2018 Global High-Yield Bond Study

2018 Global High-Yield Bond Study

Contents

Overview and Methodology 3 Glossary 7 Categories of Analysis 10 High-Yield Bond Study • Call Protection 11 • Change of Control Portability 25 • Debt 31 • Restricted Payments/Investments 67 • Liens 99 • Affiliate Transactions 109 • Asset Sales 115 • Merger Covenant 127 • Registration Rights 135 • Covenant Suspension/Fall Away 143 • Collateral 151 • Events of Default 167

These materials are proprietary to Proskauer Rose LLP and may not be reproduced, transmitted or otherwise exploited in any media, in whole or in part, without the prior written authorization of Proskauer Rose LLP. Requests for permission may be addressed to: Frank Lopez, Co-Head of Global Capital Markets, Proskauer Rose LLP. This publication is a service to our clients and friends of the firm. This publication is not intended to be comprehensive nor to provide financial, investment, legal, tax or other professional advice or services. In addition, the sample population may not be an exact representation of the universe of deals because of limitations on the availability of deal information. This publication is not a substitute for professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment or other decision or action that may affect you or your business. Before making any such decision you should consult a suitably qualified professional adviser. While reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither Proskauer Rose LLP nor any other related entity shall have any liability to any person or entity that relies on the information contained in this publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk. © 2018 Proskauer Rose LLP. All rights reserved

Contacts Any questions regarding this study should be directed to: New York

Los Angeles

Andrew Bettwy Co-head, Finance +1.212.969.3180 [email protected]

Justin Breen Head, Leveraged Finance +1.212.969.3055 [email protected]

Stephen P. Gruberg Partner +1.212.969.3004 [email protected]

Frank J. Lopez Co-head, Global Capital Markets +1.212.969.3492 [email protected]

Daniel W. Hendrick Senior Counsel +1.212.969.3534 [email protected]

Mary Wills Bode Associate +1.212.969.3263 [email protected]

Brooke L. Fischer Associate +1.212.969.3685 [email protected]

Brendan Leanos Associate +1.212.969.3224 [email protected]

Fabio A. Yamada Partner +55.11.3045.1250 [email protected]

William A. Majeski Associate +1.212.969.3117 [email protected]

Jinyoung Joo Associate +1.212.969.3334 [email protected]

Javier Barrera Gazcon Associate +1.212.969.3419 [email protected]

Scott P. Thurman Associate +1.212.969.3374 [email protected]

Philippa M. Bond Co-head, Global Capital Markets +1.310.284.5607 [email protected]

London

Maximilian P. Kirchner Partner +44.20.7280.2074 [email protected]

São Paulo

Saulo Salles de Padua Associate +1.212.969.3418 [email protected]

Overview and Methodology

Overview

Call Protection

Change of Control Portability

Debt

Restricted Payments / Investments

Liens

Affiliate Transactions

Asset Sales

Merger Covenant

Registration Rights

Covenant Suspension / Fall Away

Collateral

Overview and Methodology Welcome to this seventh edition of Proskauer’s Global High-Yield Bond Study, our analysis of market trends for high-yield bond offerings. Using analyses from our proprietary database of approximately 2,000 high-yield bond deals, our study covers deals closed globally between 2013 and 2017 that meet our selection criteria. We categorize deals by geography, deal size, industry, credit rating and whether they are backed by private equity sponsors. We hope you enjoy the 2018 Global High-Yield Study and welcome your feedback and questions. Please feel free to contact any of our attorneys listed inside the front cover.

4

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Overview and Methodology General • Our high-yield database includes approximately 2,000 high-yield deals closed globally from 2011–2017. • Our 2018 Study analyzes trends from 2013–2017. • Data is broken down by geography, deal size, industry, rating and whether sponsor-backed. Methodology • Outliers that were three or more standard deviations away from the mean for any given data set were excluded from our calculations. • In circumstances where less than 1% of reviewed transactions contained a specific term, such term was excluded from our calculations. • Deals in the sample population with only a pledge of stock are not considered to be secured deals for purposes of this study. In addition, for purposes of identifying lien priorities, deals with “super priority” payment rights are not considered to have lien priority. • Certain deals that were reviewed also included high-yield rated bonds with investment-grade or hybrid covenant packages. These deals have been excluded for purposes of our covenant analysis. • Final and preliminary offering memorandums were included in the analysis. Allocation • In geographic analysis, Canada is included in the U.S. data, Australia is included in the Asia data and issuers operating in the Caribbean are included in the Latin America data. • In industry breakdown, deals in the sample population are categorized as follows: - Issuers in the power and mining industries are included in our Industrials category. - Service providers to the oil & gas industry are included in our Oil & Gas category.

5

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Overview and Methodology Financial Metrics • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is based on the applicable issuer’s trailing four quarters (or last 12 months, if applicable) of EBITDA disclosed in the relevant marketing materials. • Total assets calculations are based upon the total assets of the applicable issuer as set forth in the most current balance sheet data disclosed in the relevant marketing materials. • References to EBITDA include "Adjusted EBITDA" when the relevant marketing materials contained such presentations and “Pro Forma EBITDA/Adjusted EBITDA” when such metrics were presented. Ratings • All ratings categories are based on credit ratings by Standard & Poor’s. • Calculations based solely on rating exclude deals that were not rated. • The rating categories do not distinguish “+” or “–” signs within a ratings category.

6

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Glossary 6% IPO Proceeds: A basket permitting restricted payments of up to 6% (or more) of the proceeds received from an IPO. 103% Redemption: The ability of the issuer to call up to 10% of notes per year at 103% of par during the non-call period. Cash Flow-Based: With respect to the restricted payments builder basket, a restricted payments test based on EBITDA minus a multiple of interest expense. Change of Control Portability: The bondholders’ change of control put right is only triggered if, after giving effect to the transaction, both a change of control and an additional negative event occurs (such as a failure by the issuer to meet a specified leverage ratio test or a reduction in the rating of the notes). Contribution Indebtedness: A basket permitting debt in an amount equal to 100% (or more) of the amount of proceeds received from equity issuances or cash contributions to equity capital. Covenant Fall Away: Certain covenants are permanently removed upon the issuer’s achievement of investment-grade ratings. Covenant Suspension: Certain covenants are suspended upon the issuer’s achievement of investment-grade ratings, but reinstated if the issuer’s ratings are subsequently downgraded to non-investment-grade. Designated Non-Cash Consideration: For purposes of satisfying the cash consideration test for asset sales, the ability to treat a certain amount of non-cash consideration as if it were cash. EBITDA: Earnings before interest, taxes, depreciation and amortization. Equity Claw: The ability of the issuer to call a certain percentage of bonds with the proceeds of certain equity issuances during the noncall period.

7

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Glossary • Excluded Contributions: A basket permitting restricted payments equal to the amount of proceeds received from equity issuances or cash contributions to equity capital that are designated by the issuer as “excluded contributions” and are not subject to the conditions required to utilize the restricted payments builder basket, including being within the applicable debt incurrence ratio. • FCCR (Fixed Charge Coverage Ratio): Generally EBITDA divided by fixed charges. • Leverage Ratio: Generally debt divided by EBITDA. • Net Income-Based: With respect to the restricted payments builder basket, a restricted payments test based on 50% of consolidated net income. • Ratio Debt Condition: With respect to mergers and consolidations, whether the issuer must meet the debt incurrence ratio test on a pro forma basis, or if such ratio must only improve or be no worse on a pro forma basis. • Secured Leverage Grower: A basket permitting unlimited liens on debt subject to a pro forma secured leverage test. • Unlimited Leverage-Based Restricted Payments: A basket permitting unlimited restricted payments subject to a pro forma leverage test.

8

Overview


Call Protection


Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


2017 Global High-Yield Market % of Deal Count

53%

'13

47% 46% 42% 39% '14

'15

'16

'17

30% 30% 35% 33% 34% '13

'14

'15

'16

'17

20% 13% 19% 16% 19% '13

4%

4% 4% 6% 7%

'13

'14

'15

'16

'17

Source: Prospect News (all countries, all currencies)

9

'14

'15

'16

'17

Collateral

Events of Default

Overview

Call Protection


Debt


Liens

Categories of Analysis • Geography - U.S./Canada - Europe, Middle East and Africa (EMEA) - Asia - Latin America • Size of Deal - Small: $0–$200 million - Medium: $201–$499 million - Large: $500 million+ • Industry - Consumer - Financial Services - Health Care - Real Estate/Gaming - Industrials - Oil & Gas - Technology, Media and Telecommunications (TMT) • Ratings - BB - B - CCC • Sponsor vs. Non-Sponsor

10


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Call Protection

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


103% Redemption % of Deals Global 2017

Global % of Deals with 103% Redemption 25%

11%

35% from ‘16 20%

15%

10%

5-Year Average = 10%

5%

89% 0%

With 103% Redemption Without 103% Redemption

12

2013

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection



Debt

Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

103% Redemption % of Deals with 103% Redemption Deal Size

Geography

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5% ----

0% U.S.

EMEA

------Asia

----

13

Indicates no reviewed deals contained term

0% Small

Latin America

2013 -----

----

2014

2015

2016

Medium

2017

Large

Events of Default

Overview

Call Protection


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

103% Redemption % of Deals with 103% Redemption Industry 40%

35%

30%

25%

20%

15%

10%

5% ----

0% Consumer

-----

Financial Services

----Health Care

2013 -----

14


-----

-----

Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

103% Redemption % of Deals with 103% Redemption Ratings 30%

25%

20%

15%

10%

5-Year Average = 13% 5-Year Average = 8.4%

5-Year Average = 5.9%

5% ------0% BB

B

2013 -----

15


2014

CCC

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


103% Redemption % of Deals with 103% Redemption Sponsor

Non-Sponsor 33% from ‘16

30%

30%

25%

25%

20%


20%

15%

15%

10%

10%

5%

5%

0%

0%


2013

16

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


103% Redemption % of Secured Deals with 103% Redemption Global Global 2017

% of Secured Deals with 103% Redemption 40% 35% 30%

23%

25%


20% 15% 10% 5% 0%

2013

2014

2016

2017

Global

40%

77%

2015

35%

% of Unsecured Deals with 103% Redemption

30% 25% 20%

With 103% Redemption Without 103% Redemption

15% 10% 5% 0%

2013

17

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

103% Redemption % of Secured Deals with 103% Redemption Geography 31% from ‘16

% of Secured Deals with 103% Redemption 40%

35%

30%

25%

20%

15%

10%

5%

0% U.S.

EMEA

2013

18

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Equity Claw % of Deals

Global

Global 2017

% of Deals Permitting Greater Than 35% 80% 70%

243% from ‘13

60% 50%

43% 40%

57% 30% 20% 10% 0%

Permits up to 35% Permits greater than 35%

19

2013

2014

2015

2016

2017

Events of Default

Overview

Call Protection



Debt


Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Events of Default

Equity Claw % of Deals Permitting Greater than 35% Geography

Deal Size

231% from ‘13

100%

100%

80%

298% from ‘13

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% -----

0% U.S.

EMEA

Asia

20


0% Small

Latin America

2013 -----

200% from ‘13

90%

90%

2014

2015

2016

Medium

2017

Large

Overview

Call Protection


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Equity Claw % of Deals Permitting Greater than 35% Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% -----

0% Consumer

Financial Services

Health Care

2013 -----

21


Real Estate/Gaming

2014

2015

Industrials

2016

2017

-----

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant


Registration Rights

Equity Claw % of Deals Permitting Greater than 35% Ratings 95% from ‘13

80%

70% 5-Year Average = 60% 60%

50%

40%

5-Year Average = 41% 5-Year Average = 32%

30%

20%

10%

0% BB

B

2013

22

2014

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Equity Claw % of Deals Permitting Greater than 35% Non-Sponsor

Sponsor

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

23

2014

2015

2016

2017

Collateral

Events of Default


Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Change of Control Portability % of Deals

Global 2017

Global

50%

28%

% of Deals With Change of Control Portability

40%

30%

20%

72% 10%

0%

With Change of Control Portability Without Change of Control Portability

26

2014

2015

2016

2017

Events of Default

Call Protection

Overview



Debt

Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Change of Control Portability % of Deals with Change of Control Portability Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% U.S.

EMEA

Asia

Latin America

2014

27

Small

2015

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Change of Control Portability % of Deals with Change of Control Portability Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2014

28

Real Estate/Gaming

2015

2016

Industrials

2017

Oil & Gas

TMT

Events of Default

Overview


Call Protection

Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Change of Control Portability % of Deals with Change of Control Portability Ratings 100% 90% 80% 70% 60% 50% 40%

350% from ‘14 30% 20% 10% 0% BB

B

2014

29

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights

Change of Control Portability % of Deals with Change of Control Portability Non-Sponsor

Sponsor 100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2014

30

2015

2016

2017


Collateral

Events of Default

Debt

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt % of Deals Global 2017

Global

100%

13% 90%

5-Year (FCCR) Average = 78%

80% 70%

11%

60% 50% 40% 30% 20%

76%

10% 0% 2013

FCCR

32

Leverage

2014

Both

2015

2016

2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


FCCR 2013

2014

2015

2016

2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015


2013

Both

Asia

33

Leverage

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2016

2017

2014

2015

2016

2017

Latin America 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Deal Size Breakdown Small

Medium

100%

100%

90%

90%

Large

100% 5-Year (FCCR) Average = 80%

90%

70%

5-Year 80% (FCCR) Average = 72% 70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

80%

0%

70%

0%

0% 2013

2014

2015

2016

2017

2013

2014

FCCR

34


80%

2015

2016

2013

2017

Leverage

Both

2014

2015

2016

2017

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017


2013 2014 2015 2016 2017

Oil & Gas 5-Year (FCCR) Average = 85%

FCCR

35

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

Industrials

Real Estate/Gaming

Health Care

Financial Services 5-Year (FCCR) Average = 86%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year (FCCR) Average 100% 90% = 94%

TMT

80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Leverage

Both


2013 2014 2015 2016 2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Ratings Breakdown BB

B

100%

100%

90%

90% 5-Year (FCCR) Average = 79%

80% 70%

CCC

100% 90% 5-Year (FCCR) Average = 76%

80% 70%

80% 70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0% 2013

2014

2015

2016

2017

2013

FCCR

36

2014

2015

2016

Leverage

2017

Both


0% 2013

2014

2015

2016

2107

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%


80%


80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

2016

2017

FCCR

37

90%

2013

Leverage

Both

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt % of Deals Global 2017

Global

100% 90% 5-Year (FCCR of 2x) Average = 79%

80%

30%

70% 60% 50% 40%

70%

30% 20% 10% 0% 2013

FCCR of 2x

38

2014

FCCR of >2x

2015

2016

2017

Call Protection

Overview



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Ratio Debt Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year (FCCR of 2x) Average = 85%

2013

2014

2015

2016

2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

39

2015

2013

FCCR of 2x


2014


FCCR of >2x

Asia

2013

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2016

2017

2014

2015

2016

2017

Latin America

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant


Registration Rights

Collateral

Events of Default

Ratio Debt Deal Size Breakdown Small

Medium

Large

100%

100%

100%

90%

90%

90% 5-Year (FCCR of 2x) Average 80% = 79%

70%

5-Year (FCCR of 2x) 80% Average = 73% 70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

80%

0%

70%

0% 2013

2014

2015

2016

2017

0% 2013

2014

FCCR of 2x

40


2015

2016

2017

FCCR of >2x

2013

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Real Estate/Gaming 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%



100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


FCCR of 2x

41

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Oil & Gas

Industrials 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Health Care

Financial Services 5-Year (FCCR of 2x) Average = 87%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

FCCR of >2x


TMT 5-Year (FCCR of 2x) Average = 51%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


Call Protection

Overview


Debt



Liens

Asset Sales

Merger Covenant


Registration Rights

Collateral

Events of Default

Ratio Debt Ratings Breakdown BB

B

CCC

100%

100%

100%

90%

90%

90%

80%

5-Year (FCCR of 2x) 80% Average = 76%

5-Year (FCCR of 2x) 80% Average = 78%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0%

0% 2013

2014

2015

2016

2017

2013

2014

2015

FCCR of 2x

42


2016

2107

FCCR of >2x

2013

2014

2015

2016

2017

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Sponsor Breakdown Sponsor

Non-Sponsor

100%

100% 5-Year (FCCR of 2x) Average = 87%

90% 80%

90%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

2016

2017

FCCR of 2x

43


80%

2013

FCCR of >2x

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Senior Credit Facilities Basket Global Analysis

450%

% of Issuer's EBITDA

% of Issuer's Assets

60% 55%

400%

50% 350%

45% 40%

300% 5-Year Average = 242%

250% 200%


30% 25% 20%

150%

15%

100%

10% 50%

5% 0%

0%

2013

44

2014

2015

2016

2017

Call Protection

Overview



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Senior Credit Facilities Basket Geographic Breakdown % of Issuer's EBITDA

450%


60% 55%

400%

50% 350%


300%


40% 35%


200%

30%


25% 20%

150%

15%

100%

10% 50%

5% 0%

0% U.S.

EMEA

Asia

2013

45

U.S.

Latin America

2014

2015

2016

EMEA

2017

Asia

Latin America

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Senior Credit Facilities Basket Deal Size Breakdown % of Issuer's EBITDA

450%


60% 55%

400%

50% 350%

45% 40%

300%

35%

250%

30% 200%

25% 20%

150%

15%

100%

10% 50%

5% 0%

0% Small

Medium

2013

46

Small

Large

2014

2015

2016

Medium

2017

Large

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Senior Credit Facilities Basket Industry Breakdown

450%



60% 55%

400%

50% 350%

45%

300%

40% 35%

250%

30% 200%

25%

150%

20% 15%

100%

10% 50%

5%

0%

0%

2013

47

2014

2015

2016

2017

Collateral

Events of Default


Call Protection

Overview

Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Senior Credit Facilities Basket Ratings Breakdown % of Issuer's EBITDA

% of Issuer's Assets 60%

450%

55%

400%

50% 350%

45% 40%

300%

35%

250%

30% 200%

25% 20%

150%

15%

100%

10% 50%

5% 0%

0% BB

B

2013

48

BB

CCC

2014

2015

2016

B

2017

CCC

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Senior Credit Facilities Basket Sponsor Breakdown

450%

Sponsor


400% 350%


300% 250% 200% 150% 100% 50% 0%


60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%


Non-Sponsor 450% 400% 350% 300%


250% 200% 150% 100% 50% 0%

2013

49

2014

60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

2015


2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Contribution Indebtedness % of Deals Global

Global 2017

% of Deals with Basket

100% 90% 80% 70% 60%

43% 57%


40% 30% 20% 10% 0%

2013 With Basket Without Basket

50

2014

2015

2016

2017

Call Protection

Overview



Debt


Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Contribution Indebtedness % of Deals with Basket Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% ----

0% U.S.

EMEA

Asia

51


2014



0% Small

Latin America

2013 -----

----


2015

2016

Medium

2017

Large

Events of Default

Call Protection

Overview


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Contribution Indebtedness % of Deals with Basket Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

52

Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Contribution Indebtedness % of Deals with Basket Ratings 100% 90% 80% 70% 5-Year Average = 62%

60% 50% 5-Year Average = 40%


30% 20% 10% 0% BB

B

2013

53

2014

CCC

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Contribution Indebtedness % of Deals with Basket Non-Sponsor

Sponsor

100%

100%

90%

90%

80%


70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

54

2014

2015


2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Purchase Money/Capital Lease Debt Basket Global Analysis % of Issuer's EBITDA


45%

7%

40% 6% 35% 5% 30% 5-Year Average = 25%

25% 20%

4% 5-Year Average = 3.0%

3%

15% 2% 10% 1%

5% 0%

0%

2013

55

2014

2015

2016

2017

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Purchase Money/Capital Lease Debt Basket Geographic Breakdown % of Issuer's EBITDA

50%

% of Issuer's Assets 10%

45%

9%

40%


35% 30%

7%


6%

25%

5%

20%

4%

15%

3%

10%


2%

5%

1%

0% U.S.

EMEA

Asia

Latin America

2013

56


2014

0% U.S.

2015

2016

EMEA

2017

Asia

Latin America

Overview

Call Protection


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Events of Default

Purchase Money/Capital Lease Debt Basket Deal Size Breakdown % of Issuer's EBITDA


50%

7%

45% 6% 40% 5-Year Average = 27%

35% 30%

5%




25% 20% 15%



3%

2%

10% 1% 5% 0%

0% Small

Medium

Large

2013

57

Small

2014

2015

2016

Medium

2017

Large

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Purchase Money/Capital Lease Debt Basket Industry Breakdown

50%



7%

45% 6% 40% 5%

35% 30%

4%

25% 3%

20% 15%

2%

10% 1% 5% 0%

0%

2013

58

2014

2015

2016

2017

Collateral

Events of Default


Call Protection

Overview


Debt

Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Events of Default

Purchase Money/Capital Lease Debt Basket Ratings Breakdown % of Issuer's EBITDA

45%


7%

40%

6%

35% 30%




5%

25%

4%

20%

3%




15% 2% 10% 1% 5% 0%

0% BB

B

2013

59

BB

CCC

2014

2015

2016

B

2017

CCC

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Purchase Money/Capital Lease Debt Basket Sponsor Breakdown

45%

Sponsor



7%

40%

6%


30% 25% 20%


4% 3%

15%

2%

10% 5%

1%

0%

0%

Non-Sponsor 45%

7%

40%

6%

35% 30%


25% 20%

5% 4%


3%

15% 2%

10% 5%

1%

0%

0%

2013

60

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

General Debt Basket Global Analysis % of Issuer's EBITDA


6%

50% 45%

5% 40% 5-Year Average = 33%

35%


4%

30% 3%

25% 20%

2% 15% 10%

1%

5% 0%

0%

2013

61

2014

2015

2016

2017

Call Protection

Overview



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

General Debt Basket Geographic Breakdown % of Issuer's EBITDA

50% 45% 40%

6%


5%


35% 30%


4%

3%

25% 20%

2% 15% 10%

1%

5% 0%

0% U.S.

EMEA

Asia

2013

62

U.S.

Latin America

2014

2015

2016

EMEA

2017

Asia

Latin America

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

General Debt Basket Deal Size Breakdown % of Issuer's EBITDA

50% 45% 40%




6%


5%

35%




4%

30% 3%

25% 20%

2% 15% 10%

1%

5% 0%

0% Small

Medium

2013

63

Small

Large

2014

2015

2016

2017

Medium

Large

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


General Debt Basket Industry Breakdown

50%



6%

45% 5%

40% 35%

4%

30% 25%

3%

20% 2%

15% 10%

1%

5% 0%

0%

2013

64

2014

2015

2016

2017

Collateral

Events of Default


Call Protection

Overview

Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

General Debt Basket Ratings Breakdown % of Issuer's EBITDA

50%

7%

45% 40% 35%





6%

5%

30%



BB

B


4%

25% 3%

20% 15%

2%

10% 1% 5% 0%

0% BB

B

CCC

2013

65

2014

2015

2016

2017

CCC

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

General Debt Basket Sponsor Breakdown Sponsor 50%



6%


40% 35%


5% 4%

30% 3%

25% 20%

2%

15% 10%

1%

5% 0%

0%

Non-Sponsor 6%

50% 45% 40%


35% 30%


4% 3%

25% 20%

2%

15% 10%

1%

5% 0%

0%

2013

66

2014

2015

2016

2017


Overview

Call Protection


Debt

Restricted Payments/ Investments

Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Restricted Payments General Build-Up % of Deals Global 2017

Global

100% 5-Year Average (Net IncomeBased) = 88%

90%

7%

80% 70% 60% 50% 40% 30%

93%

20% 10% 0% 2013

Net Income-Based

68

2014

Cash Flow-Based

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Restricted Payments General Build-Up Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year Average (Net IncomeBased) = 84%

2013

2014

2015

2016

2017

2013

Net Income-Based Cash Flow-Based

Asia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

69

2014

2015


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2016

2017

2014

2015

2016

2017

Latin America 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant


Registration Rights

Collateral

Events of Default

Restricted Payments General Build-Up Deal Size Breakdown Small

Medium

100%


90% 80%

Large

100%

100% 5-Year Average (Net IncomeBased) = 87%

90% 80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0% 2013

2014

2015

2016

2017

0% 2013

2014

2015

Net Income-Based

70


90%

2016

2017

Cash Flow-Based

2013

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Restricted Payments General Build-Up Industry Breakdown Consumer

Financial Services 5-Year Average (Net IncomeBased) = 96%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Real Estate/Gaming

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Industrials 5-Year Average (Net IncomeBased) = 98%

2013 2014 2015 2016 2017

Net Income-Based

71

2013 2014 2015 2016 2017

TMT

Oil & Gas

50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

5-Year 100% Average 90% (Net 80% Income70% Based) 60% = 84%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Health Care 5-Year Average (Net IncomeBased) = 97%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year 100% Average 90% 80% (Net Income- 70% Based) 60% = 84% 50%


40% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Cash Flow-Based

2013 2014 2015 2016 2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Restricted Payments General Build-Up Ratings Breakdown BB

B

100%

CCC 100%

100%

90%


80% 70%


90% 80%

90% 80%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0%

0% 2013

2014

2015

2016

2017

2013

2014

2015

Net Income-Based

72


2016

2017

Cash Flow-Based

2013

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Merger Covenant

Asset Sales


Registration Rights

Collateral

Restricted Payments General Build-Up Sponsor Breakdown Sponsor

Non-Sponsor 5-Year Average (Net IncomeBased) = 94%

100% 90% 80%

100%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

2016

2017

Net Income-Based

73


90%

2013

2014

Cash Flow-Based

2015

2016

2017

Events of Default

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Excluded Contributions % of Deals Global 2017

Global % of Deals with Basket

100% 90% 80% 70% 60%


50%

57% 43%

40% 30% 20% 10% 0%

2013 With Basket

74

Without Basket

2014

2015

2016

2017

Events of Default

Call Protection

Overview



Debt

Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Excluded Contributions % of Deals with Basket Geography

Deal Size

100%

100%

90%


80% 70% 60%

80%


70% 60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% ---------

0% U.S.

EMEA

Asia

2013 -----

75


0%

Latin America

2014

Small

2015

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Excluded Contributions % of Deals with Basket Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

76

Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Events of Default

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Excluded Contributions % of Deals with Basket Ratings 100% 90%

62% from ‘13

80%



60% 50%


40% 30% 20% 10% 0% BB

B

2013

77

2014

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Excluded Contributions % of Deals with Basket Sponsor

Non-Sponsor 5-Year Average = 81%

100% 90%

100% 90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

78

2014

2015


2016

2017

Overview


Call Protection

Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

6% IPO Proceeds % of Deals Global 2017


100% 90% 80% 70% 60%

55% 45%

50%


40% 30% 20% 10% 0%

With Basket

79

Without Basket

2013

2014

2015

2016

2017

Events of Default

Call Protection

Overview



Debt


Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

6% IPO Proceeds % of Deals with Basket Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% -------

0% U.S.

EMEA

Asia

----

80


0%

Latin America

2013 -----

-----

2014

Small

2015

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

6% IPO Proceeds % of Deals with Basket Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

81

Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

6% IPO Proceeds % of Deals with Basket Ratings 100% 90% 80% 70% 5-Year Average = 61%


50% 40% 5-Year Average = 29%

30% 20% 10% 0% BB

B

2013

82

2014

CCC

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

6% IPO Proceeds % of Deals with Basket Sponsor

Non-Sponsor

100% 90%


90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

83

2014

2015


2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Restricted Payments General Basket % of Issuer's EBITDA Global

Geography

40%

40%

35%

35%

30%

30%

25%


20%


25%

20%

15%

15%

10%

10%

5%

5%

0%

0% U.S.

2013

84

2014

2015

2016

EMEA

2017


Asia

Latin America

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Restricted Payments General Basket % of Issuer's EBITDA Deal Size

Industry

40%

40%

35%

35%

30%


25%



25% 20%

20% 15% 15% 10% 10% 5% 5% 0% 0% Small

Medium

Large

2013

85

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Restricted Payments General Basket % of Issuer's EBITDA Ratings 40%

35%

30%




25%

20%

15%

10%

5%

0% BB

B

2013

86

2014

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Restricted Payments General Basket % of Issuer's EBITDA Sponsor

Non-Sponsor

40%

40%

35%

35%

30%

25%

30%


25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

0%

2013

87


2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Permitted Investments General Basket Global Analysis % of Issuer's EBITDA

50%

10%

45%

9%

40%

8%

35% 30%

7%


6% 5%

25% 20%

4%

15%

3%

10%

2%

5%

1%

0%

0%

2013

88


2014

2015


2016

2017

Collateral

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Permitted Investments General Basket Geographic Breakdown % of Issuer's EBITDA

50%

10% 9%

45% 40% 35%

8%



30% 25%

6% 5%

20%

4%

15%

3%

10%

2%

5%

1%



0%

0% U.S.

EMEA

Asia

U.S.

Latin America

2013

89


2014

2015

2016

EMEA

2017

Asia

Latin America

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Permitted Investments General Basket Deal Size Breakdown % of Issuer's EBITDA

50%

10% 9%

45%

8%

40% 35%



30%

7%


6%

25%

5%

20%

4%

15%

3%

10%

2%

5%

1%



Small

Medium


0%

0% Small

Medium

Large

2013

90


2014

2015

2016

2017

Large

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Permitted Investments General Basket Industry Breakdown

50%


10%

45%

9%

40%

8%

35%

7%

30%

6%

25%

5%

20%

4%

15%

3%

10%

2%

5%

1%

0%

0%

2013

91


2014

2015

2016

2017

Collateral

Events of Default


Call Protection

Overview

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Permitted Investments General Basket Ratings Breakdown % of Issuer's EBITDA

50%

10% 9%

45% 40% 35%


30%


8%


7% 6%

25%

5%

20%

4%

15%

3%

10%

2%

5%

1%




0%

0% BB

B

BB

CCC

2013

92


2014

2015

2016

B

2017

CCC

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Permitted Investments General Basket Sponsor Breakdown % of Issuer's EBITDA


Sponsor

50%


45% 40% 35%


4%

30%

3%

25% 2%

20% 15%

1%

10% 5%

0%

0%

Non-Sponsor 50%

7%

45% 6%


35% 30% 25%

4% 3%

20% 15%

2%

10%

1%

5% 0%

0%

2013

93


5%

2014

2015

2016

2017

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Unlimited Leverage-Based Restricted Payments % of Deals Global Global 2017

% of Deals with Basket 80%

19% from ‘16

70%

60%

50%

51%

49% 40%

30%

20%

10%

0%

With Basket

Without Basket 2014

94

2015

2016

2017

Events of Default

Call Protection

Overview



Debt


Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Unlimited Leverage-Based Restricted Payments % of Deals with Basket Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% --------

0% U.S.

EMEA

Asia

-------------

2014 -----

95


0%

Latin America

2015

Small

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Unlimited Leverage-Based Restricted Payments % of Deals with Basket Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2014

96

Real Estate/Gaming

2015

2016

Industrials

2017

Oil & Gas

TMT

Events of Default

Overview


Call Protection


Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Unlimited Leverage-Based Restricted Payments % of Deals with Basket Ratings

225% from ‘14

80%

70%

60%

50%

40%

30%

20%

10%

0% BB

B

2014

97

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Unlimited Leverage-Based Restricted Payments % of Deals with Basket Non-Sponsor

Sponsor 80%

70%

80%

72% from ‘14

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2014

98

35% from ‘16

70%

2015

2016

2017

Events of Default

Liens

Overview


Call Protection


Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Secured Leverage Grower % of Deals Global 2017


100% 90% 80% 70%

69%

60%


50% 40%

31%

30% 20% 10% 0%

With Basket

100

Without Basket

2013

2014

2015

2016

2017

Call Protection

Overview


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured Leverage Grower % of Deals with Basket Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% ----

0% U.S.

EMEA

-----

Asia

2013 -----

101

0%

Latin America


2014

Small

2015

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured Leverage Grower % of Deals with Basket Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% -----

0% Consumer

Financial Services

Health Care

2013

102

2014

Real Estate/Gaming

2015

2016

Industrials

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured Leverage Grower % of Deals with Basket Ratings 100% 90% 80%

40% from ‘16

70% 60% 50% 40%




30% 20% 10% 0% BB

B

2013

103

2014

2015

CCC

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured Leverage Grower % of Deals with Basket Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80%

70% 60%

70%


60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

104

2014

2015

2016


2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

General Permitted Lien Basket % of Total Assets Global

Geography

4%

4%



3%

3%

2%

2%

1%

1%

0%

0%


U.S.

2013

105

2014

2015

2016

EMEA

2017

Asia

Latin America

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


General Permitted Lien Basket % of Total Assets Deal Size

Industry

4%

4%

3%

3%

2%

2%

1% 1%

0% 0% Small

Medium

Large

2013

106

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

General Permitted Lien Basket % of Total Assets Ratings 4%


3%



2%

1%

0% BB

B

2013

107

2014

2015

CCC

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

General Permitted Lien Basket % of Total Assets Sponsor

Non-Sponsor

4%

4%


3%

2%

2%

1%

1%

0%

0%

2013

108

2014


3%

2015

2016

2017

Events of Default


Overview


Call Protection


Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Fairness Opinion Requirement % of Deals Global

Global 2017

% of Deals with Fairness Opinion Requirement 100% 90% 80% 5-Year Average (with requirement) = 47%

70% 60%

48%

50%

52% 40% 30% 20% 10% 0%

With Requirement

110

Without Requirement

2013

2014

2015

2016

2017

Events of Default

Call Protection

Overview


Debt


Liens

Asset Sales


Merger Covenant

Registration Rights


Collateral

Fairness Opinion Requirement % of Deals with Fairness Opinion Requirement Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% U.S.

EMEA

Asia

Latin America

2013

111

2014

Small

2015

2016

2017

Medium

Large

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Fairness Opinion Requirement % of Deals with Fairness Opinion Requirement Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

112

2014

Real Estate/Gaming

2015

2016

Industrials

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Fairness Opinion Requirement % of Deals with Fairness Opinion Requirement Ratings 100% 90% 80% 70% 60% 50%




40% 30% 20% 10% 0% BB

B

2013

113

2014

2015

CCC

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Fairness Opinion Requirement % of Deals with Fairness Opinion Requirement Non-Sponsor

Sponsor 100%

100%

90%

90%

80%

80%

70%

70%

60%


50% 40%

50% 40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

114

2014


2015

2016

2017

Events of Default

Asset Sales

Overview


Call Protection

Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Reinvestment Period % of Deals Global 2017

Global

100%

1%

5-Year Average (360-365 Days) = 83%

90% 80% 70%

20%

60% 50% 40% 30%

79%

20% 10% 0% 2013

365 Days

2015

2016

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant


Registration Rights

Collateral

Events of Default

Reinvestment Period Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


360 Days

Asia

117

360–365 Days

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2016

2017

2015

2016

2017

Latin America 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Reinvestment Period Deal Size Breakdown Small

Medium

Large

100%

100% 5-Year Average (360-365 Days) = 85%

90% 80%

100%

90%


80%

90%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0% 2013

2014

2015

2016

2017

70%

0% 2013

365 Days

2014

2015

2016

2017

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Reinvestment Period Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

Real Estate/Gaming


2013 2014 2015 2016 2017

2013 2014 2015 2016 2017


2013 2014 2015 2016 2017

365 Days


2013 2014 2015 2016 2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Reinvestment Period Ratings Breakdown BB

B

100%

CCC 100%


90% 80%

90%


80%

90% 80%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0% 2014

2015

2016

2017


0%

0% 2013

2013

365 Days

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Reinvestment Period Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%

90%

80%


70% 60%

70% 60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

2016

2017

365 Days

2014

2015

2016

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Designated Non-Cash Consideration % of Deals Global 2017

Global % of Deals with Carve-out 100% 90% 5-Year Average = 70%

80% 70%

71%

60% 50% 40%

29%

30% 20% 10% 0%

2013 With Carve-out

122

Without Carve-out

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt



Liens

Merger Covenant

Asset Sales

Registration Rights


Collateral

Designated Non-Cash Consideration % of Deals with Carve-out Geography

Deal Size

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% ----

0% U.S.

EMEA

Asia

-----

123


0%

Latin America

2013

2014




Small

2015

2016

Medium

2017

Large

Events of Default

Call Protection

Overview


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Designated Non-Cash Consideration % of Deals with Carve-out Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

124

Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Designated Non-Cash Consideration % of Deals with Carve-out Ratings 100% 5-Year Average = 81%

90% 80%



70% 60% 50% 40% 30% 20% 10% 0% BB

B

2013

125

2014

2015

CCC

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Designated Non-Cash Consideration % of Deals with Carve-out Sponsor 100% 90%

Non-Sponsor


100% 90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

126

2014

2015


2016

2017

Collateral

Events of Default

Merger Covenant

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Ratio Debt Condition % of Deals Global Global 2017

% of Deals Ratio No Worse or Improves

27%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

23% from ‘16

5-Year Average (Ratio No Worse or Improves) = 83%

73%

% of Deals Must Meet Ratio Test

Must Meet Ratio Test

Ratio No Worse or Improves

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

462% from ‘16 5-Year Average (Must Meet Ratio) = 17%

2013

128

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Condition Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year Average (Must Meet Ratio) = 15%

2013

2014

2015

2016

2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%



2013

2014

2015

2016

2017


Asia

Latin America

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

129

2014

2015

2016

2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Call Protection

Overview


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Condition Deal Size Breakdown Small

Medium

Large

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%


20% 10% 0%

30%


20% 10% 0%

2013

2014

2015

2016

2017


20% 10% 0%

2013

2014

2015


130

30%

2016

2017

2013

2014


2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Condition Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

100% 90% 80% 70% 60% 50% 5-Year 40% Average (Must Meet 30% 20% Ratio) 10% = 15% 0% 2013 2014 2015 2016 2017




2013 2014 2015 2016 2017

Oil & Gas

Industrials 100% 90% 80% 5-Year 70% Average 60% (Must 50% 40% Meet 30% Ratio) 20% = 15% 10% 0% 2013 2013 2014 2015 2016


131

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

100% 90% 80% 5-Year 70% Average 60% (Must 50% 40% Meet 30% Ratio) 20% = 23% 10% 0% 2013 2014 2015 2016 2017

Health Care

Financial Services

TMT 100% 90% 80% 70% 60% 5-Year 50% Average 40% (Must 30% Meet 20% 10% Ratio) 0% = 13%

2013 2014 2015 2016 2017



2013 2014 2015 2016 2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Condition Ratings Breakdown BB

B

CCC

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40% 5-Year Average (Must Meet Ratio) = 19%

30% 20% 10%


30% 20%

2014

2015

2016

2017

2013

2014

2015


132

20%

0%

0% 2013

30%

10%

10%

0%


2016

2017

2013


2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Ratio Debt Condition Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40% 5-Year Average (Must Meet Ratio) = 11%

30% 20% 10%

30% 20% 10% 0%

0% 2013

2014

2015

2016

2017


133


2013

2014

2015


2016

2017

Registration Rights

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights

Registration Rights % of Deals U.S.

Private-for-Life: 91% from ‘13 100% 90% 80% 70%

5-Year Average (Private-forLife) = 59%

60% 50% 40% 30% 20% 10% 0% 2013

Private-for-Life

136

2014

2015

Registered

2016

2017

Registration Rights


Collateral

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Registration Rights Geographic Breakdown EMEA 5-Year Average (Private-for-Life) = 96%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Private-for-Life Registered Registration Rights

2013

2014

2015

2016

2017

Asia

Latin America 5-Year Average (Private-for-Life) = 99%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013

137

2014

2015

2016

2017

5-Year Average (Private-for-Life) = 90%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013

2014

2015

2016

2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Registration Rights U.S. Deal Size Breakdown Medium

Small

Large

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

60%

40%

60% 5-Year Average (Private-for-Life) 50% = 48% 40%

70% 5-Year Average (Private-for-Life) 60% = 61% 50%

30%

30%

30%

20%

20%

20%

10%

10%

10%

50%

0%

40%

0% 2013

2014

2015

2016

2017

0% 2013

Private-for-Life

138

5-Year Average (Private-for-Life) = 57%

2014

2015

2016

Registered

2017

Registration Rights

2013

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Registration Rights U.S. Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5-Year Average (Privatefor-Life) = 61%

2013 2014 2015 2016 2017


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013 2014 2015 2016 2017

100% 90% 80% 5-Year Average 70% (Private- 60% for-Life) 50% 40% = 70% 30% 20% 10% 0% 2013 2014 2015 2016 2017


Oil & Gas

Industrials

Private-for-Life

139

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

100% 90% 80% 5-Year Average 70% (Private- 60% for-Life) 50% 40% = 56% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Health Care

Financial Services

TMT 100% 90% 80% 70% 60% 5-Year Average 50% (Private- 40% for-Life) 30% 20% = 36% 10% 0%

2013 2014 2015 2016 2017

Registered

Registration Rights


2013 2014 2015 2016 2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Registration Rights U.S. Ratings Breakdown BB

CCC

B

Private-for-Life: 95% from ‘13

Private-for-Life: 205% from ‘13 100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

60%

60% 5-Year Average (Privatefor-Life) = 43%

50% 40%


50%

70% 60% 50%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0%

0% 2013

2014

2015

2016

2017

2013

Private-for-Life

140


2014

2015

2016

Registered

2017

2013

Registration Rights

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Registration Rights U.S. Sponsor Breakdown Non-Sponsor

Sponsor

100%

100% 90%


80% 70%

90% 80% 70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% 0%

0% 2013

2014

2015

2016

2013

2017

Private-for-Life

141


Registered

2014

2015

Registration Rights

2016

2017


Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Covenant Suspension / Fall Away % of Deals Global

Global 2017 100% 90% 80%

85% 70% 60% 50% 40% 30% 20%

12%

10%

3% 0% 2013

Fall Away

144

Suspension

2014

Neither

2015

2016

2017

Events of Default

Call Protection

Overview



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Covenant Suspension / Fall Away Geographic Breakdown EMEA

U.S. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Fall Away 2013

2014

2015

2016

2017

2013

Neither

Asia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2014

2015

2016

2017

Latin America 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013

145

Suspension

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2014

2015

2016

2017

2013

2014

2015

2016

2017

Events of Default

Call Protection

Overview


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Covenant Suspension / Fall Away Deal Size Breakdown Small 100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0% 2013

2014

2015

2016

2017

0% 2013

2014

Fall Away

146

Large

Medium

2015

2016

2017

Suspension

2013

Neither

2014

2015

2016

2017

Events of Default

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Covenant Suspension / Fall Away Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017


2013 2014 2015 2016 2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Fall Away

147

2013 2014 2015 2016 2017

Oil & Gas

Industrials 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

Health Care

Financial Services

TMT 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2013 2014 2015 2016 2017

Suspension

Neither

2013 2014 2015 2016 2017

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Covenant Suspension / Fall Away Ratings Breakdown BB

B

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0%

0%

0% 2013

2014

2015

2016

2017

2013

Fall Away

148

CCC

2014

2015

2016

Suspension

2017

Neither

2013

2014

2015

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Covenant Suspension / Fall Away Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10% 0%

0% 2013

2014

2015

2016

Fall Away

149

2013

2017

Suspension

Neither

2014

2015

2016

2017

Events of Default

Collateral

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Secured vs. Unsecured % of Deals Global 2017

Global % of Secured Deals

100% 90% 80% 70% 60%

40%


40%

60% 30% 20% 10% 0%

Secured

152

Unsecured

2013

2014

2015

2016

2017

Call Protection

Overview


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured vs. Unsecured % of Secured Deals Geography

Deal Size

100%

100%

90%

90%

80%


70%

70%

60%

60%

50%

50%

40% 30%

40%


30%

20%

20%

10%

10%

0%

0% U.S.

EMEA

Asia

Latin America

2013

153

2014

Small

2015

2016

Medium

2017

Large

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Secured vs. Unsecured % of Secured Deals Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consumer

Financial Services

Health Care

2013

154

Real Estate/Gaming

2014

2015

2016

Industrials

2017

Oil & Gas

TMT

Events of Default

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Secured vs. Unsecured % of Secured Deals Ratings 100% 90% 80% 70% 60% 5-Year Average = 44%

50% 40% 30%



20% 10% 0% BB

B

2013

155

2014

2015

CCC

2016

2017

Collateral

Events of Default

Overview


Call Protection

Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Priority of Collateral Package % of Secured Deals Global 2017

Global

100% 90% 80% 70%

23%

5-Year Average (First Lien) = 61%

60% 50%

12% 65%

40% 30% 20% 10% 0% 2013

First Lien

156

Second Lien

2014

Split Lien

2015

2016

2017

Call Protection

Overview



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Priority of Collateral Package Geographic Breakdown U.S.

EMEA

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


First Lien 2013

2014

2015

2016

Second Lien

2017

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


157

2014

2015


2013

2014

Split Lien

Asia

2013

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2016

2017

2015

2016

2017

Latin America 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Priority of Collateral Package Deal Size Breakdown Small

Medium

Large

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%


50%

5-Year Average 60% (First Lien) = 59% 50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

60% 50%

0%

60%

0% 2013

2014

2015

2016

2017

158

0% 2013

First Lien


2014

2015

2016

Second Lien

2017

2013

Split Lien

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Priority of Collateral Package Industry Breakdown Consumer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

100% 90% 5-Year 80% 70% Average (First Lien) 60% 50% = 66% 40% 30% 20% 10% 0%

100% 90% 80% 5-Year 70% Average (First Lien) 60% 50% = 58% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017


Oil & Gas

Industrials 100% 90% 80% 70% 5-Year 60% Average 50% (First 40% Lien) 30% = 49% 20% 10% 0% 2013 2014 2015 2016 2017

First Lien

159


2013 2014 2015 2016 2017

2013 2014 2015 2016 2017

100% 90% 80% 5-Year 70% Average 60% (First 50% Lien) 40% = 63% 30% 20% 10% 0% 2013 2014 2015 2016 2017

Health Care

Financial Services

TMT 5-Year Average (First Lien) = 69%

2013 2014 2015 2016 2017

Second Lien

Split Lien

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


2013 2014 2015 2016 2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Priority of Collateral Package Ratings Breakdown BB

B

CCC

100%

100%

100%

90%

90%

90%

80%

80%

80%


70%

70%

70% 5-Year Average (First Lien) = 59%

60%

60%

50%

50%

40%

40%

40%

30%

30%

30%

20%

20%

20%

10%

10%

10%

0% 2014

2015

2016

2017

2013

First Lien

160

50%


0%

0% 2013

60%

2014

2015

2016

Second Lien

2013

2017

Split Lien

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Merger Covenant

Asset Sales

Registration Rights


Collateral

Events of Default

Priority of Collateral Package Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80% 5-Year Average (First Lien) = 60%

70% 60%


60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

2016

First Lien

161

70%

2017

2013

Second Lien

2014

Split Lien

2015

2016

2017

Overview

Call Protection



Debt

Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Voting Requirement to Release All or Substantially All Collateral % of Deals Global 2017

Global 100%

10%

8%

90% 80% 70% 60% 50%

32% 39%

40% 30% 20% 10% 0%

10%

Majority

162

2013

66 2/3%

75%

2014

90–95%

2015

100%

2016

2017

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Voting Requirement to Release All or Substantially All Collateral Geographic Breakdown U.S.

EMEA

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0% 2013

2014

2015

Majority

163

2016

0%

2017

66 2/3%

2013

75%

90–95%

2014

100%

2015

2016

2017

Overview

Call Protection



Debt


Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Voting Requirement to Release All or Substantially All Collateral Rating Breakdown BB

B

CCC

100%

100%

100%

90%

90%

90%

80%

80%

80%

70%

70%

70%

60%

60%

60%

50%

50%

50%

40%

40%

40%

30%

30%

20%

20%

10%

10%

30% 20% 10% 0% 2013

2014

2015

2016

Majority

164

2017

0% 2013

66 2/3%

2014

75%

2015

2016

2017

90–95%

0% 2013

100%

2014

2015

2016

2017

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Voting Requirement to Release All or Substantially All Collateral Sponsor Breakdown Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 2013

2014

2015

Majority

165

2016

66 2/3%

2017

2013

75%

90–95%

2014

2015

100%

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Required Percentage to Accelerate % of Deals Global 2017

Global % of Deals with Noteholders Holding 30% of Notes or Greater Required to Accelerate

50%

26% 40%

166% from ‘13 30% 5-Year Average = 18%

20%

74%

10%

0%

25%

168

30%+

2013

2014

2015

2016

2017

Events of Default

Call Protection

Overview



Debt


Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Required Percentage to Accelerate % of Deals with Noteholders Holding at least 30% of Notes Required to Accelerate Geography

Deal Size

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

----

0% U.S.

EMEA

---- ---- ---- ---- ----- ---- ---- ----Asia

-----

169


0%

Latin America

2013

2014

181% from ‘13

Small

2015

2016

Medium

2017

Large

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Required Percentage to Accelerate % of Deals with Noteholders Holding at least 30% of Notes Required to Accelerate Industry 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% -----

0% Consumer

Financial Services

----Health Care

2013 -----

170


Real Estate/Gaming

2014

2015

Industrials

2016

2017

Oil & Gas

TMT

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Required Percentage to Accelerate % of Deals with Noteholders Holding at least 30% of Notes Required to Accelerate Ratings 100% 90% 80% 70% 60% 50% 5-Year Average = 37%

40% 30% 5-Year Average = 17%


10% 0% BB

B

2013

171

2014

CCC

2015

2016

2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Required Percentage to Accelerate % of Deals with Noteholders Holding at least 30% of Notes Required to Accelerate Sponsor

Non-Sponsor

100%

100%

90%

90%

80%

80%

70% 60%

70%

161% from ‘13

60%

50% 40%


40%

30%

30%

20%

20%

10%

10%

0%

0%

2013

172

2014

2015


2016

2017

Overview

Call Protection


Debt



Liens

Asset Sales

Merger Covenant

Registration Rights


Collateral

Events of Default

Cross-Acceleration Threshold % of Total Assets Global

Geography

4%

4%

3%

3%

2%


2%

1%

1%

0%

0% U.S.

2013

173

2014

2015

2016

EMEA

2017

Asia

Latin America

Call Protection

Overview


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Cross-Acceleration Threshold % of Total Assets Deal Size

Industry

4% 4%

3% 3%

2% 2%

1%

1%

0%

0% Small

Medium

Large

2013

174

2014

2015

2016

2017

Collateral

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Cross-Acceleration Threshold % of Total Assets Ratings 4%

3%

2%




1%

0% BB

B

2013

175

2014

2015

CCC

2016

2017

Events of Default

Overview

Call Protection


Debt


Liens


Asset Sales

Merger Covenant

Registration Rights


Collateral

Cross-Acceleration Threshold % of Total Assets Sponsor

Non-Sponsor 4%

4%

3%


2%

2%

1%

1%

0%

0%

2013

176

2014

2015


2016

2017

Events of Default

Thank you A very special thanks to the following Capital Markets & Leveraged Finance Analysts and Staff for their contributions to the 2018 Global High-Yield Bond Study:

Analysts

Anthony McIntyre

James Duong

Marcello Padula

Staff Bruce Davies, Hillary Ledford, Norman Rivera and Jennifer Talbott

177

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