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Issuance & RatIngs MonItoRj a n n e y c o R p o R at e c R e d I tap R I l 24, 2015

JANNEY MONTGOMERY SCOTT

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© 2015 Janney Montgomery Scott LLC

Member: NYSE, FINRA, SIPC

Issuance & RatIngs •

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INfoRmatIoN & DIsclaImeRs

Jody Lurie corporate credit analyst 215 665 6191 [email protected]

see page 4 for important information regarding certifications, our ratings system as well as other disclaimers.

The Issuance & Ratings Monitor is a Friday publication recapping the prior five trading days’ changes in the corporate bond space.

Week of April 17 – 23

• Public corporate new issuance came in at $67.9B for the week versus $39.4B last week, with AT&T’s (Baa1/BBB+/A-) $17.5 billion offering ranking as the third largest in history.

• Investment grade credit spreads were almost 7 basis points and high yield 44 basis points tight of year-end 2014, both modestly tighter than the prior week’s levels.

New Issues: Investment Grade

Source: Janney FISR; FINRA TRACE; Moody’s; S&P; Fitch; ex-144a/REG S/sovereign debt; “*” in chart denotes under review;

Date Issuer Cpn MaturitySpread

+TsySize

($MM)Moody's S&P

23-Apr AT&T FRN Jun-2020 - 750.0 Baa1 BBB+23-Apr AT&T 4.500% May-2035 +190 bps 2,500.0 Baa1 BBB+23-Apr AT&T 3.000% Jun-2022 - 2,750.0 Baa1 BBB+23-Apr AT&T 2.450% Jun-2020 +110 bps 3,000.0 Baa1 BBB+23-Apr AT&T 4.750% May-2046 +215 bps 3,500.0 Baa1 BBB+23-Apr AT&T 3.400% May-2025 +150 bps 5,000.0 Baa1 BBB+23-Apr BNY-Mellon VAR PERPETUAL - 1,000.0 Baa2 A+23-Apr Goldman Sachs 2.000% Aug-2019 - - Baa1 A-23-Apr Wells Fargo 3.900% May-2045 +130 bps 2,000.0 A2 A+22-Apr Citigroup FRN Apr-2018 - 1,000.0 Baa2 A-22-Apr Citigroup 3.300% Apr-2025 +135 bps 1,500.0 Baa2 A-22-Apr Citigroup 1.700% Apr-2018 +92 bps 2,500.0 Baa2 A-22-Apr Harris 2.700% Apr-2020 +130 bps 400.0 Baa3 BBB+22-Apr Harris 4.854% Apr-2035 +220 bps 400.0 Baa3 BBB+22-Apr Harris 5.054% Apr-2045 +240 bps 500.0 Baa3 BBB+22-Apr Harris 1.999% Apr-2018 +110 bps 500.0 Baa3 BBB+22-Apr Harris 3.832% Apr-2025 +185 bps 600.0 Baa3 BBB+

22-AprMercy Healthcare System

3.382% Nov-2025 +140 bps 150.0 A1 NR

21-Apr Goldman Sachs FRN Nov-2023 - 800.0 Baa1 A-21-Apr Goldman Sachs FRN Apr-2020 - 1,300.0 Baa1 A-21-Apr KFW 2.000% May-2025 +14 bps 3,000.0 Aaa AAA21-Apr Stanford University 3.460% May-2047 +88 bps 250.0 Aaa NR20-Apr Autozone 2.500% Apr-2021 +118 bps 250.0 Baa1 BBB20-Apr Autozone 3.250% Apr-2025 +138 bps 400.0 Baa1 BBB20-Apr Citigroup VAR PERPETUAL - 2,000.0 Ba3 A-20-Apr Morgan Stanley 3.950% Apr-2027 +210 bps 2,000.0 Baa3 BBB+

** company is rated investment grade

j a n n e y f i x e d i n c o m e s t r at e g yap r i l 24, 2015


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Source: Janney FISR; FINRA TRACE; Moody’s; S&P; Fitch; ex-144a/REG S/sovereign debt; “*” in chart denotes under review

• Inflows to investment grade funds for the week ending April 22 totaled $1.4B, per Lipper, versus the prior week’s $211MM of inflows. Inflows to high yield funds totaled $162MM versus the prior week’s $792MM of inflows.

Ratings Changes: Investment Grade—Moody’s, S&P, and Fitch

Company Name

DateRtg Type

AgencyCurrRtg

PriorRtg

Industry Type

Allergan 22-Apr Snr Unsec Debt Moody's Baa3 A3*- Specialty PharmaAmerican Water Works 22-Apr Outlook Moody's POS Water BioMed Realty 20-Apr Snr Unsec Debt Moody's Baa2 Baa3 REITCelgene 21-Apr Snr Unsec Debt Moody's Baa1 Baa2 BiotechCoca-Cola 23-Apr Outlook S&P NEG Soft Drink MfgCT Light & Power 23-Apr LT Foreign Issuer S&P A A- Elect NetworksHartford Fin'l Svcs 23-Apr Snr Unsec Debt Moody's Baa2 Baa3 Insurance Hartford Fin'l Svcs 17-Apr LT Local Issuer S&P BBB+ BBB Insurance Kaiser Found’n Health 22-Apr Outlook S&P POS HealthcareKellogg 21-Apr Outlook S&P NEG Snack Food MfgMylan 21-Apr Outlook Moody's DEVELOP Generic PharmaMylan 21-Apr LT Foreign Issuer S&P BBB-* BBB-*- Generic PharmaPublic Service Co of NH 23-Apr LT Foreign Issuer S&P A A- Elect NetworksTeck Resources 17-Apr LT Issuer Default Fitch BBB- BBB Base MetalsTeva Pharma 22-Apr Snr Unsec Debt Fitch BBB+*- BBB+ Specialty PharmaTeva Pharma 21-Apr Outlook Moody's NEG Specialty Pharma

New Issues: High Yield

Date Issuer Cpn MaturitySpread

+TsySize

($MM)Moody's S&P

23-Apr QTS 5.875% Aug-2022 - 300.0 B2 B+22-Apr Washington University 3.790% Oct-2055 +116 bps 131.5 NR NR21-Apr Lennar 4.750% May-2025 - 500.0 Ba3 BB20-Apr Banco BTG Pactual Lux 0.900% Jul-2015 - 3.7 Ba3 NR20-Apr Banco BTG Pactual Lux 1.250% Oct-2015 - 22.4 Ba3 NR17-Apr Pernix Therapeutics 4.250% Apr-2021 - 130.0 NR NR

20-AprNational Rural Util Coop

0.950% Apr-2017 +45 bps 500.0 A2 A

20-Apr Southern Copper 3.875% Apr-2025 +205 bps 500.0 Baa2 BBB20-Apr Southern Copper 5.875% Apr-2045 +340 bps 1,500.0 Baa2 BBB



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Ratings Changes: High Yield—Moody’s, S&P, and Fitch

Company Name

DateRtg Type

AgencyCurrRtg

PriorRtg

Industry Type

Advanced Micro Devices 20-Apr Outlook Fitch NEG SemiconductorsAdvanced Micro Devices 21-Apr LT Corp Family Moody's B3 B2 SemiconductorsAdvanced Micro Devices 21-Apr Outlook Moody's NEG SemiconductorsAdvanced Micro Devices 20-Apr LT Foreign Issuer S&P B- B SemiconductorsAlcatel-Lucent 20-Apr LT Corp Family Moody's B3*+ B3 Networking EquipAlcatel-Lucent 17-Apr LT Foreign Issuer S&P B*+ B Networking EquipHalcon Resources 21-Apr LT Corp Family Moody's Caa2 Caa1 Oil ProductionHalcon Resources 21-Apr Outlook Moody's NEG Oil ProductionJC Penney 22-Apr Outlook S&P POS Department StoresOcwen Fin'l 20-Apr LT Foreign Issuer S&P B*- B Mortgage SvcsResolute Energy 20-Apr Outlook S&P NEG Oil ProductionSabine Oil & Gas 22-Apr LT Foreign Issuer S&P D CCC*- Oil & GasSelect Medical 22-Apr Snr Unsec Debt Moody's B3 B3*- HospitalsService Corp Int'l 20-Apr LT Corp Family Moody's Ba2 Ba3 Funeral SvcsWalter Energy 17-Apr LT Foreign Issuer S&P D CCC+ Coal Mining



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Analyst Certification

I, Jody Lurie, the Primarily Responsible Analyst for this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject sectors, industries, securities, and issuers. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.

Janney Montgomery scott LLC (“Janney”) Debt Research Disclosure Legend

Janney may seek compensation for investment banking services for any company listed in this report in the next 3 months. the research analyst is compensated based on, in part, Janney’s profitability, which includes its investment banking revenues. additional information available upon request.

Definition of Issuer/Company outlooks

Janney FIS employs a rating system which considers the company, but not any specific debt or equity securities of the company and is not making a recommendation with regard to any specific debt securities of the company. Outlooks reflect our opinion about how credit factors of the company may affect its credit rating(s).

Positive: Janney FIS believes there are factors which point towards improving issuer or sector credit quality which may result in potential credit ratings upgrades

Stable: Janney FIS believes there are factors which point towards stable issuer or sector credit quality which are unlikely to result in either potential credit ratings upgrades or downgrades.

Cautious: Janney FIS believes there are factors which introduce the potential for declines in issuer or sector credit quality that may result in potential credit ratings downgrades.

Negative: Janney FIS believes there are factors which point towards weakening in issuer credit quality that will likely result in credit ratings downgrades.

Definition of sector/Industry Ratings

Overweight: Janney FIS expects the target asset class or sector to outperform the comparable benchmark (below) in its asset class in terms of total return.

Marketweight: Janney FIS expects the target asset class or sector to perform in line with the comparable benchmark (below) in its asset class in terms of total return.

Underweight: Janney FIS expects the target asset class or sector to underperform the comparable benchmark (below) in its asset class in terms of total return.

Janney FIs outlooks Distribution as of 04/24/2015

Benchmarks

Asset Classes: Janney FIS ratings for domestic fixed income asset classes including Treasuries, Agencies, Mortgages, Investment Grade Credit, High Yield Credit, and Municipals employ the “Barclay’s U.S. Aggregate Bond Market Index” as a benchmark. Treasuries: Janney FIS ratings employ the “Barclay’s U.S. Treasury Index” as a benchmark. Agencies: Janney FIS ratings employ the “Barclay’s U.S. Agency Index” as a benchmark. Mortgages: Janney FIS ratings employ the “Barclay’s U.S. MBS Index” as a benchmark. Investment Grade Credit: Janney FIS ratings employ the “Barclay’s U.S. Credit Index” as a benchmark. High Yield Credit: Janney FIS ratings for employ “Barclay’s U.S. Corporate High Yield Index” as a benchmark. Municipals: Janney FIS ratings employ the “Barclay’s Municipal Bond Index” as a benchmark.

Disclaimer

Janney or its affiliates may from time to time have a proprietary position in the various debt obligations of the issuers mentioned in this publication.

Unless otherwise noted, market data is from Bloomberg, Barclays, and Janney Fixed Income Strategy & Research (Janney FIS).

This report is the intellectual property of Janney Montgomery Scott LLC (Janney) and may not be reproduced, distributed, or published by any person for any purpose without Janney’s express prior written consent.

This report has been prepared by Janney and is to be used for informational purposes only. In no event should it be construed as a solicitation or offer to purchase or sell a security. The information presented herein is taken from sources believed to be reliable, but is not guaranteed by Janney as to accuracy or completeness. Any issue named or rates mentioned are used for illustrative purposes only, and may not represent the specific features or securities available at a given time. Preliminary Official Statements, Final Official Statements, or Prospectuses for any new issues mentioned herein are available upon request. The value of and income from investments may vary because of changes in interest rates, foreign exchange rates, securities prices, market indexes, as well as operational or financial conditions of issuers or other factors. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. We have no obligation to tell you when opinions or information contained in Janney FIS publications change.

Janney Fixed Income Strategy does not provide individually tailored investment advice and this document has been prepared without regard to the circumstances and objectives of those who receive it. The appropriateness of an investment or strategy will depend on an investor’s circumstances and objectives. For investment advice specific to your individual situation, or for additional information on this or other topics, please contact your Janney Financial Consultant and/or your tax or legal advisor.

IB serv./Past 12 mos.outlook count Percent count PercentPositive 9 20.5 0 0Stable 27 61.4 0 0Cautious 7 15.9 0 0Negative 1 2.3 0 0

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