Corporate Capital Structure Senior Secured Loans / Revolving Credit Facility Senior Unsecured Bonds Loans - A Unique Asset Class Senior Secured Loans ■ The most senior debt obligation in the capital structure of non-investment grade companies, explicitly secured by claims on the company's assets to provide superior rights in the event of default • Interest is paid prior to bond coupons and stock dividends ■ Covenants can preserve cash to protect against credit deterioration ■ Generally shorter maturity than bonds ■ Benefit from -Floating rates - LIBOR floors • Over the long term, historical recovery rates have been 70% for senior secured loans Trailing 12-Month Recovery Rate 100 90 so 70 oo US Senior Seethed Loans SUS Senor 50 40 Equity 30 20 10 0 3 • 4 4 '4 12/ v12/ 4 i g i i i c i S Deutsche Bank Corporate Banking & Securities Source: Moaly's Monthly Default Roped. Jan 2014 Unsecured Bonds —tourr—All Subordinated Bonds / • V • V V Y I 4 04 14 VI 41. 8 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0 124594 SDNY_GM_00270778 EFTA01462177