North American Bond Research – March 17, 2020

MARKETS GET CRUSHED  AS GOVERNMENTS RACE TO FIGHT THE CORONAVIRUS AND SHORE UP FINANCIAL MARKETS AND ECONOMIES.  10 Year Treasury notes were up 26.9 basis points.  S&P +6%, Dow +5.2%, NASDAQ  6.23%.

Key Gainers and Losers

Volume Leaders

+   Uber Technologies Inc. 8% 11/1/2026 144A +0.3%   Numericable-SFR SA 7.375% 5/1/2026 144A +0.8%   CenturyLink Inc. 5.125% 12/15/2026 144A +1.7%   T-Mobile USA Inc. 6.375% 3/1/2025 +1.5%   Tesla Motors Inc. 5.3% 8/15/2025 144A +0.4% –   Ally Financial Inc. 4.625% 3/30/2025 -2.8%   Petrobras Global Finance BV 6.85% 6/5/2115 -1.8%   Credit Agricole SA 8.125% PERP 144A -3.6%   CSC Hldg LLC 5.75% 1/15/2030 144A -0.2%   American Airlines Group Inc. 3.75% 3/1/2025 144A -0.0%

Uber Technologies Inc.   8% 11/1/2026 144A Numericable-SFR SA   7.375% 5/1/2026 144A Ally Financial Inc.   4.625% 3/30/2025 CenturyLink Inc.   5.125% 12/15/2026 144A Petrobras Global Finance BV   6.85% 6/5/2115 Credit Agricole SA   8.125% PERP 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -2.21% -9.39% -12.03% -10.07% -10.46% 1.72% Mining -3.76% -15.73% -32.23% -32.30% -33.04% -25.92% Construction -1.13% -4.38% -5.93% -3.57% -3.76% 7.38% Manufacturing -1.85% -6.33% -8.90% -6.65% -7.11% 2.01% Transportion, Communication, Electric/Gas -2.52% -7.55% -10.69% -7.73% -8.56% 1.33% Wholesale -2.10% -6.25% -10.03% -8.01% -8.62% -0.44% Retail -2.71% -7.16% -10.53% -7.92% -9.08% 3.54% Finance, Insurance, Real-Estate -1.79% -6.24% -8.54% -6.61% -6.99% 2.80% Services -2.19% -6.57% -9.43% -7.57% -8.03% 2.07% Public Administration -1.61% -10.74% -11.65% -8.23% -9.28% -0.36% Energy -3.79% -16.45% -32.32% -31.56% -32.96% -26.15%   Total returns (non-annualized) by rating, market weighted.

New Issues

Forward Calendar

(None Current 03/17/2020)

1. Alpha Auto Group: $225MM notes 2. DDM Holding AG: ¬100MM 3. Qmax Financial Holdings Inc.: $225MM senior notes 4. Martin Midstream Partners LP: $400MM senior secured notes 5. Obsidian Energy Ltd.: $100MM 6. INTL Fcstone: $350MM senior secured notes 7. AVI-SPL: $370MM covenant lite TLB (B2/B) 8. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL 9. CJ Foods Inc.: $285MM TLB 10. Cornerstone Ondemand Inc.: $1.135MM senior secured credit facilities: $150MM revolver; $985MM 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
Fusion Connect Inc. (USD) TL EXIT L+950 12/31/2049 Cision US Inc. (USD) TLB L+375 01/24/2027 Aviation Capital Group LLC (USD) RC L+100 06/03/2024 MA Financeco LLC (USD) TLB2 L+250 11/20/2021 SS&C Technologies Inc. (USD) TLB4 L+175 04/18/2025	Allnex Sarl (USD) TLB3 L+325 09/13/2023 Travel Leaders Group (USD) TLB L+400 01/25/2024 Jostens Inc. (USD) TL L+550 12/21/2025 Hillman Group Inc. (USD) TLB L+400 05/31/2025 Jane Street (USD) TLB L+300 01/07/2025

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  60 bp (basis points), as of 03/17/2020
• Net negative capital flows into high-yield ETFs & mutual funds

MARKETS GET CRUSHED  AS GOVERNMENTS RACE TO FIGHT THE CORONAVIRUS AND SHORE UP FINANCIAL MARKETS AND ECONOMIES.  10 Year Treasury notes were up 26.9 basis points.  S&P +6%, Dow +5.2%, NASDAQ  6.23%.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 200000+ CASES AND 8000+ 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
+   JPMorgan Chase & Co. 3.125% 1/23/2025 +3.8%   Wells Fargo & Co. FLT% 1/24/2023 +3.7%   Bank of America Corp. FLT% 4/24/2023 +1.8%   Bank of America Corp. 3.004% 12/20/2023 +0.3% –   CVS Health Corp. 5.05% 3/25/2048 -7.0%   Abbvie Inc. 4.25% 11/21/2049 144A -8.3%   Bank of America Corp. 2.496% 2/13/2031 -2.5%   General Electric Co. FLT% PERP (1) -1.9%	CVS Health Corp.   5.05% 3/25/2048 Abbvie Inc.   4.25% 11/21/2049 144A Bank of America Corp.   2.496% 2/13/2031 General Electric Co.   FLT% PERP (1)

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -1.06% -3.32% -3.70% -0.16% -0.72% 5.78% Mining -0.59% -7.74% -10.44% -8.23% -8.59% 2.72% Construction -0.36% -4.18% -3.62% -0.93% -1.16% 6.61% Manufacturing -0.33% -4.21% -2.23% 0.06% -0.13% 9.50% Transportion, Communication, Electric/Gas -0.54% -5.95% -4.34% -1.50% -1.59% 10.39% Wholesale -0.30% -3.77% -2.60% -0.47% -0.83% 9.12% Retail -0.31% -4.65% -2.53% -0.20% -0.35% 10.11% Finance, Insurance, Real-Estate -0.44% -3.59% -2.09% -0.12% -0.33% 7.54% Services -0.45% -4.60% -2.10% 0.26% 0.08% 9.65% Public Administration 0.20% -0.17% 2.19% 3.23% 3.12% 6.40% Energy -0.54% -7.91% -11.03% -8.86% -9.25% 1.52%   Total returns (non-annualized) by rating, market weighted.

New Issues

New Issues [Continued]

1. Verizon Communications Inc. (USD) 4% 3/22/2050 (03/17/2020): 1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%. 2. Exxon Mobil Corp. (USD) 2.992% 3/19/2025 (03/17/2020): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.99%. 3. Bank of America Corp. (USD) VAR% 3/20/2051 (03/17/2020): 3000MM Senior Unsecured Notes, Price at Issuance 100. 4. Consumers Energy Co. (USD) 3.5% 8/1/2051 (03/17/2020): 575MM Secured Notes, Price at Issuance 99.606, Yielding 3.52%. 5. Union Electric Co. (USD) 2.95% 3/15/2030 (03/17/2020): 465MM Secured Notes, Price at Issuance 99.914, Yielding 2.96%. 6. Progressive Corp. (USD) 3.95% 3/26/2050 (03/17/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.148, Yielding 4%. 7. Verizon Communications Inc. (USD) 3.15% 3/22/2030 (03/17/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.693, Yielding 3.19%. 8. Verizon Communications Inc. (USD) 3% 3/22/2027 (03/17/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.95, Yielding 3.01%. 9. PepsiCo Inc. (USD) 2.75% 3/19/2030 (03/17/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.463, Yielding 2.81%.

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
Fusion Connect Inc. (USD) TL EXIT L+950 12/31/2049 Cision US Inc. (USD) TLB L+375 01/24/2027 Aviation Capital Group LLC (USD) RC L+100 06/03/2024 MA Financeco LLC (USD) TLB2 L+250 11/20/2021 SS&C Technologies Inc. (USD) TLB4 L+175 04/18/2025	Allnex Sarl (USD) TLB3 L+325 09/13/2023 Travel Leaders Group (USD) TLB L+400 01/25/2024 Jostens Inc. (USD) TL L+550 12/21/2025 Hillman Group Inc. (USD) TLB L+400 05/31/2025 Jane Street (USD) TLB L+300 01/07/2025

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 60 bp (basis points), as of 03/17/2020
• Net positive capital flows into high-yield ETFs & mutual funds

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