Global Capital Markets

London Summit: Global Capital MarketsLondon Ι October 13, 2015

Source: BloombergOct92015.

Developed vs. Emerging Market Equities

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Index(2005=100)

Emergingmarket

Developedmarket

Assets of the 4 Biggest Banks (% of GDP, 2015)

Note:Latestdataused(October2015).*Singaporedataincludesonlyits3publiclytradedbanks.Sources:Bloomberg,IMF.

379

254 251 235

177138

112 10781

45 40 27

Concentration of Three Largest BanksTotal assets of top 3 banks as a percentage of home country’s gross domestic product

Note:8/7/15.Sources:Bankscope,SNL.

0

50

100

150

200

250

France UnitedStates

Crédit Agricole

BNPParibas

Société Générale

197%ofGDP($5.6T)

37%ofGDP($6.4T)

J.P.MorganBankofAmerica

Citigroup

Asia Banking Assets

(% of GDP))

Note: Latest data used (8/7/15). 2015 for publicly traded banks, and 2014 for GDP.Sources: Bloomberg, IMF.

277

207 196175 166

121 10770 63

37

U.S. and Fortune 500 Employment

America Goes to Work

60

80

100

120

140

160

180

200

1970 1975 1980 1985 1990 1995 2000

Modern capitalmarkets begin

New financial technologies are fully implemented

U.S. = + 62 million jobs

Fortune 500 = minus 4 million

0%

20%

40%

60%

80%

100%

Banks CLOs Hedge,distressedandhigh‐yieldfunds

Primeratesfunds,financialandinsurancecompanies

Institutional Investor Base for Non-investment Grade Loans

Sources:S&PLCD,JPMorgan,WellsFargo.11/11/14)

Sources:BIS,ECB.

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

Spain Germany Ireland Italy Portugal France UK

Bonds Loans

European Credit is a Bank Market

Bondsandloansasashareoftotalcorporatedebt,Q12015

Source:BloombergOct92015.Note:Cashandmarketablesecurities.Q2numbersusedforcompaniesnotyetreportingQ3.

15

61

23 15 722 25

8 8

203

131

9774

56 5430

13 110

40

80

120

160

200

240

Apple+1218%

GE+115%

Microsoft+312%

Google+386%

Oracle+697%

Cisco+144%

Pfizer+19%

Chevron+54%

Merck+39%

Q42007 Q32015US$billions

3.00%

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

High Yield Monitor

Note: Past performance is not necessarily indicative of future results. Any investment entails significant risks, including loss of the entire investment. Source: JP Morgan. Data presented is as of September 30, 2015.

Lower Quality Paper DivergingYield 12

Month Δ

CONFIDENTIAL |

10

CCC

B

BB

BBB

YTW

13.7%

8.4%

6.3%

5.1%

+420 bps

+208 bps

+121 bps+67 bps

HY Index

8.4% +200 bps

$35

$50

$65

$80

$95

$110

5.00%

7.00%

9.00%

11.00%

13.00%

Jan 2014 May 2014 Sep 2014 Jan 2015 May 2015 Sep 2015

HY Index

Source: JP Morgan. Data presented is as of September 30, 2015.Est. HY Index (Excluding Energy) is an estimate modeled by BSP of the JPM Domestic HY Index excluding the performance of securities of energy issuers. Oil price represents the price of a barrel of crude oil.

High Yield Monitor, Cont’dHigh Yield and Oil Price

CONFIDENTIAL |

11

Yield Oil Price

Source: J.P. Morgan research. 1 Source: J.P. Morgan research. Distressed debt is defined as par-weighted of high yield index trading below 80. The high yield index referenced is the JPM US HY Index. Please see not 4 at the end of the presentation for more information. As of September 30, 2015.2 Source: J.P. Morgan. “Default Monitor: High Yield and Leverage Loan Research”. As of October 1, 2015.

CONFIDENTIAL |

12

Distressed Debt

Distressed Debt as % of the High Yield Market1

The distressed sector, traditionally defined as issues trading below 80, has increased to 9.3% of the high yield index as of September 30, 2015 versus 1.2% on January 1, 20141

Notably, $42.2 billion of the $51.4 billion of bonds trading below $50 are from the Energy and Metals/Mining sectors, accounting for 82% of the distressed high-yield universe2

9.3%

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%

Oct2010

Aug2011

Jun2012

Apr2013

Feb2014

Dec2014

Sep2015

High Yield Bonds Priced Below 80

Credit Metrics

Source: Deutsche Bank US Credit Strategy Chartbook. Data presented is as of August 31, 2015.(1) Total leverage multiples represent Total Debt divided by Trailing 12 month EBITDA for the subset of high yield issuers that consistently report financial numbers publicly.

HY Issuer Total Leverage Multiples1

3.5x 3.7x4.1x 4.3x

3.6x 3.4x4.0x 4.2x 4.4x

5.1x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD

CONFIDENTIAL |

13

0

1

2

3

4

5

6

7

2007 2008 2009 2010 2011 2012 2013 2014 2015

Percent

Bank of England

European Central BankBank of Japan

U.S. Fed

Source:BloombergOct92015.

Central Bank Target Interest Rates Remain Low

U.S. vs. Europe High-Yield Debt Markets

3966 66

83121 123

7492

162127

213197 187

133

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015YTDEurope U.S.

Issuance,US$billions

Source:AFMEHighYieldDivision.Note:DataasofQ22015.

Shanghai Stock Exchange 2000 - 2015

01,0002,0003,0004,0005,0006,0007,000

2000 2002 2004 2006 2008 2010 2012 2014

Index

Source: Bloomberg (10/10/15).Note: Shanghai Stock Exchange Composite Index.

U.S. Percent of World Market Capitalization

2527293133353739414345

2004 2006 2008 2010 2012 2014

Sources:Bloomberg,MSCI,BofA MerrillLynch.

Percent

Commodity Returns in 2015

Source:BloombergOct9 2015.Note:Metals=LME3mth,GasandOil=NYMEX,HeatOilandCoffee=ICE,Commodities=CBOTandICE.

6‐1

‐3‐5

‐12‐14‐15

‐17‐17

‐18‐19

‐27‐31

‐40 ‐30 ‐20 ‐10 0 10

CocoaCottonGold

GasOilSoybeans

HeatingOilAluminumCrudeOil

ZincNaturalGasBrentCrude

CoffeeNickel

Percent,2015YTD

Currency Returns 2014 - 2015

‐1%‐5%

‐6%‐7%

‐9%‐10%‐10%‐11%

‐12%‐14%

‐15%‐17%

‐17%‐18%

‐20%‐36%

‐40% ‐30% ‐20% ‐10% 0%

SwissFrancBritishPound

TaiwaneseDollarSouthKoreanWonSingaporeDollar

JapaneseYenEuro

DanishKroneSwedishKronaCanadianDollar

NewZealandDollarAustralianDollar

SouthAfricanRandMexicanPeso

NorwegianKroneBrazilianReal

Percent,past12monthsending10/9/2015(USDbase)

Source:BloombergOct92015.

Exports to China

0.5%

0.7%

2.1%

2.7%

0.6%

5.6%

7.1%

10.3%

0% 2% 4% 6% 8% 10% 12%

UnitedKingdom

UnitedStates

Germany

Japan

India

Australia

Chile

Korea,Republicof

PercentofGDP

Majordevelopedeconomies

Sources:InternationalMonetaryFund,J.P.Morgan.

Emerging/commodityeconomies

Chinese Iron Ore Imports

0102030405060708090100

1983 1987 1991 1995 1999 2003 2007 2011 2015

Millionmetrictons

Source:Bloomberg.

Source:Datastream.

60

65

70

75

80

85

90

Millionmetrictons

China’s Volatile Iron Ore Imports

Monthlyimports2014– July2015

Source: BloombergOct92015.Note:Yield‐to‐worstOAS10‐yrBarclaysindex.

High-Yield Spread

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Percent

0

20

40

60

80

1955 2015

Life Expectancy in Southeast Asia

Source:UnitedNations,DepartmentofEconomicandSocialAffairs,PopulationDivision(2015).WorldPopulationProspects:The2015Revision,customdataacquiredviawebsite.SoutheastAsiaincludesSingapore,Indonesia,Philippines,Malaysia,Vietnam,etc.

Source:JamesRiley,OECCD,Statista.“Today”=latestavailabledataasof2015.

Life expectancy at birth: 1900 - present

Asia Europe United States

1900 28 43 47

1950 42 65 68

Today 72 78 79

Increase: +160% +80% +70%

Source: Bloomberg.Note:Datafrom10/9/2014‐10/9/2015

Brazilian real per U.S. Dollar

1

1.5

2

2.5

3

3.5

4

4.52010 2011 2012 2013 2014 2015

RealperUS$(invertedscale)

Median Age Around the World

Sources:UnitedNations.WorldPopulationProjectionsNote:Selectcountries.

Singapore 40.0

Thailand 38.0

Vietnam 30.4

Indonesia 28.4

Philippines 24.2

Southeast Asia 28.8

ALL ASIA 30.3

China 37.0

U.S.A 38.0

Russia 38.7

UK 40.0

Germany 46.2

Japan 46.5

ALL WORLD 29.6

Global Capital Markets

MichaelMilkenChairman,MilkenInstitute

RichardByrnePresident,ProvidenceEquityPartners

RobertKricheff

SVPandPortfolioManager,ShenkmanCapital

Management

PaulTaylorPresidentand

CEO,FitchRatings

KatherineGarrett‐Cox

CEO,AllianceTrust

BrigittePoschHeadofEmerging

MarketsCorp.Debt,Babson

Capital