was $195 billion, 30% higher year-on-year.
Annual DR Trading
U.S. Listed 1600 1200 800 400 0
Value ($bn) Volume (bn) 60 50 40 30 20 10 0
Annual DR Trading
International Order Book 300
Value ($bn)
200
100
0 '98 '99 '00 '01 '02 '03 '04 '05 '06 1H07
'98 '99 '00 '01 '02 '03 '04 '05 '06 1H07
32
Source: NYSE, Nasdaq and AMEX / London Stock Exchange
New DR issuance activity continues to increase
• New program establishment is back – best year since 2000
• During the first half of 2007, there were 53 new DRs offerings, raising $25.8 billion • Emerging markets are dominant
New Sponsored DRs
250
U.S.-Listed
Level I
GDR
Annual DR Capital Raising Value
Primary and Follow-on Offerings ($bn) 50 40 30 20 10 0
InternationallyListed U.S.-Listed
200
150 100
50
0 '98 '99 '00 '01 '02 '03 '04 '05 '06 1H07
'98
'99
'00
'01
'02
'03
'04
'05
'06
1H07
33
Largest DR Capital Raisings 1H2007
Company
VTB Bank Taiwan Semiconductor Manufacturing
ICICI Bank Sterlite AFI Development PIK Group
Country
Russia Taiwan
India India Russia Russia
Type
Primary Follow-on
Follow-on Primary Primary Primary
Exchange
London NYSE
NYSE NYSE London London
Date
5/15/07 5/17/07
6/25/07 6/20/07 5/11/07 6/5/07
DRs (mm)
491.7 240.0
49.9 130.4 110.0 57.6
DR DR Value Price ($ mil)
10.56 10.68
49.25 13.44 14.00 25.00
5,192.3 2,563.2
2,460.0 1,753.1 1,540.0 1,440.4
Magnitogorsk Iron & Steel Works Royal Bank of Scotland – Pref. S Integra Group
HBOS FTF Preference Embraer United Bank
Russia UK Russia
UK Brazil Pakistan
Primary Follow-on Primary
Follow-on Follow-on Primary
London NYSE London
None NYSE London
4/27/07 6/28/07 2/22/07
5/21/07 2/7/07 6/29/07
77.7 38.0 45.9
0.8 17.8 50.6
12.50 25.00 16.75
1000.00 41.00 14.00
971.8 950.0 768.3
750.0 730.5 708.2
Focus Media
Polymetal New Oriental Education & Technology
34
China
Russia China
Primary
Primary Primary
NASDAQ
London NYSE
1/25/07
2/12/07 2/8/07
7.7
77.0 14.3
79.50
7.75 41.50
609.0
596.5 593.5
Section VI.
Role of Depositary Bank
35
Role of the Depositary
A Depositary Bank Services Three Parties Equally
The ISSUER
Issuer Solutions
Company Interface Implement & Structure DRs Value-added Services Strategic Program Consulting M&A Consulting Program Status and Analysis Enhance Program Visibility Promote DR Program
The INVESTORS
Investor Solutions
Investor Interface Maintain Holder Records Process Corporate Actions Respond to Inquiries Mail to DR Holders Reinvestment Plan Admin. Tax Reporting Process Dividends
The BROKERS Broker Solutions
Broker Interface Issue DRs Cancel DRs Facilitate Orderly DR Flows Maintain Clearance Accounts Maintain Custody Accounts Negotiate Broker Fees Promote DR Benefits
Issuers, Investors and Brokers are Equally Important
36
Role of the Depositary Bank
Integral part of IPO or PO/Program Establishment Process
•Deposit Agreement / Prospectus / IPO GDR Settlement
Daily Trading
•Service cross-border settlement for brokers/investors
Administrator of program for client
•Process AGMs for DR Holders
•Pay stock dividends •Communicate with investors •Configure local practices (tax reclaim, stamp tax, etc) •Corporate Actions processing (Secondary Offerings/ Rights Offerings/ M&A/ Employee Programs)
Registrar and Stock Transfer Agent Advise on Investor Relations
•Corporate Governance
•Investor Relations •Advise on Market Developments
37
Promotional Capabilities and Market Access
Targeted Promotional and Liquidity Services Actively Highlight the DR Program
Buy-Side
Sell-Side
Retail
General Ongoing Promotional
Investor Communication Services • Consultant and Investment Manager Marketing Group • Investor Networks • Investor Presentation Package • BNY ADR Index • BLDRS and HOLDRs • DR Converter • ADR Insight Investor Identification and Targeting • Global BuyDIRECT • BNY Call Center • Friedland Capital Seminars • Ordinary Share to DR Conversion Campaign
38
DR Management Report Package • DR Alert • Daily E-Mail Service • ADR Research Publications • Shareholder Analysis • Market Maker Solicitation • Annual/Interim Reports • U.S. Regional Broker Network • G-Trade Service • Internet Access • Negotiated Issuance Fees • Free Issuance List
Retail Broker Marketing Support • WI Link • Money Show • NAIC Investment Clubs • Wall Street Squawk Box Calls
Depositary Receipt Quarterly / Annual Reviews • Investor Relations Support • Company Presentations and Seminars • Road Show Support • New York Society of Securities Analysts Presentations • Bloomberg Forum
Section VII.
Profile of The Bank of New York Mellon
39
Profile of The Bank of New York Mellon
• Experienced People, Committed Bank – New Focus • Acquisition of JPMC’s corporate trust business for our retail and middle market bank enhanced our focus securities servicing, asset management and private banking Businesses where we have scale, technology advantage and skills Providing innovative products to issuers, investors, and intermediaries
The Bank of New York Mellon’s Pro Forma Revenue Profile
Corp. & Other Pvt. Bk. & 1% Asset Mgmt. 8% Treasury 7% Execution, Clearing 19% Issuer Services 28% Investor, Broker Services 37%
91% of revenues from securities servicing
• #1 DRs, Custody, Corp. Trust, Clearing • #2 Securities Lending, ETFs
• #3 Stock Transfer
Institutional commitment - securities servicing and DRs are a core offering
40
Profile of The Bank of New York Mellon
Market
Wall Street Analysts Agree Product Depositary Receipts Corporate Trust Securities Clearance Securities Lending Global Custody Mutual Funds Unit Investment Trust Stock Transfer
A Global Processing Powerhouse. Bank of New York is the most diverse processing bank. Bank of New York has the leading market share in number of DR programs (over two thirds) and is ranked number one in the trading of DRs, with a market share of 60 % plus. Deutsche Bank - April 2007
“Bank of New York clearly has a dominant share of the depositary receipts market. Based on all depositary receipt programs, including level I, II, and III American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs), Bank of New York has a 64% market share.” - Bear Stearns, February 2006 “With 64% market share across all DR programs, BK is a market leader in this business” - Morgan Stanley, February 2006
Rank #1 #1 #1 #1 #1 #2 #2 #1
“We view Bank of New York’s independence—the fact that it doesn’t have an investment bank—as a competitive advantage, notably when a DR is created as part of a capital raising event, say an IPO or follow-on associated with an M&A transaction.” - UBS Warburg, February 2006
41
Profile of The Bank of New York Mellon
The Bank of New York Mellon is the Right Choice
Depositary Receipts
• The world’s leading depositary bank with 1,273 sponsored clients, representing 63% of all sponsored DR programs from 63 countries. Ranked Number One in every meaningful market share category including listings, successorships, trading value, trading volume, capital raisings and privatizations
• #1 in quality and the most proactive depositary bank in advising and assisting companies with promoting and managing their DR programs • The only depositary without significant investment banking and research conflicts of interest
Most Experienced & Consistent Personnel
Best Secondary Market Support
Proven Track Record and Business Commitment
Leading Stock Transfer Agent
Leading Global Custodian
Corporate Trust - Trustee and Fiscal Agency
Numerous Value-added Support Services Personalized and Customized Service Advanced Analytical and Reporting Technology
• Number 1 Overall Global Trustee and #1 Trustee in nearly all domestic and international debt categories • Over $8 trillion in outstanding debt and over 90,000 clients worldwide, with 90,000 appointments.
BNY Mellon Shareowner Services
• Number 1 in Quality and Market Share, with 1,300 transfer agent clients representing 35 million shareholder accounts
42
Profile of The Bank of New York Mellon
Canada 1,500 employees in 2 provinces U.S. 31,000+ employees in 34 states Americas 400+ employees
Asia-Pacific 2,500+ employees servicing 12 countries
Europe, Middle East & Africa 6,200+ employees
Global presence in 37 countries, serving more than 100 markets with 40,000 employees
43