Question
From: (redacted)
Sent: Wednesday, February 13, 2008 12:03 PM
To: Verne, B. Michael
Subject: HSR Exemption
DearMr. Verne:
I wouldappreciate your confirming or correcting the following analysis of a filingissue:
Institutional Investor I is already a shareholder inan REIT and wishes to purchase additional shares. The total value of theinvestment following the purchase of the additional shares (which would closebefore the effective date of the new amended thresholds) would exceed theexisting $59.8 million threshold but not the soon-to-be-effective $63.1 millionthreshold. The investment would also exceed the limitations in 802.64(b)(4).
The REIT has been formed solely to purchaseresidential mortgages, the direct acquisition of which would be exempt undersection 7A (c)(2) of the HSR Act. Under section 802.4(a) of the regulations, aslong as the REIT and all entities it controls do not collectively holdnon-exempt assets with an aggregate fair market value of more than $63.1million.
Accordingly, the purchase of additional shares in theREIT should be exempt as long as the REIT and the entities it controls do not hold more than $63.1 million of non-exemptassets. Please advise if you concur. Thank you.