North American Bond Research – November 12, 2019

IT APPEARS NO DEAL WITH CHINA IS FORTHCOMING. Trump is threating to raise more tariffs and retaliate against China causing further damage to both economies. The 10-year note fell 3.4 basis points. S&P +0.26%, DOW +0.02%, NASDAQ +0.48%

STOCKS WERE UNCHANGED. Longer term bond yields were higher. Blackstone stated negative yields globally are still the “mother of all bubbles”. 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, Pacific Gas & Electric Co. (USD) 3.85% 11/15/2023 made analysts’ ‘Conviction Buy’ list. (See the chart below for Pacific Gas & Electric Co bonds) Pierre Robert

Key Gainers and Losers	Volume Leaders
+   Abbvie Inc. 4.875% 11/14/2048 + 1.0%   Abbvie Inc. 2.5% 5/14/2020 + 0.0% –   BNP Paribas VAR% 1/10/2030 144A -0.0%   Bayer US Finance LLC 4.375% 12/15/2028 144A -0.0%	Abbvie Inc.   4.875% 11/14/2048 BNP Paribas   VAR% 1/10/2030 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.08% -0.04% -0.08% 0.77% 5.74% 6.57% Mining -0.13% -0.90% -1.29% 0.36% 10.97% 28.48% Construction -0.04% -0.92% -1.28% 0.06% 8.88% 10.06% Manufacturing -0.04% -0.83% -0.93% 0.93% 10.65% 11.75% Transportion, Communication, Electric/Gas -0.13% -1.17% -1.39% 0.42% 13.02% 14.93% Wholesale 0.01% -0.63% -0.41% 1.64% 12.64% 12.71% Retail -0.02% -1.01% -1.14% 0.86% 11.61% 12.93% Finance, Insurance, Real-Estate -0.03% -0.57% -0.61% 0.85% 9.46% 10.85% Services -0.04% -0.81% -1.12% 0.85% 10.23% 11.88% Public Administration -0.04% -0.39% -0.74% 0.41% 4.34% 6.48% Energy -0.11% -0.98% -1.28% 0.31% 11.37% 22.45%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Abbvie Inc. (USD) 2.6% 11/21/2024 Reg S (11/12/2019): 3750MM Senior Unsecured Notes, Price at Issuance 99.911, Yielding 2.62%. 2. BNP Paribas (USD) 2.819% 11/19/2025 144A (11/12/2019): 2000MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 2.82%.

NEW ISSUANCE WATCH: on 11/05/19 participants welcome a $500MM new corporate-bond offering by
Xcel Energy Inc.The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 Million.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Hertz Corp. (5Y Sen USD XR14)	Ghana, Republic of (5Y Sen USD CR14) Cable & Wireless Communication (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 36 bp (basis points), as of 11/12/19
• Net positive capital flows into high-yield ETFs & mutual funds

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IT APPEARS NO DEAL WITH CHINA IS FORTHCOMING. Trump is threating to raise more tariffs and retaliate against China causing further damage to both economies. The 10-year note fell 3.4 basis points. S&P +0.26%, DOW +0.02%, NASDAQ +0.48%

Key Gainers and Losers	Volume Leaders
+   Windstream Services LLC 8.625% 10/31/2025 144A + 0.9%   Teva Pharmaceutical Industries LTD 2.8% 7/21/2023 + 0.8% –   Dean Foods Co. 6.5% 3/15/2023 144A -35.7%   Communications Sales & Leasing Inc. 8.25% 10/15/2023 -2.1%	Dean Foods Co.   6.5% 3/15/2023 144A Teva Pharmaceutical Industries LTD   2.8% 7/21/2023

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.03% 0.09% 0.60% 3.26% 18.43% 17.66% Mining -0.06% 0.51% 0.55% -0.92% 5.63% 0.59% Construction -0.17% -0.19% 0.63% 2.82% 14.52% 12.93% Manufacturing 0.01% 0.22% 1.41% 2.58% 11.85% 9.60% Transportion, Communication, Electric/Gas -0.07% -0.05% 0.41% 1.84% 13.94% 10.98% Wholesale -0.02% -0.08% 0.38% 1.64% 12.26% 9.35% Retail -0.07% -0.04% 1.09% 2.54% 15.43% 11.89% Finance, Insurance, Real-Estate -0.02% 0.01% 0.85% 2.07% 13.42% 10.69% Services -0.05% -0.13% 0.76% 2.28% 12.82% 10.48% Public Administration 0.12% 0.02% 0.92% 1.53% 13.75% 14.93% Energy -0.10% 0.32% -0.05% -0.84% 5.91% 1.22%   Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
1. Sealed Air Corp. (USD) 4% 12/1/2027 144A (11/12/2019): 425MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%. 2. Goeasy LTD (USD) 5.375% 12/1/2024 Reg S (11/12/2019): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.38%.	1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019 2. DDM Holding AG: ¬100MM, Expected Q4 2019

NEW ISSUANCE WATCH: on 11/05/19 participants welcome a $500MM new corporate-bond offering by
MSCI Inc. The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 Million.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Hertz Corp. (5Y Sen USD CR14) Hovnanian Enterprises Inc. (5Y Sen USD MR14)	Ghana, Republic of (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD XR14)

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 36 bp (basis points), as of 11/12/19
• Net positive capital flows into high-yield ETFs & mutual funds