15.  Plaintiff brings this action on behalf of itself and as a class action under Rules  23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, seeking relief on behalf of the  following class (the “Class”):   All persons or entities who purchased or sold SSA bonds in the  secondary market directly from Defendants in the United States  from at least as early as January 1, 2005 through the present (the  “Class Period”).  Excluded from the Class are Defendants, their  employees, parent companies, subsidiaries and affiliates, any co- conspirators, whether or not named in this Complaint, and all  federal governmental entities.    16.  The Class is so numerous and geographically dispersed that joinder of all  members is impracticable. Plaintiff believes that thousands of individuals and entities transacted  in SSA bonds directly with Defendants during the Class Period.    17.  Plaintiff’s claims are typical of the claims of the other Class Members because  they all sustained damages arising out of Defendants’ common course of conduct in violation of  the law as described in this Complaint.  The injuries and damages of each Class Member were  directly caused by Defendants’ wrongful conduct.    18.  Plaintiff will fairly and adequately represent and protect the interests of the Class.  Plaintiff is an adequate representative of the Class and has no interests adverse to the interests of  absent Class Members.     19.  Plaintiff is represented by counsel who is competent and experienced in class  action litigation, including antitrust class action litigation.    53.  Much like the U.S. Treasury borrows money by issuing bonds, supranational  organizations, sub-sovereign entities, and government agencies issue bonds to raise capital.    54.  “Supranational debt” is debt issued by supranational organizations – entities  created as a result of collaboration between foreign governments to serve a particular purpose.  Supranational debt includes debt issued by the European Investment Bank (“EIB”); the  International Finance Corporation (“IFC”), a member of the World Bank group; and the Asian  Development Bank (“ADB”).5    55.  Debt issued by national governments is called “sovereign debt.”  Examples of  sovereign debt include U.S. Treasury bills, notes, and bonds; French OATs (Obligations  Assimilables du Tresor); and German Bunds.    56.  Debt issued by political subdivisions within a country is called “sub-sovereign  debt.”  Examples include debt issued by Canadian provinces or German states (Landers).   58.  Sub-sovereign and agency entities typically issue bonds in their local currency.  However, these SSA bond issuers can and do issue debt in other currencies under certain  circumstances, including the following:   (a)  SSA bond issuers may seek to take advantage of lower borrowing costs. For  example, European SSA bond issuers may issue bonds in U.S. dollars because of lower costs  associated with borrowing in U.S. dollars compared to borrowing in Euros.   (b)  Issuers may issue SSA bonds in U.S. dollars to diversify their investor base to  include a broader number of U.S. investors.   (c)  Volatility in a local currency, which can lead to devaluation of the SSA bonds  issued in that currency, may encourage an entity to issue debt in currencies with more stability  (whether perceived or real). For example, if the Japanese government prints more Japanese yen,  i.e., increasing the money supply, in order to meet existing national debt obligations, the  Japanese yen becomes less valuable relative to other currencies. This devaluation of the yen  impacts investors of yen-denominated SSA bonds by potentially causing them to lose money in  real terms, i.e., relative to having invested in debt denominated in a different currency. Thus, to  reduce this risk and attract a larger and broader base of investors, an entity may issue debt in  other, less volatile currencies.    60.  Banks, including Defendants, compete with each other to provide underwriting  services for SSA bonds. An important criterion in an issuer’s selection of an underwriter is the  bank’s ability to provide liquidity in the secondary market.  For example, an EIB official stated  that “[l]ike all responsible issuers, we too monitor our secondary market liquidity and turnover.   In other words, we also monitor trading performance of dealers.”7  A former trader at one of the  bank Defendants acknowledged: “Issuers conduct empirical measurements and publish a chart.   They use these charts to award business . . . . So say, you are bank Z, you will get told by the  issuer where you rank on that chart to incentivize you to do more secondary business.”8  Thus,  issuers often favor those banks with a proven track record of providing liquidity in the secondary  market.   B.   Pricing of SSA Bonds    61.  Similar to other bonds, the prices of SSA bonds are stated in terms of the bond’s  par value, coupon, and maturity date.  A bond’s par value is its face value, payable on the bond’s  maturity date.  A bond’s coupon is the interest rate that the bond issuer must pay an investor.  Coupons are paid to the bond-holder periodically – usually every 6 months, although that can  vary – until the bond reaches maturity.    63.  A bond’s attractiveness can also be stated in terms of its yield.  Yield is a figure  that shows the return that an investor receives by holding the bond to maturity.  Bond price and  yield have an inverse relationship: lowering one will result in a rise in the other.    64.  This inverse relationship is due to the fact that a bond’s price will be higher when  it pays a coupon that is higher than prevailing interest rates.  As market interest rates increase,  bond prices decrease.  Because yield takes into account both a bond’s coupon and its price, yield  can be an effective means to compare bonds with different coupons and prices.    65.  As a result of their relative safety, SSA bonds usually trade at a price that is  comparable to sovereign debt.  In industry parlance, the price spread between SSA bonds and  sovereign debt is known as a “safe spread” – i.e., the incremental yield over the sovereign debt  counterpart but with the potential for minimal additional credit risk.    66.  The risk premium associated with SSA bonds over their sovereign bond  counterparts can depend on a number of factors, including the level of credit risk associated with  the guarantor; the level of political risk faced by the issuer; and the level of inherent liquidity  risk, which itself is determined with respect to the tenor, size, and currency mix of the SSA  bonds.   C.   Resale of SSA Bonds in the Secondary Market    68.  Customers seeking to purchase or sell SSA bonds will contact one or more banks,  such as Defendants (or a broker who then contacts one of the Defendants), and request pricing  for a particular SSA bond.  The bank will quote the price for an SSA bond in terms of a “bid”  price or an “ask” price.  The bid price represents the maximum price at which a dealer will  purchase the SSA bond; the ask price represents the minimum price at which a dealer will sell  the SSA bond.  The difference between these two values is the “bid-ask spread” (or “spread”),  which reflects the dealer’s profit for acting as a market maker and assuming the risk that it may  be unable to purchase or sell the SSA bond in the future at better prices than it is offering at the  time to its customer.    69.  As is typical in many financial markets, trading of SSA bonds is done through  telephonic and, increasingly, electronic means.  Orders are taken by salespersons at dealers,  which are then relayed to bond traders at the banks’ trading desks so they can be filled.    70.  Defendants dominate the secondary market, acting as “market makers” that  provide liquidity to investors by their willingness to buy and sell SSA bonds whenever an  investor seeks to do so.    72.  SSA bonds are generally regarded as highly secure investments, and SSA bond  issuers are generally characterized by having “well-diversified, high performing portfolio of  assets with . . . strong capital ratios and healthy liquidity buffers.”9   74.  As a result of both explicit and implicit guarantees on their debt, SSA bond  issuers enjoy very high credit ratings, and their bonds are considered “investment grade,” i.e.,  low risk of default.   75.  Standard & Poor’s (“S&P”) and Moody’s, two leading credit rating agencies, rate  SSA bond issues.  A bond is considered investment grade if its credit rating is “BBB-” or higher  by S&P, or “Baa3” or higher by Moody’s.    E.  Increased Popularity of SSA Bonds   76.  Recent global economic crises and the consequent aversion for investment risk  have resulted in the SSA bond market becoming an increasingly important sector within the  overall bond market because of SSA bonds’ relatively low risk profiles.  Indeed, investor  demand for SSA bonds has increased steadily between 2005 and the present, with the SSA bond  market tripling in size over the period 2005-2012.     77.  SSA bonds have remained a popular investment, and more recently, there has  been an increased demand specifically for U.S. dollar-denominated SSA bonds.   79.  As a result, many European entities found that issuing SSA bonds in U.S. dollars  provided greater economic opportunities – both in terms of funding costs and generating investor  appetite.  Indeed, CADES, a French SSA bond issuer, noted that conditions created a “favorable  cross-currency basis swap [between U.S. dollars and euros that] has allowed us to swap the  proceeds back into euros to achieve very attractive all-in funding costs.”13   A.   Background of the SSA Bond Market   