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January 10, 2005
Via Facsimile (212) 878-8375 and U.S. Mail
Kathleen L. Werner, Esq.
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
RE: iStar Financial inc.
Form S-4 filed December 10, 2004
File No. 333-121174
Dear Ms. Werner:
We have the following comments on the above-referenced
filings. Please note that we limited our review to the terms and
descriptions of the offers. We did not and will not review the financial
information included in, or incorporated by reference into, the
documents.
General
1. Currently, your document does not disclose the expiration dates
of the consent solicitation and exchange offers. As a result, please
advise us how much time will remain in the offers following the
consent payment deadline. We may have further comment upon review
of your response.
2. Please advise us how long you intend to keep the consent period
open initially.
3. Supplementally inform us whether the TriNet notes trade based
on a spread over U.S. Treasuries and whether the notes are liquid
(based on value and number of market makers).
4. Where appropriate, provide disclosure clarifying that you may
not irrevocably execute the consents prior to the expiration date. If
the offer is terminated without acceptance of the securities,
holders must be returned to their original position. See Rule 14(e)-1(c).
Prospectus Cover page
5. Please note that the expiration date of the offering is not
Rule 430A information. Prior to effectiveness, fill in the blank date
or specifically state on the cover page and elsewhere that the offers
will terminate a certain number of days (e.g. 30 days) after
effectiveness of the registration statement. In addition, confirm
on a supplemental basis that the offers will be open for a full
twenty business days.
Forward-Looking Statements, page ii
6. Statements made in connection with tender offers are
specifically excluded from the safe harbor protections of the Private
Securities Litigation Reform Act of 1995. See Section 21E(b)(2)(C) of the
Securities Exchange Act of 1934 and Regulation M-A telephone
interpretation M.2 available at www.sec.gov in the July 2001
Supplement to the Division of Corporation Finance`s Manual of
Publicly Available Telephone Interpretations. We note your
reference to "forward-looking statements within the meaning of Section 27A
Of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934" in your press releases dated February 22 and March 5,
2002. Please do not refer to the safe harbor provisions in any
future press releases or other communications relating to the
exchange offer.
7. Delete the statement that you assume no obligation to update
forward-looking information. In the alternative, explain how this
position is consonant with your disclosure obligations.
Risk Factors, page 12
8. Include a prominent risk factor discussing the potentially
taxable nature of the exchange.
The Exchange Offer and Consent Solicitation, page 22
Purpose of This Exchange Offer and Consent Solicitation, page
22
9. Quantify the cost and time savings represented by the cessation
of TriNet`s reporting obligations.
Terms of this Exchange Offer and Consent Solicitation,
page 22
10. We note that consenting to the proposed amendments to the
indenture, including the deletion of various indenture covenants,
is a condition to tendering in the offers. Please confirm, if true,
that following the offer, the changes in the covenants should not
have a material impact on the trading value of the remaining notes
not tendered in the offers.
11. Please disclose that a change in the consent payments would
require that you extend the offering periods so that ten business
days remain in the offers. See Rule 14e-1(b).
12. Refer to your statement that you will extend the exchange and
consent deadline "to the extent required by law" upon the
occurrence of a material change. Please revise to explain the amount of time
by which you may be required to extend the consent period. In
addition, describe the process by which you will notify security holders of
any extensions. See Rule 14e-1(d).
13. Supplementally advise how you intend to inform security holder
when you receive sufficient consents to revise the terms of the
indenture and how long the offer will remain open after you make
such an announcement.
14. In addition, it is our view that, depending on the changes
made, you may be required to file a post-effective amendment to the
registration statement.
15. We note your statement that you expect to "enter into a
supplemental indenture giving effect to the proposed amendments on
the consent date, and thereafter you will not be permitted to
withdraw the Trinet Notes you tender." It is unclear whether the
notes you are referring to are notes tendered prior to or after
the supplemental indenture is executed. If you are referring to notes
tendered after you enter in the supplemental indenture, please
reconcile this disclosure with your disclosure on the top of page
31 that "if you tender your TriNet Notes after the consent date, you
may validly withdraw TriNets Notes that you tender any time prior to
12:00 midnight, New York City time on the expiration date." If
you are referring to notes tendered prior to the consent date, then,
here and elsewhere as appropriate, revise to clarify that these note
holders will not be able to withdraw their tenders during the
period between the consent payment deadline and the expiration date
though the company will retain the right to amend the offer (including
waiving a material condition) after the consent date.
Conditions to the Completion of the Exchange Offers, page 25
16. You state in the second paragraph that you may terminate or
amend the offers if any of the various conditions occur "prior to
acceptance of the TriNet Notes." All conditions to the offer,
other than those dependent upon receipt of necessary government
approvals, must be satisfied or waived before the expiration of the offer.
As you know, the date of acceptance is not the same as the expiration
date. Please revise this and any similar disclosure accordingly.
For example, make corresponding changes in the first sentence of
the second full paragraph on page 26 and in instruction 9 of the
letter of transmittal.
17. We believe that a tender offer may be conditioned on a variety
of events and circumstances, provided that they are not within the
direct or indirect control of the bidder, and are drafted with
sufficient specificity to allow for objective verification that
the conditions have been satisfied. In this regard, revise the
subpart (e) to exclude actions or omissions to act by the company as a
reason for the assertion of a condition.
18. See comment 16 above. You state in the last paragraph that you
may assert or waive any of the conditions to the offers "at any
time," which suggests that conditions to the offer may be raised
or asserted after expiration of the offer. Please revise to make
clear that all conditions to the offer, other than those dependent upon
receipt of necessary government approvals, must be satisfied or
waived before the expiration of the offers.
19. We note your statement that the failure to exercise a right
will not be deemed a waiver of that right. This language suggests that
once a condition is triggered, you will make a secondary
determination as to whether to proceed with the tender offer.
Please note that when a condition is triggered and an offeror decides to
proceed with the offer anyway, we believe that this decision
constitutes a waiver of the triggered condition(s). As you are
aware, the waiver of a material offer condition may require an extension
of the offer, as well as filing of an amendment and dissemination of
additional offer materials. Please confirm to us supplementally
the issuer will not rely on this language to tacitly waive a condition
of the offer by failing to expressly assert it.
Expiration Date; Extension; Termination, page 26
20. Clarify how you will announce an extension of the offer. See
Rule 14e-1(d).
21. We note the second and fourth bullet points on page 27
reserving, respectively, the right to terminate the offer and the ability to
refuse to accept tendered notes. By reserving the absolute right
to reject all tendered notes without setting out any objective
criteria by which you will make this decision, the offer appears to be
illusory. Please advise or revise your document so note holders
can objectively verify the bases upon which you may terminate the
offers.
Certain U.S. Federal Income Tax Consequences, page 67
22. Rather than refer to "certain" tax consequences in your
heading and the disclosure that follows, please refer to "material" tax
consequences.
23. We note your exhibit 8.1 does not address the tax consequences
of the exchange. Please file an opinion addressing the consequences
discussed in this section. If you intend to file a short-form tax
opinion as an exhibit, please take into consideration the
following guidelines on the filing of short-form tax opinions:
* In the tax discussion section of the prospectus, you must
identify counsel who has rendered the opinion and clearly state that the
discussion is the named counsel`s opinion. Delete all references
to the discussion being a summary or general discussion.
* Clearly identify upon what counsel is opining. For example, is
counsel opining upon the issue price of the new notes, whether the
new notes will be treated as original issue discount or contingent
payment debt and whether there will be deemed exchange of the old
notes if the indentures are amended?
* In the short-form opinion filed as an exhibit, counsel must
state that its opinion is set forth in the tax discussion section and
that counsel confirms its opinion as set forth that section of the
document. Counsel must also consent to being named in the tax
discussion section and the legal matters section. Furthermore, if
the opinion states that counsel has no obligation to update its
opinion, then clarify that the opinion speaks through the date of
effectiveness of the registration statement. Counsel can do this
through disclosure or by filing another opinion dated the date of
effectiveness.
24. We note several statements that particular tax matters are not
free from doubt. If counsel cannot give an unqualified opinion,
please explain why. Describe the degree of uncertainty and
discuss the alternative consequences. Furthermore, provide risk factor
and/or other appropriate disclosure setting forth the risks to
security holders.
Closing Information
As appropriate, please amend your documents in response to
these comments. You may wish to provide us with marked copies of
the amendment, if required, to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please file
your cover letter on EDGAR. Please understand that we may have
additional comments after reviewing your amendment and responses
to our comments. In addition, depending upon your response to these
comments, a supplement may need to be sent to security holders.
In connection with responding to our comments, please
provide, in writing, a statement from all filing persons acknowledging
that:
* you are responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* you may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please direct any questions to me at (202) 942-1976. You
may also contact me via facsimile at (202) 942-9638. Please send all
correspondence to us at the following ZIP code: 20549-0303.
Sincerely,
Michael Pressman
Office of Mergers
and Acquisitions