North American Bond Research – March 10, 2020

PRESIDENT’S TRUMP PROPOSAL TO SUSPEND ALL PAYROLL TAX FOR THE REST OF THE YEAR SENT STOCKS SOARING! 10 Year Treasury notes were up 49 basis points.  S&P +4.94%, Dow +4.89%, NASDAQ  +4.94%.

Key Gainers and Losers	Volume Leaders
+   Petrobras Global Finance BV 6.85% 6/5/2115 +0.4%   Sprint Nextel Corp. 7.875% 9/15/2023 +2.1%   Expedia Inc. 3.8% 2/15/2028 (1) +1.5%   Hess Corp. 5.6% 2/15/2041 +4.6% –   Sabine Pass Liquefaction LLC 5.625% 3/1/2025 -6.3%   Micron Technology Inc. 4.663% 2/15/2030 -1.8%   WPX Energy Inc. 5.75% 6/1/2026 -0.1%   Micron Technology Inc. 4.975% 2/6/2026 -1.1%   SM Energy Co. 6.75% 9/15/2026 -1.2%	Petrobras Global Finance BV   6.85% 6/5/2115 Sprint Nextel Corp.   7.875% 9/15/2023 Sabine Pass Liquefaction LLC   5.625% 3/1/2025 Micron Technology Inc.   4.663% 2/15/2030 Expedia Inc.   3.8% 2/15/2028 (1)

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -1.41% -1.36% -2.49% -0.09% -1.20% 13.19% Mining -13.18% -14.72% -19.39% -17.77% -20.48% -14.06% Construction -1.05% -0.76% -1.01% 1.22% 0.63% 12.25% Manufacturing -1.36% -1.44% -1.98% 0.58% -0.56% 8.34% Transportion, Communication, Electric/Gas -1.78% -1.83% -1.92% 0.90% -0.62% 9.55% Wholesale -1.36% -1.38% -3.06% -0.39% -1.48% 6.75% Retail -1.82% -2.08% -3.30% -0.45% -1.99% 9.95% Finance, Insurance, Real-Estate -1.22% -1.16% -2.05% 0.27% -0.72% 9.07% Services -1.48% -1.60% -2.46% -0.13% -1.31% 8.06% Public Administration -1.44% -0.08% -0.01% 2.69% 1.45% 11.69% Energy -12.22% -13.16% -17.32% -14.82% -17.97% -11.59%   Total returns (non-annualized) by rating, market weighted.

New Issues

Forward Calendar

(None Current 03/10/2020)

1. CJ Foods Inc.: $285MM TLB 2. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 3. T-Mobile USA Inc.: $8B senior secured credit facilities: $4B five-year revolver; $4B seven-year cove-lite TL 4. Tata Chemicals North America Inc. : $380MM TL (Ba3) 5. Snapav: $390MM term loans: $290MM TL (B2); $100MM TL 6. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL 7. Open Lending LLC: $225MM TLB 8. Instructure: $825MM senior secured credit facilities: $50MM revolver; $775MM TL 9. AVI-SPL: $370MM covenant lite TLB (B2/B) 10. Capstone Logistics Acquisition Inc.: $395MM TLB

NEW ISSUANCE WATCH: on 02/21/2020 participants welcome a $600MM new corporate-bond offering by
Mattamy Group.  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 Loans	Top Narrowing Loans
Anastasia Beverly Hills (USD) TLB L+375 08/07/2025 Lightstone Holdco LLC (USD) TLB L+375 01/30/2024 United Natural Foods Inc. (USD) TLB L+425 10/22/2025 Travelport Finance Luxembourg Sarl (USD) TL L+500 05/30/2026 Tivity Health Inc. (USD) TLB L+525 03/08/2026	Waterbridge Operating LLC (USD) TLB L+575 06/18/2026 AMC Entertainment Hldg Inc. (USD) TLB L+300 04/22/2026 Casper Bidco (EUR) TLB3 E+387.5 07/30/2026 Cvent Inc. (USD) TL L+375 11/02/2024 ExGen Renewables I LLC (USD) TLB L+300 11/16/2024 Blackstone CQP Holdco LP (USD) TL L+350 09/30/2024

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  44 bp (basis points), as of 03/09/2020
• Net negative capital flows into high-yield ETFs & mutual funds

PRESIDENT’S TRUMP PROPOSAL TO SUSPEND ALL PAYROLL TAX FOR THE REST OF THE YEAR SENT STOCKS SOARING! 10 Year Treasury notes were up 49 basis points.  S&P +4.94%, Dow +4.89%, NASDAQ  +4.94%.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 113000+ CASES AND 4000+ DEATHS. THE VIRUS SEEMS TO BE SLOWING DOWN IN CHINA AS NEW CASES AND DEATHS SEEM TO BE ACCELERATING INTERNATIONALLY.     (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily grade increment for high-grade versus high-yield constituents. High-yield bonds edged out high-grade debt as of 3 PM, London time.  Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,  Bombardier Inc. (USD) 7.5% 12/1/2024 Reg S made some analysts ‘Conviction buy’ lists. (See the chart for Bombardier Inc. bonds below). Pierre Robert

Key Gainers and Losers	Volume Leaders
+   Occidental Petroleum Corp. 4.1% 2/1/2021 +1.9%   JP Morgan Chase & Co. 2.739% 10/15/2030 +0.7%   GE Capital Intl. Funding Co. 4.418% 11/15/2035 +0.2%   BP Capital Markets PLC 3% 2/24/2050 +1.1% –   Anheuser-Busch Inbev Worldwide Inc. 5.55% 1/23/2049 -1.3%   Exxon Mobil Corp. 3.095% 8/16/2049 -4.2%   CVS Health Corp. 5.05% 3/25/2048 -0.8%   JP Morgan Chase & Co. 4.6% PERP -0.4%	Anheuser-Busch Inbev Worldwide Inc.   5.55% 1/23/2049 Occidental Petroleum Corp.   4.1% 2/1/2021 Exxon Mobil Corp.   3.095% 8/16/2049 Occidental Petroleum Corp.   3.5% 8/15/2029 CVS Health Corp.   5.05% 3/25/2048

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.99% -0.46% 0.16% 3.20% 2.37% 6.07% Mining -2.30% -1.22% -0.56% 1.96% 1.19% 11.52% Construction -0.71% 0.90% 1.69% 4.34% 4.07% 12.02% Manufacturing -0.41% 1.05% 2.35% 4.79% 4.53% 14.42% Transportion, Communication, Electric/Gas -1.11% 0.73% 2.44% 5.45% 5.20% 17.71% Wholesale -0.48% 0.47% 1.66% 3.83% 3.45% 13.78% Retail -0.49% 1.12% 2.62% 4.93% 4.71% 15.79% Finance, Insurance, Real-Estate -0.41% 0.52% 1.74% 3.62% 3.37% 11.20% Services -0.38% 0.89% 2.38% 4.59% 4.40% 13.35% Public Administration 0.15% 1.12% 2.35% 3.27% 3.16% 6.93% Energy -2.70% -1.68% -0.98% 1.56% 0.68% 11.26%   Total returns (non-annualized) by rating, market weighted.

New Issues

New Issues [Continued]

1. JPMorgan Chase & Co. (USD) VAR% 3/13/2026 (03/10/2020): 2250MM Senior Unsecured Notes, Price at Issuance 100. 2. Willow No. 2 Ireland PLC (USD) 1.9% 3/15/2022 (03/10/2020): 141MM Secured Notes, Price at Issuance 100, Yielding 1.9%. 3. Johns Hopkins University (USD) 2.813% 1/1/2060 (03/10/2020): 370MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.81%. 4. Duke Energy Indiana Inc. (USD) 2.75% 4/1/2050 (03/10/2020): 550MM Secured Notes, Price at Issuance 99.877, Yielding 2.76%. 5. Textron Inc. (USD) 3% 6/1/2030 (03/10/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.523, Yielding 3.05%. 6. Rice University (USD) 2.598% 5/15/2050 (03/10/2020): 200MM Unsecured Notes, Price at Issuance 100, Yielding 2.6%. 7. Starbucks Corp. (USD) 3.35% 3/12/2050 (03/10/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.232, Yielding 3.39%. 8. Toronto-Dominion Bank (CAD) 1.943% 3/13/2025 (03/10/2020): 1750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.94%.

NEW ISSUANCE WATCH: on 03/06/2020 participants welcome a $700MM new corporate-bond offering by Key Bank. 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 Loans	Top Narrowing Loans
Anastasia Beverly Hills (USD) TLB L+375 08/07/2025 Lightstone Holdco LLC (USD) TLB L+375 01/30/2024 United Natural Foods Inc. (USD) TLB L+425 10/22/2025 Travelport Finance Luxembourg Sarl (USD) TL L+500 05/30/2026 Tivity Health Inc. (USD) TLB L+525 03/08/2026 Alorica (USD) TL L+375 06/30/2022	Waterbridge Operating LLC (USD) TLB L+575 06/18/2026 AMC Entertainment Hldg Inc. (USD) TLB L+300 04/22/2026 Casper Bidco (EUR) TLB3 E+387.5 07/30/2026 Cvent Inc. (USD) TL L+375 11/02/2024 ExGen Renewables I LLC (USD) TLB L+300 11/16/2024 Blackstone CQP Holdco LP (USD) TL L+350 09/30/2024

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 38 bp (basis points), as of 03/06/2020
• Net positive capital flows into high-yield ETFs & mutual funds

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