North American Bond Research – March 25, 2020

Key Gainers and Losers

Volume Leaders

+   BNP Paribas VAR% PERP 144A +4.9%   HCA Inc. 3.5% 9/1/2030 +9.5%   Netflix Inc. 5.875% 11/15/2028 +1.6%   Altice Financing SA 7.5% 5/15/2026 144A +9.4%   Numericable-SFR SA 7.375% 5/1/2026 144A +5.3% –   Sally Hldg LLC 5.625% 12/1/2025 -0.9%   Bombardier Inc. 8.75% 12/1/2021 144A -1.9%   Ladder Capital Finance LLC 4.25% 2/1/2027 144A -1.7%   Lennar Corp. 6.25% 12/15/2021 (1) -0.5%   Cenovus Energy Inc. 6.75% 11/15/2039 (1) -1.8%

BNP Paribas   VAR% PERP 144A HCA Inc.   3.5% 9/1/2030 Netflix Inc.   5.875% 11/15/2028 Sally Hldg LLC   5.625% 12/1/2025 Altice Financing SA   7.5% 5/15/2026 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.59% -6.29% -20.43% -18.61% -18.72% -8.98% Mining -0.04% -14.94% -41.74% -41.36% -42.53% -34.05% Construction -1.00% -7.38% -13.79% -11.44% -11.50% -0.48% Manufacturing 0.05% -8.59% -17.81% -16.15% -16.13% -6.38% Transportion, Communication, Electric/Gas 0.66% -8.25% -18.49% -16.51% -16.57% -6.69% Wholesale -0.20% -7.23% -17.50% -16.33% -16.52% -7.27% Retail -0.09% -9.33% -19.48% -17.96% -18.16% -3.94% Finance, Insurance, Real-Estate -0.00% -8.95% -17.10% -15.33% -15.44% -4.74% Services 0.05% -8.84% -18.54% -17.34% -17.42% -6.40% Public Administration -0.82% -7.02% -19.93% -16.87% -17.13% -9.30% Energy -0.13% -14.68% -42.01% -41.42% -42.64% -35.07%   Total returns (non-annualized) by rating, market weighted.

New Issues

Forward Calendar

(None Current 03/25/2020)

1. AVI-SPL: $370MM covenant lite TLB (B2/B) 2. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL 3. CJ Foods Inc.: $285MM TLB 4. Cornerstone Ondemand Inc.: $1.135MM senior secured credit facilities: $150MM revolver; $985MM TLB 5. Eldorado Resorts Inc./Caesars Entertainment Corp.: $6.4B credit facilities:$1B revolver at Eldorados; $3B seven-year cove-lite TLB due 2027 at Eldorado; $2.4B seven-year cove-lite TLB due 2027 at Caesars Resorts Collection 6. Innovate Xcessories & Services LLC: $695MM credit facilities: $75MM revolver; $620MM TL(B2/B) 7. Instructure: $825MM senior secured credit facilities: $50MM revolver; $775MM TL 8. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 9. Snapav: $390MM term loans: $290MM TL (B2); $100MM TL 10. Tata Chemicals North America Inc. : $380MM TL (Ba3)

NEW ISSUANCE WATCH: No new issues  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
McDermott International Inc. (USD) DD L+1000 10/21/2021 Ascent Resources Marcellus LLC (USD) TL EXT L+650 12/31/2049 Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024 WCA Waste Corp. (USD) TLB L+250 08/12/2023 LGC LTD (EUR) TLB E+400 03/08/2023	Citco Group LTD (USD) TL L+250 09/17/2023 Janus International Group LLC (USD) TL L+375 02/07/2025 Merrill Communications LLC (USD) TLB L+500 09/26/2026 Brooks Automation Inc. (USD) TLB L+300 10/04/2024 Tibco Software Inc. (USD) TLB L+400 07/03/2026

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  123.87 bp (basis points), as of 03/25/2020
• Net negative capital flows into high-yield ETFs & mutual funds

MARKETS WERE UP FOR THE MOST PART DUE TO THE SENATE PASSING THE $2 TRILLION DOLLAR AID PACKAGE. CORONAVIRUS STILL WEIGHING ON THE MARKET THAT THERE IS A LOT TO COME. 10 Year Treasury notes were down 14.7 basis points. S&P +1.15%, Dow +2.39%, NASDAQ +-0.45%.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 466000+ CASES AND 21000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 65000+ CASES AND 920+ DEATHS.    Among high-grade bonds showing topmost price gains at appreciable volumes traded, JC Penney Co Inc (USD) 7.125% 11/15/2023 made analysts’ ‘Conviction Buy’ list. (See the chart below for JC Penney Co Inc. bonds) Pierre Robert

Key Gainers and Losers

Volume Leaders

+   Wells Fargo & Co. 5.013% 4/4/2051 +8.2%   JP Morgan Chase & Co. 4.493% 3/24/2031 +2.6%   McDonald’s Corp. 3.625% 9/1/2049 +2.1%   PepsiCo. Inc. 3.625% 3/19/2050 +8.9%   Anheuser-Busch Inbev Worldwide Inc. 4.9% 2/1/2046 +9.8% –   Walt Disney Co. 4.625% 3/23/2040 -1.1%   Gilead Sciences Inc. 2.55% 9/1/2020 -0.1%   Caterpillar Financial Services Corp. FLT% 3/15/2021 -0.5%   Marathon Oil Corp. 4.4% 7/15/2027 -12.9%   Hospitality Properties Trust 5.25% 2/15/2026 -9.8%

Wells Fargo & Co.   5.013% 4/4/2051 Lowe’s Companies Inc.   5.125% 4/15/2050 JP Morgan Chase & Co.   4.493% 3/24/2031 McDonald’s Corp.   3.625% 9/1/2049 PepsiCo. Inc.   3.625% 3/19/2050

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.68% -3.95% -7.88% -5.03% -4.84% 4.74% Mining -0.52% -9.60% -20.36% -17.94% -18.10% -6.57% Construction -1.53% -7.53% -12.45% -9.57% -9.60% -0.99% Manufacturing 0.45% -4.73% -8.67% -5.84% -5.98% 3.05% Transportion, Communication, Electric/Gas 0.19% -5.39% -11.90% -8.34% -8.39% 1.80% Wholesale -0.18% -5.43% -8.86% -6.33% -6.48% 2.03% Retail 0.53% -5.22% -9.31% -6.25% -6.36% 2.90% Finance, Insurance, Real-Estate 0.15% -3.83% -7.08% -4.70% -4.86% 2.37% Services 0.46% -4.26% -8.41% -5.51% -5.63% 4.12% Public Administration -0.00% 0.28% 1.89% 3.32% 3.20% 6.01% Energy -0.42% -9.01% -20.45% -17.87% -17.99% -7.98%   Total returns (non-annualized) by rating, market weighted.

New Issues

New Issues [Continued]

1. Kimberly-Clark Corp. (USD) 3.1% 3/26/2030 (03/24/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.923, Yielding 3.11%. 2. Florida Power & Light (USD) 2.85% 4/1/2025 (03/24/2020): 1100MM Senior Secured Notes, Price at Issuance 99.898, Yielding 2.87%. 3. Comcast Corp. (USD) 3.1% 4/1/2025 (03/24/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.949, Yielding 3.11%. 4. Comcast Corp. (USD) 3.3% 4/1/2027 (03/24/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.73, Yielding 3.34%. 5. Comcast Corp. (USD) 3.4% 4/1/2030 (03/24/2020): 1600MM Senior Unsecured Notes, Price at Issuance 99.823, Yielding 3.42%. 6. Comcast Corp. (USD) 3.75% 4/1/2040 (03/24/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.456, Yielding 3.79%. 7. Citigroup Inc. (USD) 4.412% 3/31/2031 (03/24/2020): 4000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.41%. 8. Lowe’s Companies Inc. (USD) 5% 4/15/2040 (03/24/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.533, Yielding 5.04%. 9. Lowe’s Companies Inc. (USD) 5.125% 4/15/2050 (03/24/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.814, Yielding 5.14%. 10. Chevron Phillips Chemical Co. LLC (USD) 5.125% 4/1/2025 144A (03/24/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.992, Yielding 5.13%.

NEW ISSUANCE WATCH: on 03/25/2020 participants welcome an $800MM new corporate-bond offering by Comcast. 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
McDermott International Inc. (USD) DD L+1000 10/21/2021 Ascent Resources Marcellus LLC (USD) TL EXT L+650 12/31/2049 Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024 WCA Waste Corp. (USD) TLB L+250 08/12/2023 LGC LTD (EUR) TLB E+400 03/08/2023	Citco Group LTD (USD) TL L+250 09/17/2023 Janus International Group LLC (USD) TL L+375 02/07/2025 Merrill Communications LLC (USD) TLB L+500 09/26/2026 Brooks Automation Inc. (USD) TLB L+300 10/04/2024 Tibco Software Inc. (USD) TLB L+400 07/03/2026

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 123.87 bp (basis points), as of 03/25/2020
• Net positive capital flows into high-yield ETFs & mutual funds

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