[Federal Register: March 13, 2008 (Volume 73, Number 50)]
[Notices]
[Page 13576-13581]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr08-85]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
Notice of a Proposed Amendment to PTE 93-31; Proposed Amendment
to Prohibited Transaction Exemption (PTE) 93-31, 58 FR 28620 (May 14,
1993), as Amended by PTE 97-34, 62 FR 39021 (July 21, 1997), PTE 2000-
58, 65 FR 67765 (November 13, 2000), PTE 2002-41, 67 FR 54487 (August
22, 2002) and PTE 2007-05, 72 FR 13130 (March 20, 2007), (PTE 93-31),
Involving Bank of America, N.A., the Successor of NationsBank
Corporation (D-11446)
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Notice of a Proposed Amendment to PTE 93-31.
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SUMMARY: This document contains a notice of pendency before the
Department of Labor (the Department) of a proposed amendment to PTE 93-
31, an Underwriter Exemption.\1\ The Underwriter Exemptions are
individual exemptions that provide relief for the origination and
operation of certain asset pool investment trusts and the acquisition,
holding and disposition by employee benefit plans (Plans) of certain
asset-backed pass-through certificates representing undivided interests
in those investment trusts. The proposed amendment to PTE 93-31, if
granted, would provide a six month period to resolve certain
affiliations between LaSalle Bank, N.A., the Trustee, and Bank of
America, N.A. as members of the Restricted Group, as those terms are
defined in the Underwriter Exemptions (the Proposed Amendment). The
Proposed Amendment, if granted, would affect the participants and
beneficiaries of the Plans participating in such transactions and the
fiduciaries with respect to such plans.
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\1\ The ``Underwriter Exemptions'' are a group of individual
exemptions that provide substantially identical relief for the
operation of certain asset-backed or mortgage-backed investment
pools and the acquisition and holding by Plans of certain securities
representing interests in those investment pools.
DATES: Written comments and requests for a hearing should be received
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by the Department by April 14, 2008.
ADDRESSES: All written comments and requests for a public hearing
(preferably, three copies) should be sent to the Office of Exemption
Determinations, Employee Benefits Security Administration, Room N-5700,
U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC
20210, (Attention: Exemption Application Number D-11446). Interested
persons are invited to submit comments and/or hearing requests to the
Department by the end of the scheduled comment period either by
facsimile to (202) 219-0204 or by electronic mail to
moffitt.betty@dol.gov. The application pertaining to the Proposed
Amendment (Application) and the comments received will be available for
public inspection in the Public Disclosure Room of the Employee
Benefits Security Administration, U.S. Department of Labor, Room N-
1513, 200 Constitution Avenue, NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Wendy M. McColough of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: This document contains a notice of pendency
before the Department of a proposed exemption to amend PTE 93-31, an
Underwriter Exemption. The Underwriter Exemptions are a group of
individual exemptions granted by the Department that provide
substantially identical relief from certain of the restrictions of
sections 406 and 407 of the Employee Retirement Income Security Act of
1974 (ERISA or the Act) and from the taxes imposed by sections 4975(a)
and (b) of the Internal Revenue Code of 1986, as amended (Code), by
reason of certain provisions of section 4975(c)(1) of the Code for the
operation of certain asset pool investment trusts and the acquisition,
holding, and disposition by Plans of certain asset-backed pass-through
certificates representing undivided interests in those investment
trusts.
All of the Underwriter Exemptions were amended by PTE 97-34, 62 FR
39021 (July 21, 1997), PTE 2000-58, 65 FR 67765 (November 13, 2000),
and PTE 2007-05, 72 FR 13130 (March 20, 2007), as corrected at 72 FR
16385 (April 4, 2007). Certain of the Underwriter Exemptions were
amended by PTE 2002-41, 67 FR 54487 (August 22, 2002).
The Department is proposing this amendment to PTE 93-31 pursuant to
section 408(a) of the Act and section 4975(c)(2) of the Code, and in
accordance with the procedures set forth in 29 CFR Part 2570, Subpart B
(55 FR 32836, 32847, August 10, 1990).\2\
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\2\ Section 102 of Reorganization Plan No. 4 of 1978 (5 U.S.C.
App. 1 [1996]) generally transferred the authority of the Secretary
of the Treasury to issue exemptions under section 4975(c)(2) of the
Code to the Secretary of Labor.
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1. The Underwriter Exemptions permit Plans to invest in pass-
through securities representing undivided interests in asset-backed or
mortgage-backed investment pools (Securities). The Securities generally
take the form of certificates issued by a trust (Trust). The
Underwriter Exemptions permit transactions involving a Trust, including
the servicing, management and operation of the Trust, and the sale,
exchange or transfer of Securities evidencing interests therein, in the
initial issuance of the Securities or in the secondary market for such
Securities (the Covered Transactions). The most recent amendment to the
Underwriter Exemptions is PTE 2007-05, 72 FR 13130 (March 20, 2007), as
corrected at 72 FR 16385 (April 4, 2007) (PTE 2007-05). One of the
General Conditions of the Underwriter Exemptions, as amended, requires
that the Trustee not be an ``Affiliate'' of any member of the
``Restricted Group'' other than an ``Underwriter.'' PTE 2007-05,
subsection II.A.(4). The term ``Restricted
[[Page 13577]]
Group'' is defined under section III.M. as: (1) Each Underwriter; (2)
Each Insurer; (3) The Sponsor; (4) The Trustee; (5) Each Servicer (6)
Any Obligor with respect to obligations or receivables included in the
Issuer constituting more than 5 percent of the aggregate unamortized
principal balance of the assets in the Issuer, determined on the date
of the initial issuance of Securities by the Issuer; (7) Each
counterparty in an Eligible Swap Agreement; or (8) Any Affiliate of a
person described in subsections III.M.(1)-(7).'' The term ``Servicer''
is defined to include ``any Subservicer.'' PTE 2007-05, section III.G.
The term ``Affiliate'' is defined, in part, to include ``(1) Any person
directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with such other
person; (2) Any officer, director, partner, employee * * * of such
other person; and (3) Any corporation or partnership of which such
other person is an officer, director or partner.'' PTE 2007-05, section
III.N.
2. On May 14, 1993, PTE 93-31 was granted to NationsBank
Corporation, a North Carolina corporation. Prior to September 25, 1998,
NationsBank (DE) Corporation, a Delaware corporation, was organized as
a wholly-owned subsidiary of NationsBank Corporation. On September 25,
1998, NationsBank Corporation merged into NationsBank (DE) Corporation
with NationsBank (DE) Corporation being the survivor. Each share of
NationsBank Corporation common stock was converted into a share of
NationsBank (DE) Corporation common stock and continued as the
outstanding stock after the merger. The assets owned by NationsBank
Corporation became the assets of NationsBank (DE) Corporation.
Simultaneously with this merger, NationsBank (DE) Corporation changed
its name to NationsBank Corporation. The sole purpose of this merger
was to reincorporate NationsBank Corporation as a Delaware corporation.
On September 30, 1998, BankAmerica Corporation, a Delaware corporation,
merged into NationsBank Corporation, with NationsBank Corporation being
the survivor. All outstanding shares of NationsBank Corporation common
stock continued to remain outstanding after the merger, and each share
of BankAmerica Corporation common stock was exchanged for 1.1316 shares
of NationsBank Corporation. Simultaneously with the September 30, 1998
merger, NationsBank Corporation changed its name to BankAmerica
Corporation. Thus, BankAmerica Corporation, formally known as
NationsBank Corporation, became owned by the former shareholders of
both NationsBank and BankAmerica Corporations, with the shareholders of
NationsBank Corporation owning the majority of the outstanding shares.
Based on these facts, in a letter dated November 25, 1998, the
Department confirmed that PTE 93-31 continued in effect and could be
used by the newly formed corporation, BankAmerica Corporation.
3. Bank of America, N.A. (Bank of America or the Applicant)
provides that on April 28, 1999, BankAmerica Corporation changed its
name to Bank of America Corporation and filed its Amended and Restated
Certificate of Incorporation with the Delaware Secretary of State. Bank
of America Corporation is the parent holding company of Bank of
America, N.A. Banc of America Securities, LLC is the U.S. investment
banking subsidiary of Bank of America Corporation. The Proposed
Amendment was requested by application dated September 25, 2007 and
updated on January 16, 2008, by Bank of America (the Application). The
Applicant states that on October 1, 2007, Bank of America Corporation
acquired ABN Amro North America Holding Company, the holding company of
LaSalle Bank Corporation (The Acquisition). LaSalle Bank, N.A.
(LaSalle) is a subsidiary of LaSalle Bank Corporation. LaSalle is the
Trustee in many Covered Transactions that include Bank of America. The
Acquisition caused certain transactions previously subject to PTE 93-31
or the Underwriter Exemption that is relied upon in the particular
transaction to fail to satisfy the requirement under the Underwriter
Exemptions that the Trustee not be an Affiliate of any member of the
Restricted Group other than an Underwriter. PTE 2007-05 subsection
II.A.(4). Currently, for transactions where Bank of America is the
Servicer, a six-month period is provided by the Underwriter Exemptions
to sever the affiliation between the Servicer and the Trustee if the
affiliation occurred after the initial issuance of the Securities. PTE
2007-05, subsection II.A.(4)(b). However, there is currently no
transitional relief under the Underwriter Exemptions where Bank of
America (as Banc of America Securities, LLC) is a Sponsor or a Swap
Counterparty and LaSalle is the Trustee. Accordingly, Bank of America
seeks a temporary amendment to PTE 93-31 to provide for a six-month
period for resolution of certain prohibited affiliations caused by the
Acquisition of LaSalle, the Trustee, by Bank of America.
In addition, the Applicant requests that the amendment provide
similar relief for certain Covered Transactions where LaSalle is
Trustee and Bank of America is a member of the Restricted Group, other
than the Underwriter. In those transactions, the Underwriter, who is
unrelated to Bank of America, relies upon an Underwriter Exemption
other than PTE 93-31. Citigroup Global Market, Inc., Deutsche Bank
Securities, and Goldman, Sachs & Co. have confirmed to the Applicant
that they have been notified of the application for the Proposed
Amendment and have agreed to coverage under the Proposed Amendment. In
its September 25, 2007 Application, Bank of America represented that
LaSalle placed a notice on its web pages for each of the Covered
Transactions affected by the Acquisition. The Applicant represented
that this notice would be updated upon publication of the Proposed
Amendment, and if granted, the amendment. Further, the web pages noted
the appointment of any co-trustee and the appointment of the
replacement trustee. The Applicant states that LaSalle, in its role of
Trustee, will bear the cost of appointing such co-trustee and that
there will be no financial impact on any Underwriter.
4. Bank of America represents that the Covered Transactions
affected by the Acquisition consist of 37 commercial or residential
mortgage-backed securitizations (CMBS or RMBS) (Securitizations) as
detailed at section III.KK of the Proposed Amendment (the
Securitizations List). Bank of America states that all of the
Securitizations were structured and are managed to meet the
requirements of PTE 93-31 or another substantially similar Underwriter
Exemption, in each case as amended by PTE 2007-05. LaSalle is the
Trustee in each of the Securitizations. The Applicant represents that,
in its role as Trustee, LaSalle is obligated under both the operative
documents that securitize the loans, and under state law relating to
fiduciaries, to protect the interests of security holders.
Specifically, the Trustee is required to enforce the rights of security
holders against other parties to the transaction, including Servicers,
Swap Counterparties and loan sellers. The Applicant notes further that
in practice, due to industry standards and reputation concerns by the
various parties, little such protection or enforcement is necessary,
and the Trustee's role, while vigilant, is relatively passive. Bank of
America is a party to each of the Securitizations in the capacity or
capacities detailed in the
[[Page 13578]]
Securitizations List. The Applicant states that, in any of these
capacities, Bank of America is obligated, under the operative documents
of the transaction, to perform its designated duties under contractual
and, in some cases, industry standards for the benefit of security
holders. The Applicant represents that each of the Pooling and
Servicing Agreements has been structured to comply with PTE 93-31 or a
substantially identical Underwriter Exemption, and that each of the
Trusts has been managed in accordance with the related Pooling and
Servicing Agreement. Consequently, Securities issued by each Trust
currently are eligible for purchase by Plans that meet the requirements
of PTE 93-31 or a substantially identical Underwriter Exemption.
5. The Applicant states that none of the Trusts were formed or
marketed with the knowledge that Bank of America and LaSalle would
become affiliated. Bank of America further states that once it became
aware of the Acquisition, it stopped using LaSalle as a Trustee on
securitization transactions. The Applicant notes that the
Securitization List contains only three transactions closed in 2007.
The Applicant states that, in general, the Pooling and Servicing
Agreements governing the applicable Securitizations permit the cures
detailed in their Application by contemplating a trustee's resignation
and replacement so as to comply with applicable law and providing the
Trustee the ability to appoint co-trustees and other agents authorized
to carry out the Trustees' duties. The Applicant notes that the
agreements do not provide specific qualifications for co-trustees.
While the agreements vary in the detail, after due diligence, the
Applicant asserts that it is not aware of any provisions of the
agreements or SEC requirements that preclude the cures detailed in the
Application.
6. Bank of America represents in its Application that during the
proposed six month resolution period, for each Securitization on the
Securitization List, the Trustee shall appoint a co-trustee, which is
not an Affiliate of Bank of America, no later than the earlier of (a)
January 2, 2008 or (b) five business days after LaSalle, the Trustee,
has become aware of a conflict between the Trustee and any member of
the Restricted Group that is an Affiliate of the Trustee. The co-
trustee will be solely responsible for resolving such conflict between
the Trustee and any member of the Restricted Group that has become an
Affiliate of the Trustee as a result of the Acquisition; provided that
if the Trustee has resigned on or prior to January 2, 2008, and no
event described in clause (b) has occurred, no co-trustee shall be
required since a replacement trustee would be in place by January 2,
2008. Bank of America represents that as Trustee, LaSalle will appoint
a co-trustee with the knowledge and skill necessary to resolve any
conflict arising between LaSalle and any Bank of America affiliated
member of the Restricted Group. In the event that a co-trustee were
appointed, such co-trustee would assume LaSalle's role under the
related Pooling and Servicing Agreement (solely with respect to any
conflict between LaSalle and a Bank of America affiliate that is a
member of the Restricted Group) until a replacement trustee replaced
LaSalle.
On January 16, 2008, the Applicant informed the Department that
LaSalle was replaced as Trustee in each Securitization on the
Securitization List as of January 2, 2008. Wells Fargo Bank, N.A. is
the replacement trustee for the majority of the Securitizations on the
Securitization List. U.S. Bank National Association is the replacement
trustee for the remaining Securitizations on the list. LaSalle
represents that there were no actual conflicts during the period of
affiliation, October 1, 2007 to January 2, 2008. Thus, no co-trustee
had to be appointed during that period.
For purposes of this Proposed Amendment, a conflict would arise
whenever (a) Bank of America is a member of the Restricted Group and
fails to perform in accordance with the timeframes contained in the
relevant Pooling and Servicing Agreement following a request for
performance from LaSalle, as Trustee, or (b) LaSalle, as Trustee, fails
to perform in accordance with the timeframes contained in the relevant
Pooling and Servicing Agreement following a request for performance
from Bank of America, a member of the Restricted Group. The time as of
which a conflict occurs is the earlier of the day immediately following
the last day on which compliance is required under the relevant Pooling
and Servicing Agreement; or the day on which a party affirmatively
responds that it will not comply with a request for performance.
Additionally, for purposes of this Proposed Amendment, the term
conflict includes but is not limited to, the following: (1) Bank of
America's failure, as Sponsor, to repurchase a loan for breach of
representation within the time period prescribed in the relevant
Pooling and Servicing Agreement, following LaSalle's request, as
Trustee, for performance; (2) Bank of America, as Sponsor, notifies
LaSalle, as Trustee, that it will not repurchase a loan for breach of
representation, following LaSalle's request that Bank of America
repurchase such loan within the time period prescribed in the relevant
Pooling and Servicing Agreement (the notification occurs prior to the
expiration of the prescribed time period for the repurchase); and (3)
Bank of America, as Swap Counterparty, makes or requests a payment
based on a value of LIBOR \3\ that LaSalle, as Trustee, considers
erroneous.
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\3\ The London Interbank Offered Rate.
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7. In Bank of America's September 25, 2007 application to the
Department, the Applicant represented that it and LaSalle were
currently identifying replacement trustees to replace LaSalle as
Trustee in approximately 60 transactions (this number includes
transactions where the conflict is not ERISA-related and the
transaction is not on the Securitization List). The Applicant's intent
was to complete the negotiations and paperwork for approximately 20
transactions per month, with the effective date for all changes to be
January 2, 2008. This date was convenient for non-ERISA reasons
primarily relating to tax and securities law reporting.
The Applicant further represented that, in contrast to co-trustees,
any replacement trustee will have to meet the requirements of the
related Pooling and Servicing Agreement for qualification as a Trustee.
A copy of a typical Pooling and Servicing Agreement requirements for a
trustee was provided to the Department. In the September 25, 2007
application, Bank of America stated that it and LaSalle were in the
process of making arrangements for hiring such replacement trustees,
with all such appointments scheduled to be effective on January 2,
2008. The Applicant noted that if a conflict were to arise prior to
January 2, 2008 with respect to any Trust, it would be likely that the
party that would become the replacement trustee (and hence meets the
requirements of the related Pooling and Servicing Agreement for
qualification as a Trustee) would be appointed co-trustee under the
terms of the Proposed Amendment. The Applicant stated, however, that
there might be situations where appointment of the future replacement
trustee would be impossible or impractical, in which case the parties
would have to appoint a different co-trustee until the replacement
trustee assumed its role.
The Applicant stated that while Wells Fargo is the replacement
trustee of choice, there are transactions where Wells Fargo is a member
of the
[[Page 13579]]
Restricted Group and consequently cannot be named Trustee. Bank of
America noted that, in certain cases, LaSalle will continue as a
securities administrator, retaining certain reporting requirements but
be responsible to the replacement trustee. The replacement trustee will
have legal title to the assets of the trust, will have fiduciary
responsibility to the securities holders and will be responsible for
supervising LaSalle in whatever role it retains.
8. Bank of America represents that, as of January 16, 2008, there
was no outstanding conflict requiring resolution involving LaSalle and
any Bank of America entity involved in the transactions listed in the
Securitizations List. Further, Bank of America stated that it would
notify the Department of Labor of any conflict that arose prior to the
replacement of LaSalle as Trustee in any of these transactions. Bank of
America notified the Department on January 16, 2008 that LaSalle was
replaced as Trustee for each of the transactions on the Securitization
List. The Applicant notes that, as a technical matter, in the most
likely case (e.g. the assertion of a breach of representation or
warranty by the Sponsor), the Pooling and Servicing Agreements all
require that the Trustee provide the offending party 90 days to cure
the issue before the Trustee may take any action to do so itself.
Consequently, if an issue would have arisen after October 1, 2007; the
Trustee would not have been able to take any action to cure the issue
until after January 2, 2008. Since the Trustee replacements were made
on January 2, 2008, LaSalle was replaced by a non-affiliated trustee
before it could have taken any action.
9. The Applicant notes that Plans acquired Securities issued under
the Securitizations in reliance on the exemptive relief provided by the
Underwriter Exemptions. Absent additional relief, the Acquisition has
caused these granted exemptions to cease to apply to several of the
Securitizations. Bank of America represents that the Securities issued
in transactions such as the Securitizations are attractive investments
for Plans subject to Title I of ERISA or section 4975 of the Code and
conversely, such plans are an important market for issuers of such
Securities. Bank of America asserts that to force LaSalle to resign as
Trustee in all of the Securitizations before the Acquisition was not
administratively feasible because the number of available trustees is
limited and there is work required in changing trustees. Similarly, to
have the exemptions no longer apply to the Securitizations would force
the Plans to sell their securities in the current unstable market,
likely at a loss. The Applicant additionally notes that although the
Acquisition has been widely covered, it is conceivable that Plan
fiduciaries would not realize that the Underwriter Exemption relied
upon by the Plans had ceased to apply, raising the possibility that a
Plan would not sell and that non-exempt prohibited transactions would
occur.
10. Bank of America states that the Plans purchased Securities in
reliance on PTE 93-31 or a substantially identical exemption. At that
time, the Plans had no knowledge that the Trustee would become an
Affiliate of one or more members of the Restricted Group. On or after
the Acquisition, except in cases covered by PTE 93-31 as amended by PTE
2000-58 (providing a six-month window for Trustee-Servicer
affiliations) or PTE 2002-41 (Trustee-Underwriter affiliations), the
purchased Securities would no longer be afforded coverage under the
Underwriter Exemptions and the Plans would have been obligated to sell
the Securities prior to October 1, 2007. The Applicant asserts that
this is problematic for several reasons. First, as is customary for
such transactions, the physical securities are not used in most cases.
Rather, an electronic system, usually the Depository Trust Company's
electronic system, is utilized and the securities are in global form.
In such cases, it is difficult (and may be impossible) to ascertain the
beneficial ownership of the securities, meaning that it is not known
whether Plans are owners and to what extent. The Applicant asserts that
identifying the affected Plans would be time consuming and expensive,
and may be impossible to do with complete accuracy because of the book-
entry system under which Securities were issued. As stated above, the
Applicant represents that notice of this request for relief was posted
on the Trustee's Web site at the time this Application was submitted,
which would be updated to reflect any action of the Department with
respect to the Application. The Applicant has informed the Department
that, although LaSalle was replaced as Trustee on January 2, 2008,
LaSalle will remain as the Securities Administrator for each of the
Securitizations on the Securitization List and LaSalle will continue to
update its Web site concerning the status of the Proposed Amendment. In
this regard, the Applicant also requests that the publication of the
Proposed Amendment in the Federal Register serve as the Notice to
Interested Persons for purposes of this submission.
Second, and more importantly, the current disruption in the
mortgage-backed securities market makes sales problematic, both in
terms of finding buyers and establishing proper valuation. Granting the
requested relief prevents these problems. The Applicant states further
that the relief is of the same duration, six months, as that already
provided by the Department for Trustee-Servicer affiliations,
suggesting that the Department has already determined that this period
is sufficiently brief to prevent serious conflicts of interest from
arising.
11. Bank of America requests that the relief, if granted, be made
retroactive to the October 1, 2007 Acquisition date. If the relief is
granted retroactively, Plans would be able to retain their prior
Securitization investments and to purchase Securities in the secondary
market relying upon the Underwriter Exemptions once exemptive relief is
granted, even if the transactions originally closed or will close prior
to the date the final Amendment is published in the Federal Register,
if granted by the Department.
General Information
The attention of interested persons is directed to the following:
1. The fact that a transaction is the subject of an exemption under
section 408(a) of the Act and section 4975(c)(2) of the Code does not
relieve a fiduciary or other party in interest or disqualified person
from certain other provisions of the Act and the Code, including any
prohibited transaction provisions to which the exemption does not apply
and the general fiduciary responsibility provisions of section 404 of
the Act, which require, among other things, a fiduciary to discharge
his or her duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirements of section 401(a) of the Code that the plan operate for
the exclusive benefit of the employees of the employer maintaining the
plan and their beneficiaries;
2. Before an exemption can be granted under section 408(a) of the
Act and section 4975(c)(2) of the Code, the Department must find that
the exemption is administratively feasible, in the interest of the
plans and of their participants and beneficiaries and protective of the
rights of participants and beneficiaries of the plans; and
3. The proposed amendment, if granted, will be supplemental to, and
[[Page 13580]]
not in derogation of, any other provisions of the Act and/or the Code,
including statutory or administrative exemptions and transitional
rules. Furthermore, the fact that a transaction is subject to an
administrative or statutory exemption is not dispositive of whether the
transaction is in fact a prohibited transaction.
Written Comments and Hearing Requests
All interested persons are invited to submit written comments or
requests for a hearing on the pending amendment to the address above,
within the time frame set forth above, after the publication of this
proposed amendment in the Federal Register. All comments will be made a
part of the record. Comments received will be available for public
inspection with the Application at the address set forth above.
Proposed Exemption
Based on the facts and representations set forth in the
application, under the authority of section 408(a) of the Act and
section 4975(c)(2) of the Code and in accordance with the procedures
set forth in 29 CFR part 2570, subpart B (55 FR 32836, August 10,
1990), the Department proposes to modify Prohibited Transaction
Exemption (PTE) PTE 93-31, 58 FR 28620 (May 5, 1993); as subsequently
amended by PTE 97-34, 62 FR 39021 (July 21, 1997), PTE 2000-58, 65 FR
67765 (November 13, 2000), PTE 2002-41, 67 FR 54487 (August 22, 2002)
and PTE 2007-05, 72 FR 13130 (March 20, 2007) (PTE 93-31).
1. Subsection II.A.(4) of PTE 93-31 is amended to add a new
subsection (c) that reads as follows:
(c) Effective October 1, 2007 through April 1, 2008, LaSalle
Bank, N.A., the Trustee, shall not be considered to be an Affiliate
of any member of the Restricted Group solely as the result of the
acquisition of ABN Amro North America Holding Company, the holding
company of LaSalle Bank Corporation and its subsidiary, LaSalle
Bank, N.A. (LaSalle) by Bank of America Corporation and its
subsidiaries (Bank of America) (the Acquisition), which occurred
after the initial issuance of the Securities, provided that:
(i) The Trustee, LaSalle, ceases to be an Affiliate of any
member of the Restricted Group no later than April 1, 2008;
(ii) Any member of the Restricted Group that is an Affiliate of
the Trustee, LaSalle, did not breach any of its obligations under
the Pooling and Servicing Agreement, unless such breach was
immaterial and timely cured in accordance with the terms of such
agreement, during the period from October 1, 2007 through the date
the member of the Restricted Group ceased to be an Affiliate of the
Trustee, LaSalle; and
(iii) In accordance with each Pooling and Servicing Agreement,
the Trustee, LaSalle, appoints a co-trustee, which is not an
Affiliate of Bank of America, no later than the earlier of (A)
January 2, 2008 or (B) five business days after LaSalle becomes
aware of a conflict between the Trustee and any member of the
Restricted Group that is an Affiliate of the Trustee. The co-trustee
will be responsible for resolving any conflict between the Trustee
and any member of the Restricted Group that has become an Affiliate
of the Trustee as a result of the Acquisition; provided, that if the
Trustee has resigned on or prior to January 2, 2008 and no event
described in clause (B) has occurred, no co-trustee shall be
required.
(iv) For purposes of this subsection II.A.(4)(c), a conflict
arises whenever (A) Bank of America, as a member of the Restricted
Group, fails to perform in accordance with the timeframes contained
in the relevant Pooling and Servicing Agreement following a request
for performance from LaSalle, as Trustee, or (B) LaSalle, as
Trustee, fails to perform in accordance with the timeframes
contained in the relevant Pooling and Servicing Agreement following
a request for performance from Bank of America, a member of the
Restricted Group.
The time as of which a conflict occurs is the earlier of: the
day immediately following the last day on which compliance is
required under the relevant Pooling and Servicing Agreement; or the
day on which a party affirmatively responds that it will not comply
with a request for performance.
For purposes of this subsection II.A.(4)(c), the term
``conflict'' includes but is not limited to, the following: (1) Bank
of America's failure, as Sponsor, to repurchase a loan for breach of
representation within the time period prescribed in the relevant
Pooling and Servicing Agreement, following LaSalle's request, as
Trustee, for performance; (2) Bank of America, as Sponsor, notifies
LaSalle, as Trustee, that it will not repurchase a loan for breach
of representation, following LaSalle's request that Bank of America
repurchase such loan within the time period prescribed in the
relevant Pooling and Servicing Agreement (the notification occurs
prior to the expiration of the prescribed time period for the
repurchase); and (3) Bank of America, as Swap Counterparty, makes or
requests a payment based on a value of the London Interbank Offered
Rate (LIBOR) that LaSalle, as Trustee, considers erroneous.
2. The Definition of ``Underwriter'' at section III.C. of PTE 93-31
is temporarily replaced with a definition that includes other entities
and reads:
C. Effective October 1, 2007 through April 1, 2008,
``Underwriter'' means:
(1) Bank of America Securities, LLC, or an entity identified as
an underwriter on the Securitization List at section III.KK. (i.e.,
Citigroup Global Market, Inc., Deutsche Bank Securities, and
Goldman, Sachs & Co.);
(2) Any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control
with such entities; or
(3) Any member of an underwriting syndicate or selling group of
which such firm or person described in subsections III.C.(1) or (2)
is a manager or co-manager with respect to the Securities.
3. The Definition of ``Sponsor'' at section III.D. of PTE 93-31 is
temporarily extended to include language applicable to transactions on
the Securitization List at section III.KK and reads:
D. ``Sponsor'' means:
(1) The entity that organizes an Issuer by depositing
obligations therein in exchange for Securities; or
(2) Effective October 1, 2007 through April 1, 2008, for those
transactions listed on the Securitization List at section III.KK.,
Bank of America.
4. Section III of PTE 93-31 is temporarily amended to add a new
section III.KK that reads as follows:
KK. Effective October 1, 2007 through April 1, 2008,
``Securitization List'' means:
----------------------------------------------------------------------------------------------------------------
Name and exemption Issuance type BofA role
----------------------------------------------------------------------------------------------------------------
Banc of America Comm. Mtge. 2001-PB1, 93- C.............................. U, S, SC, SER.
31.
Banc of America Comm. Mtge. 2004-2, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2004-4, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2004-6, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2005-2, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2005-3, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2005-5, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2005-6, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2006-2, 93- C.............................. U, S, SER.
31.
Banc of America Comm. Mtge. 2006-5, 93- C.............................. U, S, SER.
31.
[[Page 13581]]
Banc of America Comm. Mtge. 2007-1, 93- C.............................. U, S, SER.
31.
Banc of America Large Loan 2006-BIX1, 93- C.............................. U, S, SER.
31.
Banc of America Large Loan 2004-BBA4, 93- C.............................. U, S, SER.
31.
Banc of America Large Loan 2005-BBA6, 93- C.............................. U, S.
31.
Bank of America Struct. Notes 2002-X1, C.............................. U, S, SC, SER.
93-31.
Bear Stearns Series 2004-BBA3, 93-31.... C.............................. U, S, SER.
Bear Stearns Series 2007-BBA8, 93-31.... C.............................. U, S, SER.
Citigroup Commercial Mtg. 2006-FL2, 89- C.............................. S, SER.
89 (Citigroup Global).
COMM Series 2006-FL12, 97-03E (Deutsche C.............................. S, SER.
Bank).
COMM Series 2007-FL14, 97-03E (Deutsche C.............................. S, SER.
Bank).
COMM Series 2001[dash]J2, 93-31......... C.............................. U, S, SC, SER.
COMM 2006-C8, 97-03E (Deutsche Bank).... C.............................. U, S, SER.
GE Capital Comm Mtge. Corp. 2002-2, 93- C.............................. U, S, SER.
31.
GE Capital Comm Mtge. Corp. 2003-C2, 93- C.............................. U, S, SER.
31.
GE Capital Comm Mtge. Corp. 2004-C2, 93- C.............................. U, S, SER.
31.
GE Capital Comm Mtge. Corp. 2005-C1, 93- C.............................. U, S, SER.
31.
GE Capital Comm Mtge. Corp. 2005-C3, 93- C.............................. U, S, SER.
31.
GE Capital Comm Mtge. Corp. 2006-C1, 93- C.............................. U, S, SER.
31.
GS Mortgage Sec. 2004-GG2, 89-88 C.............................. S.
(Goldman, Sachs).
Merrill Lynch Series 2004-BPC1, 93-31... C.............................. U, S, SER.
Merrill Lynch Series 2005-MKB2, 93-31... C.............................. U, S, SER.
Mortgage Cap. Funding 1996-MC2, 93-31... C.............................. U, S.
Mortgage Cap. Funding 1997-MC2, 93-31... C.............................. U, S.
NationsLink Funding Corp. 1999-LTL-1, 93- C.............................. U, S, SER.
31.
NationsLink Funding Corp. 1999-SL, 93-31 C.............................. U, S, SER.
Asset Backed Funding Corp. 2002-SB1, 93- R.............................. U, S.
31.
C-BASS 2007-CBS, 93-31.................. R.............................. U, S.
----------------------------------------------------------------------------------------------------------------
Legend: C = Commercial mortgage-backed securitizations.
R = Residential mortgage-backed securitizations.
U = Underwriter.
S = Sponsor.
SC = Swap Counterparty.
SER = Servicer.
The availability of this amendment, if granted, is subject to the
express condition that the material facts and representations contained
in the Application are true and complete and accurately describe all
material terms of the transactions. In the case of continuing
transactions, if any of the material facts or representations described
in the Application change, the amendment will cease to apply as of the
date of such change. In the event of any such change, an application
for a new amendment must be made to the Department.
Signed at Washington, DC this 7th day of March, 2008.
Ivan L. Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E8-4980 Filed 3-12-08; 8:45 am]
BILLING CODE 4510-29-P
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