North American Bond Research – March 18, 2020

ANOTHER DOWN DAY AS THE CRISIS SINKS IN AND GOVERNMENTS CONTINUE TO GRAPPLE WITH WHAT TO DO. VARIOUS PACKAGES ARE BEING WEIGHED AND VARIOUS POSSIBLE CRISIS SCENARIOS ARE COMING TO LIGHT. 10 Year Treasury notes were up 26.9 basis points.  S&P -5.18%, Dow -6.3%, NASDAQ  -4.7%.

Key Gainers and Losers	Volume Leaders
+   Ferrellgas Partners LP 6.75% 6/15/2023 +8.9%   T-Mobile USA Inc. 6% 3/1/2023 +0.1%   Ferrellgas Partners LP 6.75% 1/15/2022 +5.8% –   Washington Prime Group LP 5.95% 8/15/2024 -6.1%   Dish DBS Corp. 7.75% 7/1/2026 -3.1%   Petrobras Global Finance BV 6.85% 6/5/2115 -13.5%	Washington Prime Group LP   5.95% 8/15/2024 Dish DBS Corp.   7.75% 7/1/2026 Petrobras Global Finance BV   6.85% 6/5/2115

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -3.12% -10.68% -14.76% -12.89% -13.23% -1.50% Mining -3.41% -16.40% -34.86% -34.07% -35.51% -26.78% Construction -1.55% -5.08% -7.27% -5.00% -5.11% 6.06% Manufacturing -1.38% -7.05% -10.40% -8.32% -8.58% 1.13% Transportion, Communication, Electric/Gas -1.39% -8.23% -11.87% -9.19% -9.82% 0.15% Wholesale -0.77% -7.74% -12.42% -10.56% -11.04% -2.21% Retail -1.56% -8.44% -12.44% -9.87% -10.94% 1.74% Finance, Insurance, Real-Estate -1.11% -6.50% -9.24% -7.40% -7.68% 2.46% Services -1.35% -7.49% -10.86% -9.19% -9.51% 0.91% Public Administration -1.73% -10.74% -13.20% -10.02% -10.86% -2.11% Energy -3.22% -16.65% -34.69% -33.08% -35.17% -26.90%   Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
(None Current 03/18/2020)	1. Martin Midstream Partners LP: $400MM senior secured notes 2. INTL Fcstone: $350MM senior secured notes 3. Alpha Auto Group: $225MM notes 4. Wesco International: $2.2B debt securities

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
Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024 AVSC Holding Corp. (USD) TLB L+450 09/19/2026 Audio Visual Services Corp. (USD) TLB L+325 03/01/2025 Golden Entertainment, Inc. (USD) TL L+300 10/20/2024 Kingpin Intermediate Holdings LLC (USD) TLB L+350 07/03/2024	Casper Bidco (EUR) TLB3 E+387.5 07/30/2026 EG Group (GBP) TLB L+475 02/02/2025 Fly Leasing LTD (USD) TLB L+175 08/09/2025 Neptune Bidco SA R.L. (EUR) TLB E+350 02/21/2027 Brightview Landscapes LLC (USD) TL L+250 08/10/2025

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  90 bp (basis points), as of 03/18/2020
• Net negative capital flows into high-yield ETFs & mutual funds

ANOTHER DOWN DAY AS THE CRISIS SINKS IN AND GOVERNMENTS CONTINUE TO GRAPPLE WITH WHAT TO DO. VARIOUS PACKAGES ARE BEING WEIGHED AND VARIOUS POSSIBLE CRISIS SCENARIOS ARE COMING TO LIGHT. 10 Year Treasury notes were up 26.9 basis points.  S&P -5.18%, Dow -6.3%, NASDAQ  -4.7%.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 220000+ CASES AND 9000+ DEATHS. THE VIRUS SEEMS TO BE DOWN TO A TRICKLE 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
+   Oracle Corp. 1.9% 9/15/2021 +2.0%   Wal-Mart Stores Inc. 3.125% 6/23/2021 +1.2%   GlaxoSmithKline Capital PLC 3.125% 5/14/2021 +0.8% –   Citigroup Inc. 2.666% 1/29/2031 -6.2%   General Electric Co. FLT% PERP (1) -6.8%   Boeing Co. 3.95% 8/1/2059 -12.3%	Citigroup Inc.   2.666% 1/29/2031 General Electric Co.   FLT% PERP (1) Boeing Co.   3.95% 8/1/2059

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -1.20% -4.51% -4.82% -1.40% -1.86% 5.70% Mining -1.66% -7.66% -12.66% -10.60% -10.89% 0.55% Construction -1.14% -4.37% -4.49% -1.78% -1.97% 6.12% Manufacturing -1.23% -5.01% -3.64% -1.38% -1.54% 8.25% Transportion, Communication, Electric/Gas -1.76% -6.88% -6.23% -3.47% -3.52% 8.29% Wholesale -1.08% -4.58% -3.72% -1.74% -2.01% 8.35% Retail -1.31% -5.44% -3.86% -1.54% -1.66% 8.82% Finance, Insurance, Real-Estate -0.85% -3.89% -2.94% -1.05% -1.22% 6.62% Services -1.37% -5.55% -3.74% -1.50% -1.63% 8.44% Public Administration -0.21% -0.34% 1.96% 3.05% 2.89% 6.23% Energy -1.68% -7.50% -12.90% -10.85% -11.14% -0.47%   Total returns (non-annualized) by rating, market weighted.

New Issues

New Issues [Continued]

1. Exxon Mobil Corp. (USD) 2.992% 3/19/2025 (03/17/2020): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.99%. 2. Bank of America Corp. (USD) VAR% 3/20/2051 (03/17/2020): 3000MM Senior Unsecured Notes, Price at Issuance 100. 3. Consumers Energy Co. (USD) 3.5% 8/1/2051 (03/17/2020): 575MM Secured Notes, Price at Issuance 99.606, Yielding 3.52%. 4. Union Electric Co. (USD) 2.95% 3/15/2030 (03/17/2020): 465MM Secured Notes, Price at Issuance 99.914, Yielding 2.96%. 5. Progressive Corp. (USD) 3.2% 3/26/2030 (03/17/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.2%. 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
Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024 AVSC Holding Corp. (USD) TLB L+450 09/19/2026 Audio Visual Services Corp. (USD) TLB L+325 03/01/2025 Golden Entertainment, Inc. (USD) TL L+300 10/20/2024 Kingpin Intermediate Holdings LLC (USD) TLB L+350 07/03/2024	Casper Bidco (EUR) TLB3 E+387.5 07/30/2026 EG Group (GBP) TLB L+475 02/02/2025 Fly Leasing LTD (USD) TLB L+175 08/09/2025 Neptune Bidco SA R.L. (EUR) TLB E+350 02/21/2027 Brightview Landscapes LLC (USD) TL L+250 08/10/2025

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 90 bp (basis points), as of 03/18/2020
• Net positive capital flows into high-yield ETFs & mutual funds

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