Re: Proposed Portfolio
Financial
= Source: Bloomberg 10/2015 &=bsp; </=>
= &nb=p;
6.=nbsp; Frontier Communications:
FTR 8 ½% 04/15/20
Indicative Offer: 104.50
YTM: 7.30%
m=dium-sized cities. Frontier With is a the market largest cap ru=al of $5billion, telecom FTR company is the 5th in the largest U.S., U= focused wireline on company. providing services Over the to last small 5 years, and FTR has increased revenue 5x, and has achieved geographic diversif=cation & product mix through tactical acquisitions of broadband assets f=om both AT&T and Verizon. The bonds offer attractive relative value, pi=king up "200bps vs. BB comps and —50bps over single-B comps. Frontier issued $6.6bn of bonds on September 11th to b=ck its purchase of landline assets from Verizon Communications, a deal larg=ly anticipated by the market. Post issuance, the supply overhang has now be=n virtually removed from the Frontier complex.
7.=nbsp; Structured Notes: In these volatile markets,=we continue to like structured notes that provide protection on the downsid= coupled with unlimited upside or double-digit coupons. We will show these a= we think pricing looks interesting.
<=pan style="font-size:8.0pt;font-family:"Verdana","sans-ser=f";color:#5f5f5f">_______=</=>
<=pan style="font-size:8.0pt;font-family:"Verdana","sans-ser=f";color:#1f497d">Paul Barrett| Managing Director | Global Investment Oppo=tunities Group | J.P. Morgan Securities LLC | J.P. Morgan Private Bank | <=>J.P. Morgan Chase Bank N.A.
320 Park Avenue, 14th Floor, New York, NY 10=22 | T: █████████tel:%28212%29%20622-2770 | paul.s.barr=tt@jpmorgan.com mailto:paul.s.barrett@jpmorgan.com
9
EFTA_R1_01323532
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NOT AN=OFFICIAL CONFIRMATION: For informational p=rposes only. This report does not represent an official account of th= holdings, balances, or transactions made in your account and is being prov=ded at your request. Please refer to your monthly account statement for the official record of all of your ac=ount activities. For question, please call your J.P. Morgan represent=tive.
In discussion of options and other strategies, results and risks ar= based solely on hypothetical examples cited; actual results and risks will=vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related p=oducts in general, as well as the products or strategies discussed herein a=e suitable to their needs. In actual transactions, the client's cou=terparty for OTC derivatives applications is JPMorgan Chase Bank, N.A., and affiliates. For a copy of the "Ch=racteristics and Risks of Standardized Options" booklet, please con=act your JPMorgan Advisor.
This email is confidential and subject to important disclaimers and=conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, conf=dentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.=om/pages/disclosures/email http://www.=pmorgan.com/pages/disclosures/email . <=p>
This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.com/pages/disclosures/email http://www.jpmorgan.com/pages/disclosures/email
please note
Th= information contained in this communication is confidential, may be att=rney-client privileged, may constitute inside information, and is intend=d only for the use of the addressee. It is the property of
JEE
Una=thorized use, disclosure or copying of this communication or any part th=reof is strictly prohibited and may be unlawful. If you have received th=s communication in error, please notify us immediately by return e•ma=l or by e-mail to jeevacation@gmail.com mailto:jeevacation@gmail.com , and destroy this communication and all copie= thereof, including all attachments. copyright -all rights reserved <=div>
<Gaming.zip>
</=lockquote>
10
EFTA_R1_01323533
EFTA02348991
<Defense.zip>
<Consumer.zip>
<Healthcare.zip>
11
EFTA_R1_01323534
EFTA02348992
Brad,
Below would be our proposed investments breakdown for=$20mm:
Theme
| Proposed Investment | Proposed Investment |
|---|---|
| = | $2,500,0=0 |
| = | $2,500,000 |
| = | $2,500,000 |
| = | $2,500,000 |
| = | $6,000,000 |
1
EFTA_R1_01323524
EFTA02348982
| = | $ 1,000,000 |
|---|---|
| = | $ 3,000,000 |
| &n=sp; | $ 20,000,000 =/u> |
1.=nbsp; Consumer Discretionary:
Rising disposable income, lower oil prices, labor market strengthening an= tame inflation should continue to boost confidence and spending.=/u>
Ticker
Name
OW<=>>
130.00<=u>
OW<=>>
135.00<=u>
OW<=>
162.00<=u>
OW<=>:
127.00<=u>
OW<=>
10.00<=>>
Source: Bloomberg, JPM 1=/26/2015
2.=nbsp; eGaming / Interactive Gaming: =/p>
There are more than 700 different eGames events annually (ESPN plans to b=oadcast an eGame event for the first time in 2016), with a fan base that ex=eeds 260 million people. 2015 marks the first year global games market sale= are projected to overtake filmed entertainment bringing in $91.5 billion and is=forecast to rise to $113 billion by 2018. Despite an addressable market man= times larger than ten years ago, valuations for the leading gaming vendors=are trading at significantly lower multiples than at the top of the last cycle.
2
EFTA_R1_01323525
EFTA02348983
Name: Rating<=> Target<=> ADR<=u> UBISOFT ENTERTAINMENT
OW<=>: 20.00</=>
UBSFY</=>: SQUARE ENIX HOLDINGS CO LTD
OW<=>: 4000
&nb=p;: NINTENDO CO LTD
N: 19,000.00<=>
NTDOY</=>: NVIDIA CORP
N: 24.00</=>
&nb=p;: TENCENT HOLDINGS LTD
OW<=>: 187.00<=u>
TCEHY</=>: Source: Bloomberg, JPM 1=/26/2015
3
EFTA_R1_01323526
EFTA02348984
3.=nbsp; Healthcare:
The percentage of the American population that is over 65 years old has i=creased from 13% in 2010 to an estimated 18% in 2025. Company pipelines hav= also become more robust with a 54% increase since 2007 in the number of dr=gs gaining FDA approval. We think the sell-off which was due to the practices o= a few select companies was too broad and overdone. We would use this as an=opportunity to add to our core names.
Name
Rating<=>
Target<=>
BRISTOL-MYERS SQUIBB CO
OW<=>
78.00<1=>
PFIZER INC
OW<=>
40.00</=>
MERCK & CO. INC.
OW<=>
66.00<1=>
Source: Bloomberg, JPM 1=126/2015
4.=nbsp; Defense:
Geopolitical events in Rus=ia, the Middle East and the South China Sea are forcing governments to quic=ly ramp up defense spending. Defense stocks are well positioned in a l=w-growth environment with high earnings visibility, improving defense budget outlooks, and good shareholder return.=nbsp;
Name
4
EFTA_R1_01323527
EFTA02348985
Rating<=>
Target<=>
GENERAL DYNAMICS CORP
OW<=>
169.00<=u>
NORTHROP GRUMMAN CORP
N
198.00<=u>
BOEING CO/THE
OW<=>
177.00<=u>
RAYTHEON COMPANY
OW<=>
130.00<=u>
LOCKHEED MARTIN CORP
N
225.00<=u>
Source: Bloomberg, WPM 1=126/2015
S.=nbsp; Preferreds: (We would like to put one turn o= leverage on these in the margin account)
Preferreds performed quite well amidst recent market turbulence, with rap=d price and liquidity recovery. While Preferreds, as hybrid securitie=, might have been expected to experience more volatility during this period= we believe that the fundamental strength of bank balance sheets as well as the securit=es' fixed income duration (as rates rallied) cushioned the sector.&=bsp;The broader firm tone in the markets coupled with the fact that bank ea=nings season is largely completed and the market saw no preferred issuance is creating a strong technical backdrop fo= the assets.
Indicative Pricing
CUSIP=ISIN
5
EFTA_R1_01323528
EFTA02348986
Secur=ty
Ask P=ice
Ratin=s (Moody's/S&P)
Next C=ll Date
YLD t= NXT Call
Back-=nd Coupon Reset
Inter=st Rate Duration
QDI /=DRD Eligible
Indus=ry Sector
Non-Call 5yr
&nb=p;
&=bsp;
38148BAB4
GS 5 3/8 Perp
99.500
Ba1 / BB
5/10/2020
= 5.50
3mL+392.2b=s
6
EFTA_R1_01323529
EFTA02348987
= 3.96
Yes / Ye=
Financial
617474AA9
MS 5.55 Perp
100.750
Ba1 / BB
7/15/2020
= 5.37
3mL+381bps=u>
= 4.13
Yes / Ye=
Financial
Non-Call 10yr
&nb=p;
&=bsp;
46625HJQ4
JPM 6 3/4 Perp
106.875
7
EFTA_R1_01323530
EFTA02348988
Baa3 / BBB-
2/1/2024
= 5.70
3mL+378bps=u>
= 6.35
Yes / Ye=
Financial
060505EN0
BAC 6.1 Perp
99.750
Ba2 / BB+
3/17/2025
= 6.13
3mL+389.8b=s
= 7.10
Yes / Ye=
Financial
172967JM4
C 5.95 Perp
96.875
Ba2 / BB+
5/15/2025
= 6.39
3mL+390.5b=s
= 7.02
Yes / Ye=
---------- Forwarded message ----------
From: Barrett, Paul S paul.barrett@jpmorgan.com
Date: Mon, Oct 26, 2015 at 6:03 PM
Subject: Proposed Portfolio
To: Brad Wechsler brad.wechsler@jpmorgan.com
Cc: Barrett Tea= barrett.tea@jpmorgan.com>, "Jeffrey Epstein ( <jeffrey.epstein@jpmorgan.com
jeevacation@gmail.com mailto:jeevacation@gmail.com )" <jeevacation@gmail.com
mailto:jeevacation@gmail.com>, "Nelson, Justin D" justin.d.nelson@jpmorgan.com
Brad,
Below would be our proposed investments breakdown for=$20mm:
Theme
| Proposed Investment | Proposed Investment |
|---|---|
| = | $2,500,0=0 |
| = | $2,500,000 |
| = | $2,500,000 |
| = | $2,500,000 |
| = | $6,000,000 |
1
EFTA_R1_01323524
EFTA02348982
| = | $ 1,000,000 |
|---|---|
| = | $ 3,000,000 |
| &n=sp; | $ 20,000,000 =/u> |
1.=nbsp; Consumer Discretionary:
Rising disposable income, lower oil prices, labor market strengthening an= tame inflation should continue to boost confidence and spending.=/u>
Ticker
Name
OW<=>>
130.00<=u>
OW<=>>
135.00<=u>
OW<=>
162.00<=u>
OW<=>:
127.00<=u>
OW<=>
10.00<=>>
Source: Bloomberg, JPM 1=/26/2015
2.=nbsp; eGaming / Interactive Gaming: =/p>
There are more than 700 different eGames events annually (ESPN plans to b=oadcast an eGame event for the first time in 2016), with a fan base that ex=eeds 260 million people. 2015 marks the first year global games market sale= are projected to overtake filmed entertainment bringing in $91.5 billion and is=forecast to rise to $113 billion by 2018. Despite an addressable market man= times larger than ten years ago, valuations for the leading gaming vendors=are trading at significantly lower multiples than at the top of the last cycle.
2
EFTA_R1_01323525
EFTA02348983
Name: Rating<=> Target<=> ADR<=u> UBISOFT ENTERTAINMENT
OW<=>: 20.00</=>
UBSFY</=>: SQUARE ENIX HOLDINGS CO LTD
OW<=>: 4000
&nb=p;: NINTENDO CO LTD
N: 19,000.00<=>
NTDOY</=>: NVIDIA CORP
N: 24.00</=>
&nb=p;: TENCENT HOLDINGS LTD
OW<=>: 187.00<=u>
TCEHY</=>: Source: Bloomberg, JPM 1=/26/2015
3
EFTA_R1_01323526
EFTA02348984
3.=nbsp; Healthcare:
The percentage of the American population that is over 65 years old has i=creased from 13% in 2010 to an estimated 18% in 2025. Company pipelines hav= also become more robust with a 54% increase since 2007 in the number of dr=gs gaining FDA approval. We think the sell-off which was due to the practices o= a few select companies was too broad and overdone. We would use this as an=opportunity to add to our core names.
Name
Rating<=>
Target<=>
BRISTOL-MYERS SQUIBB CO
OW<=>
78.00<1=>
PFIZER INC
OW<=>
40.00</=>
MERCK & CO. INC.
OW<=>
66.00<1=>
Source: Bloomberg, JPM 1=126/2015
4.=nbsp; Defense:
Geopolitical events in Rus=ia, the Middle East and the South China Sea are forcing governments to quic=ly ramp up defense spending. Defense stocks are well positioned in a l=w-growth environment with high earnings visibility, improving defense budget outlooks, and good shareholder return.=nbsp;
Name
4
EFTA_R1_01323527
EFTA02348985
Rating<=>
Target<=>
GENERAL DYNAMICS CORP
OW<=>
169.00<=u>
NORTHROP GRUMMAN CORP
N
198.00<=u>
BOEING CO/THE
OW<=>
177.00<=u>
RAYTHEON COMPANY
OW<=>
130.00<=u>
LOCKHEED MARTIN CORP
N
225.00<=u>
Source: Bloomberg, WPM 1=126/2015
S.=nbsp; Preferreds: (We would like to put one turn o= leverage on these in the margin account)
Preferreds performed quite well amidst recent market turbulence, with rap=d price and liquidity recovery. While Preferreds, as hybrid securitie=, might have been expected to experience more volatility during this period= we believe that the fundamental strength of bank balance sheets as well as the securit=es' fixed income duration (as rates rallied) cushioned the sector.&=bsp;The broader firm tone in the markets coupled with the fact that bank ea=nings season is largely completed and the market saw no preferred issuance is creating a strong technical backdrop fo= the assets.
Indicative Pricing
CUSIP=ISIN
5
EFTA_R1_01323528
EFTA02348986
Secur=ty
Ask P=ice
Ratin=s (Moody's/S&P)
Next C=ll Date
YLD t= NXT Call
Back-=nd Coupon Reset
Inter=st Rate Duration
QDI /=DRD Eligible
Indus=ry Sector
Non-Call 5yr
&nb=p;
&=bsp;
38148BAB4
GS 5 3/8 Perp
99.500
Ba1 / BB
5/10/2020
= 5.50
3mL+392.2b=s
6
EFTA_R1_01323529
EFTA02348987
= 3.96
Yes / Ye=
Financial
617474AA9
MS 5.55 Perp
100.750
Ba1 / BB
7/15/2020
= 5.37
3mL+381bps=u>
= 4.13
Yes / Ye=
Financial
Non-Call 10yr
&nb=p;
&=bsp;
46625HJQ4
JPM 6 3/4 Perp
106.875
7
EFTA_R1_01323530
EFTA02348988
Baa3 / BBB-
2/1/2024
= 5.70
3mL+378bps=u>
= 6.35
Yes / Ye=
Financial
060505EN0
BAC 6.1 Perp
99.750
Ba2 / BB+
3/17/2025
= 6.13
3mL+389.8b=s
= 7.10
Yes / Ye=
Financial
172967JM4
C 5.95 Perp
96.875
Ba2 / BB+
5/15/2025
= 6.39
3mL+390.5b=s
= 7.02
Yes / Ye=
Tks. Will u be in town Tuesday -=or after and have any free time
Sent from my iPad