Cross-Border Trends and Solutions in Issuer Services

1. Cross-Border Trends andSolutions in Issuer Services Istanbul, Turkey 18th October 2008

2. After a five year period of increased leverage in the financial system, sub prime distress acted as a catalyst for a broader systemic crisis. We are now in a third phase of massive deleveraging within the banking system. Market Update: Different Phases of The Liquidity/Credit Crisis Precursor Increase in Leverage in Financial System 2002 - 2007 Phase 1 Initiation - Sub-prime and Structured Products Crisis Phase 2 Illiquidity and Counterparty Risk Phase 3 Government Intervention Phase 4 Liquidation / Deleveraging Balance Sheet Reduction Capital Raising Source: Citi.

3. Availability of liquidity has not only been impacted by absolute writedowns by banks and reductions in regulatory capital, but also by the associated deleveraging impact. Enormous Liquidity Has Already Been Drained From The System Estimated Reduction in Credit Availability Writedowns / De-leveraging from Banks and Brokers $5,000 BillionBanks: ~20x LeverageBrokers: ~30x Leverage U.S. Commercial Paper Market $500+ Billion Structured Finance / ARS Market $1,000+ Billion Other ? Over $6.5 Trillion of Liquidity Drainedfrom System to Date and More to Come Source: Bloomberg.

4. In such an environment of heightened competition for liquidity, corporates need to think outside the box and be prepared to act opportunistically. Corporates will need to take advantage of ad hoc issuance windows and access markets several times for smaller amounts during this period of financial distress. Funding Options - Remain Opportunistic and Prepared Selected Alternative Sources of Liquidity Fixed Income Equity Corporate / Strategic Actions • Sukuk • Eurobond • Secured Lending • US 144A • US Private Placement • Samurai/EuroYen • AFLAC • Schuldschein • Niche Currencies • Primary Capital raising • Capital Raised via Monetisation of non-strategic stakes in public companies • Both options can be structured in either the public markets or privately-negotiated • Common equity and/or derivatives solution are possible structures - DRs • Working Capital Management • Capital Distribution Policies • Dividend Policy and Payment Schedule • Share Repurchase Program • Asset Sales • Stock-for-stock mergers

5. Where does Issuer Services fit in a Global Bank?

6. Issuer Services provides global of corporate trust and agency services. London New York Hong Kong Dubai Singapore What does Issuer Services cover in general ? • Issuer Services provides agency and fiduciary services to support the capital market transactions • Dedicated operations, transaction, legal and relationship staff in a number of key locations • Maintains direct electronic links with all major markets: DTC, Euroclear, Clearstream • Acts as a depositary bank for DR programmes and common depository for debt issuance • Supports assets under custody in excess of $4 trillion in debt and equity • Services offered to more than 2,000 corporate, sovereign and SPV clients around the globe Coverage London: EMEA (Europe, Middle East and Africa) Dubai: Middle East New York: North and Latin America Singapore & Hong Kong: Asia and Australasia

7. A broad range of business drivers have resulted in a variety of activities and services. Issuer Services supports a wide range of financing activities Business Drivers Instruments Roles • Bonds • Medium Term Notes • Commercial Paper Administrative, fiduciary / fiscal services associated with the issuance of debt as well as acting as common depositary Straight Debt Above roles as well as services specifically related to the issuance of structured debt, including securing of assets, asset and cash flows analysis • ABS • MBS • Covered Bonds Structured Debt • Projects of all nature in terms of: • Domicile • Industry • Assets Provide services related to the servicing and securing of assets and cash flows associated with security packages for project finance transactions Project Finance • Mergers • Takeovers • Spin-offs Manages the tender and exchange process for large, complex M&A transactions M&A • Loan Facilities • Loan Administration Act as a Loan Facility Agent Administers clients investments in loans Loans • Sukuk • Shari’a Compliant Financing Delegate to the Trustee, Transaction Administrator, Investment Agent, Paying Agent, Custodian, Security Agent Islamic Finance • ADRs & GDRs • Local DRs Depositary Bank, Paying Agent Depository Receipts

8. A Depositary Receipt (DR) is a negotiable instrument issued by a depositary bank evidencing ownership of shares in a foreign corporation. Overview – Depositary Products / Solutions • American Depositary Receipts (ADRs) – since 1928 • An ADR represents ownership in the shares of a foreign company trading on US financial markets. ADRs enable US investors to buy shares in foreign companies without undertaking cross-border transactions • Global Depositary Receipts (GDRs) – since 1990 • GDRs are DRs offered to investors in two or more markets outside the issuer’s home country, usually pursuant to Rule 144A and Regulation S under the Securities Act of 1933 • Local Depositary Receipts – since July 2008 • LDR programs extend the traditional ADR concept to markets globally such as Hong Kong Depositary Receipts (HDRs) • Global Depositary Notes (GDNs) - since 2007 • GDNs offer an alternative way for international investors to invest in a domestic bond; this product is particularly attractive for countries with currencies that do not settle through the International Clearing Settlement Depositories

9. The core operational services performed are the issuance/cancellation of the DRs, custody of the issuer’s ordinary shares, processing of dividend payments and other corporate actions, and dissemination of information to the DR holders. Depositary Receipts – Operational Flows

10. Looking forward, the Depositary Receipt space may be divided into two categories: Conventional Depositary Receipts and Local Depositary Receipts. Depositary Receipts – Looking Forward Source: Citi DR Universal Issuance Guide

11. The scope and depth of the Depositary Receipt (DR) space has grown significantly over the part several years. Depositary Receipts – Trends • An increasing number of corporations have sought to capitalize on the benefits of a DR program and a growing number of investors have embraced the DR product as a means to invest globally • The market value of outstanding DRs is approximately US$1.8 trillion (as of 1H’08), up 38% year-on-year-2007 and 50% year-on-year-2006 • DR trading value during 1H’08 was approximately US$2.34 trillion, up 85% year-on-year-2007 and 157%-year-on-year 2006 • In 2007, capital in the amount of US$54.8 billion was raised in DR form, up 32% from 2006 and 68% from 2005 • 2,093 DR programs (among 76 countries) currently exist (as of 1H’08), up 4% year-on-year-2007 and 8% year-on-year-2006 • Several stock exchanges are in the process of replicating the models for DR issuance and trading set forth in the U.S. (American Depositary Receipts—ADRs) and U.K. (Global Depositary Receipts—GDRs) in order to provide the DR solution to its investor base • Local Depositary Receipt programs Source: Citi DR Universal Issuance Guide

12. A once ADR-centric solution has become one of virtually equal ADR and GDR issuance. Conventional Depositary Receipts – Capital Raising • Why did this trend occur? • The general rise in prosperity of non-U.S. markets since 2001 • Sarbanes-Oxley Act (2002) • More cumbersome and less cost-effective regulatory requirements for U.S.-listed companies have discouraged ADR issuance • GDRs have presented a more efficient and less expensive alternative to U.S.-listed DR programs • U.S. recession (2001-02) • U.S. investor wallet size had diminished 1. Total Capital Raised in Conventional DR Form (Right) (USD billions) 2. % Value of Capital Raised in Conventional DR Component (Left) Source: Citi DR Universal Issuance Guide

13. By year-end 2007, 5% of the total value of share trading on the DR exchanges was transacted in DRs. Depositary Receipts – Trading Value • What does this trend signify? • A general increase in the value of the DR asset class, supported by growing demand among asset managers for international investment • Increased use of DRs as a preferred vehicle for cross-border transacting • Greater acceptance among asset managers of the trading properties of DRs • The relative deepening of the DR market versus the broader market Value of Share Trading (USD trillions) CAGR = 23% CAGR = 37% Source: Citi DR Universal Issuance Guide, The World Federation of Exchanges

14. By year-end 2007, 20% of all equity capital raising was transacted in DR form. Depositary Receipts – Capital Raising • What does this trend signify? • Further evidence of the robust growth of global issuers • Greater relative growth of non-U.S. and non-U.K companies versus U.S. and U.K. companies, respectively • The Asia Pacific, Latin America and CEEMA regions led the way • Augmented demand among asset managers for global investment vehicles Capital Raising (USD billions) CAGR = 18% CAGR = 86% Source: Citi DR Universal Issuance Guide, The World Federation of Exchanges

15. The success of the DR model has led several other stock exchanges & local regulatory bodies to either implement or take steps to implement proprietary platforms for DR issuance and trading. Local Depositary Receipts • This imminent evolution of the DR space coincides with the emergence and/or deepening of liquidity pools in regions such as MENA • The engagement of a depositary bank is a necessity • Depositary banks provide stock exchanges with the expertise, experience, infrastructural guidance and relationships (issuers and investors) required to operate successfully in the DR space • Global issuers are keen to leverage the attributes of a Local DR program • Facilitate access to fresh liquidity pools for the purpose of executing a capital raise • Function as a vehicle for establishing and/or enhancing corporate visibility within a new marketplace • The advent of Local DRs broadens the universe of solutions available to local asset managers and other investors (including retail investors) • Enable portfolio diversification • Provide a more cost-effective and efficient manner in which to invest globally

16. Stock exchanges can establish DR programs without direct involvement of the company. Unsponsored Local Depositary Receipts • Unsponsored DR programs are set up without the company’s participation or even its consent • Unsponsored DR programs have no regulatory reporting requirements and are issued in accordance with market demand • Unsponsored shares are typically trade over-the-counter (OTC), but can also be traded on an exchange • The respective exchange and/or local governing body would establish the regulatory framework • The depositary implements the DR program based on the regulations • The depositary will provide most of the corporate action services, such as name change, dividend distributions, etc., except for proxy actions or AGM/EGM Sample Citi Unsponsored DR Programs Source: Citi DR Universal Issuance Guide

17. A Global Depositary Note (GDN) is essentially a debt security version of the Depositary Receipt (DR) product. Defining Characteristics of Global Depositary Notes • Global Depositary Notes (GDNs) • A negotiable instrument issued by a depositary bank evidencing ownership of debt securities (notes) of a foreign issuer • The underlying instrument is the local currency denominated note • Represent local currency denominated notes replicated in U.S. dollars or another currency • Trade, settle and make payment of interest and principal in U.S. dollars or another currency • Assigned a dedicated debt CUSIP • Can be incorporated as a component of a new issue or an enhancement to an existing one • Generally provide the opportunity to exchange the GDNs for underlying notes and vice versa (“issuance and cancellation”) • Governed by U.S. law • Typically Rule 144A & Regulation S bifurcated • Local market nature of the product can serve to eliminate requirement of cross-default • Cross-default is prevalent with U.S. dollar denominated global debt

18. GDNs and DRs represent flexible financing tools through which various debt instruments can be wrapped Participants in GDN Issuance Transaction • The issuer and underwriter negotiate the terms of the local currency denominated note offering. The underwriter leads and coordinates the origination process • Based on investor subscrip!ion to the actual local currency denominated note offering, distribution is made to local investors • Based on investor subscrip!ion to the GDN tranche of the note offering, a matching amount of actual local currency denominated notes are deposited with the custodian • The depositary issues GDNs versus the local currency denominated notes held under custody for distribution to investors Issuer Underwriter Sukuk 1 Corporate 1 Sovereign Supranational 2a 2a 2b Custodian Local Investors 2b 3 Depositary GDN Investors 3 4 4

19. Sukuk Holders(Investors) 2. Issues sukuk to investors5. Periodic coupon payments 3. Sukuk proceeds 1. Sale of assets/title 4. Lease of assets Special Purpose Vehicle (SPV) Original Seller or Lessee(Sovereign/Corporate) Seller(Sovereign/Corporate) 5. Periodic rentals and capital payments 3. Sukuk proceeds Understanding Islamic Debt Securities Overview Geographic Distribution Total Issuance in Top Countries, 2000-2007(US$bn) • What is a sukuk? • Debt-based instruments or financial certificates that are Shariah compliant • Comply with Shari’a laws that prohibit the collection of interest by deriving returns from underlying physical assets • Issued by governments, banks, and corporate entities • Structure • 14 different classes of Islamic debt securities • Common types: • Sukuk al-Ijara • Sukuk al-Musharaka • Sukuk al-Murabahah Total Value of Outstanding Sukuk as of Dec. 2007 = $82.7 bn Sukuk al-Ijara Structure Source: International Islamic Financial Market

20. Local DR platforms can provide the opportunity to capture additional capital flows through offering Shari'a compliant DRs. Shari'a Compliant Depositary Receipts • The universe of global companies that are considered Shari'a compliant is extensive • Most established fund companies now offer Shari'a compliant product • Many exchanges have developed Shari'a compliant indices • DRs enable investors in applicable markets to invest internationally in Shari'a compliant companies • Many companies that have DR programs sponsored by Citi are considered Shari'a compliant (see examples below) • These companies are currently components of Shari'a compliant funds or indeces Source: Citi DR Universal Issuance Guide

21. A similar structure could be used to wrap a Sukuk into a DR programme Obligor as Seller Issuer (SPV) The Benefits of a Global Depository Sukuk (GDS) Issuance? GDS benefits to the markets • Increases international awareness of and focus on local market and encourages other issuers in that market to seek listings • International listings engender improved perception of quality within the market • Creates view that local market is flexible and forward looking Obligor leases back assets as Lessee Rental Lease Asset Underwriter Purchase Price Sukuk Certificates Sukuk Certificates Local Investors Custodian Depositary GDS Investors GDS

22. [TRADEMARK SIGNOFF: add the appropriate signoff for the relevant legal vehicle] © 2008 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. © 2008 Citigroup Global Markets Limited. Authorized and regulated by the Financial Services Authority. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. © 2008 Citibank, N.A. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. © 2008 Citigroup Inc. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. © 2008 [Name of Legal Vehicle] [Name of regulatory body.] All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. In January 2007, Citi released a Climate Change Position Statement, the first US financial institution to do so. As a sustainability leader in the financial sector, Citi has taken concrete steps to address this important issue of climate change by: (a) targeting $50 billion over 10 years to address global climate change: includes significant increases in investment and financing of alternative energy, clean technology, and other carbon-emission reduction activities; (b) committing to reduce GHG emissions of all Citi owned and leased properties around the world by 10% by 2011; (c) purchasing more than 52,000 MWh of green (carbon neutral) power for our operations in 2006; (d) creating Sustainable Development Investments (SDI) that makes private equity investments in renewable energy and clean technologies; (e) providing lending and investing services to clients for renewable energy development and projects; (f) producing equity research related to climate issues that helps to inform investors on risks and opportunities associated with the issue; and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions. Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and, where appropriate, to mitigate those risks. efficiency, renewable energy & mitigation