Paul E. Glotzer, Esq. 

BOARO Of GOVERNORS 

OF THE 

FEDERAL RESERVE SYSTEM 

WASHINGTON, 0.1:.20551 

Cleary Gottlieb Steen & Hamilton LLP 

One Liberty Plaza 

New York, New York 10006-1470 

Dear Mr. Glotzer: 

ADORess OFFICIAL OORRESPONDENCE 

TO THE BOARe 

May 28, 2009 

This responds to your letter dated July 16, 2008, and subsequent 

correspondence on behalf ofBNP Paribas ("BNP"), Paris, France, requesting an 

extension of time for BNP to hold its investment in Citrus Holdings, Inc, and its 

subsidiaries (collectively, "Citrus Holdings"), Plaquemines Parish, Louisiana. 

BNP, a foreign bank that has made an effective election to become a financial 

holding company ("FHC"), currently holds Citrus Holdings as a merchant banking 

investment under section 4(k)( 4)(H) of the Bank Holding Company Act ("BHC 

Act") and Subpart J of the Board's Regulation Y.l 

Under the merchant banking rules, an FHC generally is permitted to 

make, as part of a bona fide underwriting or investment or merchant banking 

activity, an investment in a nonbanking company or other entity that is engaged in 

an activity not otherwise authorized for an FHC under section 4 of the BHC Act. 

In general, an FHC may hold a merchant banking investment (other than one held 

in or through a qualifying private equity fund) for no more than 10 years2 but is not 

pennitted to routinely manage or operate the investment.) The rules also provide 

for granting an extension of this period if necessary to enable the sale or 

disposition of the investment on a reasonable basis consistent with the financial 

viability of the FHC's merchant banking investment activities.4 BNP's holding 

period for Citrus Holdings will expire on - _ , and BNP has requested 

an extension of time to hold this investment. S 

1 See 12 U.S.C. §1843(k)(4)(H); 12 CFR225.171Jtl~. 

2 12 CFR22S.172(b)(I). . 

3 ~ 12 CFR22S.171. 

4 See 12 CFR225.l72(b)(S). 5-
-2-

BNP has submitted to the Board the information required by 12 CFR 

225 .172(b)( 4). The Board has considered all the information provided, including 

BNP's average holding period for its merchant banking investments. The record in 

this case shows that BNP has undertaken good faith efforts to divest its investment 

in Citrus Holdings within the 10-year holding period set forth in 12 CFR 

225 .172(b)(1). BNP has substantially reduced the nonfinancial holdings of Citrus 

Holdings and continues to market the company's remaining nonfmancial assets for 

possible sale. BNP has represented that it has held this investment in conformity 

with the requirements of the merchant banking rules and has otherwise complied 

with the requirements of those rules, including the restrictions on routine 

management and operation. 

Based on the foregoing and all the facts of record, the Board has granted 

BNP - - . _ .~ .. to hold its investment in 

Citrus Holdings under, and in accordance with, the merchant banking provisions of 

the BHC Act and the Board's Regulation Y. The Board's action is based on the 

facts and representations set forth in BNP' s request for the extension and related 

correspondence. Any change in the facts presented could result in a different 

conclusion and should be reported immediately to Board staff. 

Sincerely yours, 

Robert de V. Frierson 

Deputy Secretary of the Board 

cc: Ivan Hurwitz, Vice President 

Federal Reserve Bank of New York 

William Mark, Lead Examiner 

Federal Reserve Bank of Chicago