North American Bond Research – February 10, 2020

MARKETS CONTINUE THEIR UPWARD TREND! MARKET CONTINUES UP! S&P 10 year Treasury notes were down 1.1 basis points. S&P +0.73%, Dow +0.37%, NASDAQ +0.67%.

Key Gainers and Losers	Volume Leaders
+   Whiting Petroleum Corp. 6.625% 1/15/2026 + 2.1%   Teva Pharmaceuticals Fin BV 6% 4/15/2024 + 1.0%   Sprint Capital Corp. 6.875% 11/15/2028 + 0.9% –   Intelsat Luxembourg SA 8.125% 6/1/2023 -10.2%   Washington Prime Group LP 5.95% 8/15/2024 -0.4%   Expedia Inc. 3.8% 2/15/2028 (1) -0.2%	Intelsat Luxembourg SA   8.125% 6/1/2023 Washington Prime Group LP   5.95% 8/15/2024 Whiting Petroleum Corp.   6.625% 1/15/2026

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.04% 0.04% 0.59% 3.23% 1.21% 17.52% Mining 0.03% -0.66% -3.43% 1.60% -2.58% 2.04% Construction 0.06% 0.30% 1.09% 2.50% 1.29% 13.84% Manufacturing 0.05% 0.09% 0.60% 3.13% 0.91% 11.76% Transportion, Communication, Electric/Gas 0.02% 0.00% 0.66% 2.68% 0.95% 13.48% Wholesale 0.04% 0.09% 0.59% 2.56% 0.87% 9.91% Retail 0.07% 0.30% 0.75% 2.33% 0.98% 13.69% Finance, Insurance, Real-Estate 0.04% 0.22% 0.80% 2.57% 1.06% 11.75% Services 0.08% 0.18% 0.51% 2.62% 0.74% 10.86% Public Administration -0.28% -0.17% 0.53% 2.87% 0.90% 13.15% Energy -0.07% -0.49% -2.34% 2.33% -1.62% 4.17%   Total returns (non-annualized) by rating, market weighted.

New Issues

Forward Calendar

1. Banijay Group Sas (USD) 5.375% 3/1/2025 144A (02/04/2020): 403MM Secured Notes, Price at Issuance 100, Yielding 5.38%. 2. Iris Merger Sub 2019, Inc. (USD) 9.375% 2/15/2028 144A (02/04/2020): 275MM Senior Unsecured Notes, Price at Issuance 100, Yielding 9.38%. 3. Arconic Rolled Products Corp. (USD) 6.125% 2/15/2028 144A (02/05/2020): 600MM Second Lien Notes, Price at Issuance 100, Yielding 6.13%.

1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019 2. Calpine Corp.: $1.4B bonds, Expected Q4 2019 3. Diamondback Energy Inc.: High-yield notes, Expected Q4 2019

NEW ISSUANCE WATCH: on 02/03/2020 participants welcome a $300MM new corporate-bond offering by
Castle US Holdings.  The most recent data showed money flowed in of ETF/mutual funds for the week ended 01/10/2020, with a net inflow of $9.8 billion.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Weatherford International LTD (5Y Sen USD MR14) Hertz Corp. (5Y Sen USD CR14)	Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14)

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• Symantec Corp., Broadcom LTD, Toll Brothers Inc., Cole-Parmer Instrument Co.

OVERALL CREDIT MARKET:

Long-term bond yields are expected to hit a cyclical peak in 2019 given tight fiscal policy and lagging global economies. Europe remains checked by stubbornly low inflationary forces.  Positive effects remained in force:

• TED spread held below 20 bp (basis points), as of 02/05/2020
• Net negative capital flows into high-yield ETFs & mutual funds

MARKETS CONTINUE THEIR UPWARD TREND! MARKETS SHRUG OFF THE CORONAVIRUS AND BELIEVE TRUMP’S ACQUITTAL WILL ONLY FUEL THE MARKET’S UPWARD CLIMB.  S&P 10 year Treasury notes were down .5 basis points.  S&P +1.13%, Dow +1.68%, NASDAQ +0.43%.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 28000+ CASES AND 600+ DEATHS. INFECTION HAS SPREAD TO OVER 25 COUNTRIES WITH 500+ CONFIRMED CASES.  ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded,  Anheuser Busch Companies Inc (USD) 5.75% 4/1/2036  made analysts’ ‘Conviction Buy’ list. (See the chart below for Anheuser Busch Companies Inc bonds) Pierre Robert

Key Gainers and Losers	Volume Leaders
+   Wells Fargo & Co. VAR% 2/11/2031 + 0.2%   Morgan Stanley 2.699% 1/22/2031 + 0.4%   Citibank NA 2.85% 2/12/2021 + 0.1% –   Bank of America Corp. VAR% 2/7/2030 -0.4%   Bank of America Corp. VAR% 10/22/2030 -0.2%   Energy Transfer Operating, LP 5% 5/15/2050 -0.3%	Wells Fargo & Co.   VAR% 2/11/2031 Bank of America Corp.   VAR% 2/7/2030 Bank of America Corp.   VAR% 10/22/2030 Energy Transfer Operating, LP   5% 5/15/2050

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.02% 0.04% 2.02% 3.83% 2.25% 5.89% Mining 0.27% -0.11% 1.18% 3.60% 1.68% 11.77% Construction 0.21% -0.15% 1.58% 3.46% 2.18% 10.77% Manufacturing 0.22% -0.09% 1.65% 3.41% 1.99% 11.73% Transportion, Communication, Electric/Gas 0.28% -0.16% 2.05% 4.26% 2.54% 15.06% Wholesale 0.22% -0.05% 1.72% 3.62% 1.98% 13.90% Retail 0.27% -0.03% 1.73% 3.57% 2.00% 12.89% Finance, Insurance, Real-Estate 0.15% -0.11% 1.27% 2.68% 1.57% 10.07% Services 0.20% -0.08% 1.58% 3.09% 1.85% 11.22% Public Administration 0.05% -0.15% 0.62% 1.16% 0.83% 5.10% Energy 0.27% -0.07% 1.20% 3.74% 1.59% 12.21%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
(None Current 02/10/2020)

NEW ISSUANCE WATCH: on 02/03/2020 participants welcome a $1800MM new corporate-bond offering by Open Test Corp. The most recent data showed money flowed in of ETF/mutual funds for the week ended 01/10/2020, with a net inflow of $9.8 billion.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Weatherford International LTD (5Y Sen USD MR14) Hertz Corp. (5Y Sen USD CR14)	Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14)

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• Symantec Corp., Broadcom LTD, Toll Brothers Inc., Cole-Parmer Instrument Co.

OVERALL CREDIT MARKET:

Long-term bond yields are expected to hit a cyclical peak in 2019 given tight fiscal policy and lagging global economies. Europe remains checked by stubbornly low inflationary forces.  Positive effects remained in force:

• TED spread held below 18 bp (basis points), as of 02/04/2020
• Net positive capital flows into high-yield ETFs & mutual funds

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