2015 high-yield study (2016_01_25 03_57_23 utc)

2015 Global High-Yield Bond Study

Table of Contents

Executive Summary .......................................................... 2

Methodology ....................................................................... 4

Definitions ............................................................................ 5

Categories of Analysis .................................................... 8

High-Yield Bond Study

Call Protection ................................................................... 9

Change of Control Portability ...................................... 21

Debt ................................................................................... 27

Restricted Payments/Investments ............................... 63

Liens ................................................................................... 95

Affiliate Transactions .................................................... 105

Asset Sales ..................................................................... 111

Merger Covenant........................................................... 123

Registration Rights ....................................................... 131

Covenant Suspension/Fall Away ............................. 139

Collateral ......................................................................... 147

Events of Default ........................................................... 165

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 priorwritten 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 orother professional advice or services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used asa 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 qualifiedprofessional adviser. While reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed andneither 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, includingincidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk.

The sample population may not be an exact representation of the universe of deals because of limitations in the availability of deals.

© 2015 Proskauer Rose LLP. All rights reserved

ContactsAny questions regarding this study should be directed to:

Andrew BettwyPartner, [email protected]

Stephen P. GrubergAssociate, Global Capital Markets and [email protected]

Maximillian P. KirchnerPartner, Global Capital [email protected]

Roberto BrunoPartner, Global Capital [email protected]

Justin BreenPartner, Global Capital Markets and [email protected]

New York London

Philippa M. BondPartner, Global Capital [email protected]

Los Angeles

Frank J. LopezCo-Head, Global Capital [email protected]

mailto:[email protected]







http://www.proskauer.com/professionals/andrew-bettwy/

http://www.proskauer.com/professionals/justin-breen/

http://www.proskauer.com/professionals/stephen-gruberg/

http://www.proskauer.com/professionals/frank-lopez/

http://www.proskauer.com/professionals/roberto-bruno/

http://www.proskauer.com/professionals/maximilian-kirchner/

http://www.proskauer.com/professionals/philippa-m-bond/

Executive Summary

2

* Source: Prospect News. Includes only bonds denominated in U.S. dollars.Note: Prospect News considers tranches in the same transaction as separate deals.

Welcome to the fourth edition of Proskauer’s Global High-Yield Bond Study, our analysis of market terms for high-yield bond offerings.

Using data from our extensive proprietary database of high-yield deals, the study covers 1,236 deals closed globally in 2011–2014 that meet our selection criteria. In this edition, we examine trends in the 2012–2014 period. We categorize deals by geography, deal size, industry, credit rating and whether they are backed by private equity sponsors.

What’s new

As the high-yield market evolves, our study evolves with it. We’ve thus made a number of changes from last year’s edition.

New categories of analysis include:

Equity claw: The percentage of deals permitting an issuer to redeem more than the traditional 35% of bonds with the proceeds of a certain equity offering during the non-call period

Change of control portability: The percentage of deals with exceptions to the traditional put right of bondholders upon the occurrence of a change of control

Unlimited leverage-based restricted payments: The percentage of deals permitting the issuer to make unlimited restricted payments subject to a pro forma leverage test

2014: A slower year for high-yield*

Activity in the global market for high-yield bonds subsided in 2014. Deal value was modestly lower at $352 billion compared to $372 billion in 2013, while deal count dropped to 664 from 2013’s 808.

The biggest declines in activity were in the first and fourth quarters of the year. Issuance fell most in the first quarter compared to 2013 in the manufacturing, communications, wholesale/retail and oil & gas industries. The picture in the fourth quarter was similar, when oil & gas, communications, wholesale/retail and services accounted for the largest share of the decline.

Key takeaways

The study yielded a number of noteworthy observations about trends and practices among the high-yield deals in our database:

It’s good to have a sponsor (pages 45, 79, 94, 170). High-yield issuers backed by private equity sponsors continue to benefit from greater flexibility in deal terms than non-sponsor-backed issuers. For instance, the average size of the senior credit facilities debt basket for sponsor-backed issuers in 2014 was 321% of the issuer’s pro forma cash flow for the last 12 months, compared with 210% for deals without sponsor backing.

Issuers’ increased flexibility (pages 15, 90, 132). Certain deal terms that were once perceived as aggressive or unusual are now more common. An example is an issuer’s ability to make unlimited restricted payments if the issuer meets a specified leverage ratio. Although this is relatively new to the high-yield market, approximately one-third of 2014 deals allowed it.

Overview Call Protection

Change of Control

PortabilityDebt

Restricted Payments / Investments

Liens Affiliate Transactions Asset Sales Merger

CovenantRegistration

RightsCovenant

Suspension / Fall Away

Collateral Events of Default

Executive Summary

3

Rise of European high-yield (pages 7, 11, 16, 23, 76). High-yield has become a mainstream asset class in Europe/Middle East/Africa (EMEA). Issuance is approaching U.S. levels after years of relative obscurity, and there is a trend toward more creativity and flexibility in EMEA deals compared to the U.S. For example, an increasing number of EMEA deals permit the sale of the issuer to a third party without triggering a change of control put right if certain tests are met.

Moreover, in 2014, 13% of EMEA deals gave the issuer the right to call 10% of an issue at 103% of par annually during the non-call period, almost triple the U.S.’s 5%; and 50% of EMEA deals allowed the issuer to call more than 35% of an issue using the proceeds of certain equity offerings during the non-call period, vs. 27% in the U.S.

Investment-grade or hybrid covenant packages in the high-yield market. A meaningful percentage of high-yield deals have terms and covenant packages that mirror the investment-grade market or hybrid terms between the investment-grade and high-yield markets. While many of these deals in 2014 were for larger, public companies that were BB credits at the time of issuance and often formerly investment-grade (or “fallen angels”), several issuers rated below BB were able to negotiate investment-grade or hybrid covenant packages.

Shift toward private-for-life (pages 132–134, 136). Most high-yield deals have historically been private offerings under Rule 144A, but came with registration rights obligating the issuer to exchange the private bonds for public bonds typically within the first year after the bonds were issued. Until relatively recently, there was a perception that issuers would have to pay a higher interest rate to issue bonds without registration rights, known as “private-for-life” deals, given a perceived lack of liquidity by bondholders. But the market has become much more receptive to private-for-life deals with seemingly no incremental interest cost to the issuer. In 2014, 52% of U.S. high-yield deals were private-for-life, a meaningful increase from 33% in 2012.

Some post-crisis terms may be here to stay (page 148). The number of secured high-yield deals surged during and immediately after the financial crisis, mainly due to the freeze in bank lending, as issuers and investors saw secured high-yield deals as a replacement for senior secured bank loans in the issuer’s capital structure. Despite a resurgence in the bank loan market, secured deals continued to represent about 30% of the overall number of deals done through 2014, a significantly higher level than pre-crisis.

Some weaker credits get better terms (pages 44, 55, 73, 78, 82, 88, 99). In 2014, as in preceding years, some weaker credits (rated CCC and below) negotiated terms that were more issuer-friendly than did higher-rated credits (rated B or better). For example, CCC deals tended to have larger baskets as a percentage of the issuer’s total assets for the senior credit facilities debt basket and as a percentage of the issuer’s cash flows for the general restricted payments and general permitted investments baskets. In addition, the percentage of deals that included secured leverage-based liens growers and restricted payments baskets for excluded contributions and 6% of IPO proceeds was meaningfully higher for CCC deals than for higher-rated deals.

Industry matters (pages 28, 31, 67). The incidence of certain terms and flexibilities is often driven more by an issuer’s industry than its rating or credit quality. For example, whereas most 2014 deals (83%) had a ratio debt test based on a fixed charge coverage ratio, 59% of technology, media & telecom (TMT) deals had a test based on a leverage ratio. Similarly, deals in TMT were far likelier to contain a general restricted payments builder basket based on cash flow than in other industries, while 100% of health care deals in 2014 calculated this basket based on the issuer’s net income.

In conclusion

We hope you enjoy the 2015 Global High Yield Study and welcome your feedback. Please feel free to contact any of our lawyers listed inside the front cover with questions.


Change of Control

PortabilityDebt




RightsCovenant



Methodology

General • Reviewed 1,236 high-yield deals closed globally from 2011–2014.• Our 2015 study analyzes trends from 2012–2014.• Data broken down by geography, deal size, industry, rating and whether sponsor-backed. • 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.• Deals reviewed also include high-yield rated bonds with investment-grade or hybrid covenant packages. These deals have been excluded for

purposes of covenant 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 real estate industry are included in our Hospitality/Gaming category.- 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.

Financial Metrics• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and total assets calculations were based on the applicable issuer’s

trailing four quarters (or last 12 months, if applicable) of 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.

4


Change of Control

PortabilityDebt




RightsCovenant



Definitions

5

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 non-call period.


Change of Control

PortabilityDebt




RightsCovenant



Definitions

6

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 restricted payments builder basket.

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.


Change of Control

PortabilityDebt




RightsCovenant



9% 14% 19%'12 '13 '14

2014 Global High-Yield Market% of Deal Count

7

U.S./Canada46% in ‘14

Latin America5% in ‘14

Asia19% in ‘14

EMEA30% in ‘14

64% 53% 46%

'12 '13 '14

22% 29% 30%

'12 '13 '14

5% 4% 5%

'12 '13 '14


Change of Control

PortabilityDebt




RightsCovenant



Source: Prospect News

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- Hospitality/Gaming- Industrials- Oil & Gas- Technology, Media and Telecommunications (TMT)

• Ratings- BB- B- CCC

• Sponsor

8


Change of Control

PortabilityDebt




RightsCovenant



Call Protection

103% Redemption% of Deals

10

Global

% of Deals with 103% Redemption

0%

5%

10%

2012 2013 2014

7%

93%

Global 2014

With 103% RedemptionWithout 103% Redemption


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average = 7.3%

103% Redemption% of Deals with 103% Redemption

11

Geography

0%

5%

10%

15%

U.S. EMEA Asia Latin America

Deal Size

----- ----- 0%

5%

10%

15%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

----- Indicates no reviewed deals contained term

----- -----


12

0%

5%

10%

15%

20%

Consumer Financial Services Health Care Hospitality/Gaming Industrials Oil & Gas TMT

Industry

-------



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

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


13

Ratings

0%

5%

10%

15%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

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



14

Sponsor

0%

5%

10%

15%

20%

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

5%

10%

15%

20%

3-Year Average = 13%


Equity Claw% of Deals

15

Permits up to 35% Permits Greater Than 35%


Change of Control

PortabilityDebt




RightsCovenant



69%

31%

0%

10%

20%

30%

40%

2013 2014

Global 2014 Global

% of Deals Permitting Greater Than 35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%


Equity Claw% of Deals Permitting Greater Than 35%

16

Geography Deal Size


Change of Control

PortabilityDebt




RightsCovenant



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

Small Medium Large

2013 2014


17


Change of Control

PortabilityDebt




RightsCovenant



2013 2014

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Industry

-------



18

Ratings


Change of Control

PortabilityDebt




RightsCovenant



0%

10%

20%

30%

40%

50%

60%

BB B CCC

2013 2014

0%

10%

20%

30%

40%

50%

60%

70%


19

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2013 2014

0%

10%

20%

30%

40%

50%

60%

70%

Sponsor

Change of ControlPortability

Change of Control Portability% of Deals

22

15%

85%

Global 2014

With Change of Control Portability Without Change of Control Portability


Change of Control

PortabilityDebt




RightsCovenant



0%

5%

10%

15%

20%

25%

30%

35%


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

23

Geography 2014 Deal Size 2014

0%

5%

10%

15%

20%

25%

30%

35%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant




24


Change of Control

PortabilityDebt




RightsCovenant



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


Industry 2014

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

BB B CCC


25

Ratings 2014


Change of Control

PortabilityDebt




RightsCovenant



Change of Control Portability% of Deals

26

Non-Sponsor 2014

12%

88%

With Change of Control Portability Without Change of Control Portability


Change of Control

PortabilityDebt




RightsCovenant



Sponsor 2014

20%

80%

Ratio Debt% of Deals

28

Global

0%

25%

50%

75%

100%

2012 2013 2014

FCCR Leverage Both

83%

15%

2%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (FCCR) = 81%

Ratio DebtGeographic Breakdown

29

U.S.

0%

25%

50%

75%

100%

2012 2013 2014

FCCR

Leverage

Both

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant







Ratio DebtDeal Size Breakdown

30

Small

0%

25%

50%

75%

100%

2012 2013 2014

FCCR Leverage Both

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant






Ratio DebtIndustry Breakdown

31

Consumer

Hospitality/Gaming

FCCR Leverage Both

Industrials Oil & Gas TMT

Financial Services Health Care

0%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 2014

0%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant










Ratio DebtRatings Breakdown

32

BB

FCCR Leverage Both

B CCC

0%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant






Ratio DebtSponsor Breakdown

33

Non-Sponsor

FCCR Leverage Both

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant



Sponsor

0%

25%

50%

75%

100%

2012 2013 2014



Ratio Debt% of Deals

34

Global

83%

17%

Global 2014

FCCR of 2x FCCR of >2x

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (FCCR of 2x) =

79%

0%

25%

50%

75%

100%

2012 2013 2014

Ratio DebtGeographic Breakdown

35

U.S.

0%

25%

50%

75%

100%

2012 2013 2014 FCCR of 2x

FCCR of >2x

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




45%


68%


65%


84%

Ratio DebtDeal Size Breakdown

36

Small Medium Large


0%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 20140%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




84% 3-Year Average (FCCR of 2x) =

79%


78%

Ratio DebtIndustry Breakdown

37

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(FCCR of 2x) = 87%

3-Year Average

(FCCR of 2x) = 88% 3-Year

Average (FCCR of 2x)

= 51%

3-Year Average

(FCCR of 2x) = 76%

3-Year Average

(FCCR of 2x) = 89%

3-Year Average

(FCCR of 2x) = 88%

3-Year Average

(FCCR of 2x) = 93%

Ratio DebtRatings Breakdown

38

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant




80%


79%


86%

Ratio DebtSponsor Breakdown

39

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



Sponsor

0%

25%

50%

75%

100%

2012 2013 2014


75%


87%

Senior Credit Facilities BasketGlobal Analysis

40

% of Issuer's EBITDA

% of Issuer's Assets

0%

50%

100%

150%

200%

250%

300%

350%

0%

5%

10%

15%

20%

25%

30%

35%

40%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

3-Year Average = 31%3-Year Average = 261%

Senior Credit Facilities BasketGeographic Breakdown

41



0%

50%

100%

150%

200%

250%

300%

350%

U.S. EMEA Asia Latin America0%

5%

10%

15%

20%

25%

30%

35%

40%

45%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Senior Credit Facilities BasketDeal Size Breakdown

42



0%

50%

100%

150%

200%

250%

300%

350%

Small Medium Large0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Senior Credit Facilities BasketIndustry Breakdown

43



0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Senior Credit Facilities BasketRatings Breakdown

44



0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

550%

BB B CCC0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Senior Credit Facilities BasketSponsor Breakdown

45



0%

50%

100%

150%

200%

250%

300%

350%

400%

0%

5%

10%

15%

20%

25%

30%

35%

40%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 20140%

50%

100%

150%

200%

250%

300%

350%

400%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Non-Sponsor

Sponsor

3-Year Average = 306% 3-Year Average = 34%

3-Year Average = 236%3-Year Average = 29%

Contribution Indebtedness% of Deals

46

40%

60%

Global 2014

With Basket Without Basket


Change of Control

PortabilityDebt




RightsCovenant



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2012 2013 2014

Global

% of Deals with Basket


Contribution Indebtedness% of Deals with Basket

47


Change of Control

PortabilityDebt




RightsCovenant



0%

10%

20%

30%

40%

50%

60%


Geography Deal Size

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Small Medium Large

2012 2013 2014

------



48


Change of Control

PortabilityDebt




RightsCovenant



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


Industry

2012 2013 2014


49


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

10%

20%

30%

40%

50%

60%

70%

BB B CCC

Ratings


50


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Non-Sponsor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Sponsor



Purchase Money/Capital Lease Debt BasketGlobal Analysis

51



0%

5%

10%

15%

20%

25%

30%

0%

1%

2%

3%

4%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



Purchase Money/Capital Lease Debt Basket Geographic Breakdown

52

% of Issuer'sEBITDA


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


1%

2%

3%

4%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Purchase Money/Capital Lease Debt Basket Deal Size Breakdown

53



0%

1%

2%

3%

4%


5%

10%

15%

20%

25%

30%

35%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Purchase Money/Capital Lease Debt Basket Industry Breakdown

54



0%

5%

10%

15%

20%

25%

30%

35%

40%

0%

1%

2%

3%

4%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Purchase Money/Capital Lease Debt Basket Ratings Breakdown

55



0%

1%

2%

3%

4%

BB B CCC0%

5%

10%

15%

20%

25%

30%

35%

40%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Purchase Money/Capital Lease Debt Basket Sponsor Breakdown

56



0%

5%

10%

15%

20%

25%

30%

35%

0%

1%

2%

3%

4%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 20140%

5%

10%

15%

20%

25%

30%

35%

0%

1%

2%

3%

4%

Non-Sponsor

3-Year Average = 25% 3-Year Average = 3.0%


Sponsor

General Debt BasketGlobal Analysis

57



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0%

1%

2%

3%

4%

5%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



General Debt Basket Geographic Breakdown

58



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


1%

2%

3%

4%

5%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

General Debt BasketDeal Size Breakdown

59



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


1%

2%

3%

4%

5%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

General Debt Basket Industry Breakdown

60



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0%

1%

2%

3%

4%

5%

6%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

General Debt Basket Ratings Breakdown

61



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

BB B CCC0%

1%

2%

3%

4%

5%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

General Debt Basket Sponsor Breakdown

62



0%

10%

20%

30%

40%

50%

0%

1%

2%

3%

4%

5%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 20140%

10%

20%

30%

40%

50%

0%

1%

2%

3%

4%

5%

Non-Sponsor

Sponsor



3-Year Average = 32%3-Year Average = 3.6%

Restricted Payments /Investments

Restricted Payments Builder Basket% of Deals

64

Global

0%

25%

50%

75%

100%

2012 2013 2014

86%

14%

Global 2014

Net Income-Based Cash Flow-Based


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (Net Income-Based)

= 82%

0%

25%

50%

75%

100%

2012 2013 2014

Restricted Payments Builder BasketGeographic Breakdown

65

U.S.

0%

25%

50%

75%

100%

2012 2013 2014 Net Income-BasedCash Flow-Based

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




= 88%


= 84%


= 83%


= 81%

Restricted Payments Builder BasketDeal Size Breakdown

66

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(Net Income-Based) = 84%

3-Year Average


3-Year Average


Restricted Payments Builder BasketIndustry Breakdown

67

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average


3-Year Average


3-Year Average


3-Year Average


3-Year Average


3-Year Average


3-Year Average


Restricted Payments Builder BasketRating Breakdown

68

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average


3-Year Average


3-Year Average


Restricted Payments Builder BasketSponsor Breakdown

69

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



Sponsor

0%

25%

50%

75%

100%

2012 2013 2014


= 90%3-Year Average


Excluded Contributions% of Deals

70

Global

0%

10%

20%

30%

40%

50%

60%

45%

55%

Global 2014



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



0%

25%

50%

75%

U.S. EMEA Asia Latin America------

Excluded Contributions% of Deals with Basket

71

Geography Deal Size

0%

25%

50%

75%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



72

0%

25%

50%

75%


Industry


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


73

Ratings

0%

25%

50%

75%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

25%

50%

75%

100%


74

0%

25%

50%

75%

100%

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Sponsor



6% IPO Proceeds% of Deals

75

Global


0%

10%

20%

30%

40%

50%

60%

39%

61%

Global 2014



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


6% IPO Proceeds% of Deals with Basket

76

Geography

0%

15%

30%

45%

60%

75%


Deal Size

0%

15%

30%

45%

60%

75%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


77

0%

25%

50%

75%


Industry


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


78

Ratings

0%

10%

20%

30%

40%

50%

60%

70%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


79

0%

25%

50%

75%

100%

Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

25%

50%

75%

100%

Non-Sponsor



Restricted Payments General Basket% of Issuer's EBITDA

80

Global

0%

5%

10%

15%

20%

25%

30%

35%

Geography

0%

5%

10%

15%

20%

25%

30%

35%


2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant




81

Deal Size

0%

5%

10%

15%

20%

25%

30%

35%

Small Medium Large

Industry

0%

5%

10%

15%

20%

25%

30%

35%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


82

Ratings

0%

5%

10%

15%

20%

25%

30%

35%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


83

Non-Sponsor

0%

5%

10%

15%

20%

25%

30%

35%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Sponsor

0%

5%

10%

15%

20%

25%

30%

35%



Permitted Investments General BasketGlobal Analysis

84



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0%

1%

2%

3%

4%

5%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


Permitted Investments General BasketGeographic Breakdown

85



0%

5%

10%

15%

20%

25%

30%

35%


1%

2%

3%

4%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Permitted Investments General BasketDeal Size Breakdown

86



0%

5%

10%

15%

20%

25%

30%

35%


1%

2%

3%

4%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Permitted Investments General BasketIndustry Breakdown

87



0%

5%

10%

15%

20%

25%

30%

35%

40%

0%

1%

2%

3%

4%

5%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Permitted Investments General BasketRatings Breakdown

88



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

BB B CCC0%

1%

2%

3%

4%

5%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Permitted Investments General BasketSponsor Breakdown

89



0%5%

10%15%20%25%30%35%40%45%

0%

1%

2%

3%

4%

5%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0%

1%

2%

3%

4%

5%

Non-Sponsor

Sponsor





Unlimited Leverage-Based Restricted Payments% of Deals

90

Global 2014

31%

69%



Change of Control

PortabilityDebt




RightsCovenant



Unlimited Leverage-Based Restricted Payments% of Deals with Basket

91

Geography 2014

0%

10%

20%

30%

40%

50%

60%

70%


Deal Size 2014

0%

10%

20%

30%

40%

50%

60%

70%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



0%

10%

20%

30%

40%

50%

60%



92


Change of Control

PortabilityDebt




RightsCovenant



Industry 2014


93

Ratings 2014

0%

10%

20%

30%

40%

50%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



Unlimited Leverage-Based Restricted Payments% of Deals

94

Non-Sponsor 2014

26%

74%


Change of Control

PortabilityDebt




RightsCovenant



Sponsor 2014

42%

58%


Secured Leverage Grower% of Deals

96

Global


0%

10%

20%

30%

40%

50%

60%

39%

61%

Global 2014



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


Secured Leverage Grower% of Deals with Basket

97

Geography

0%

10%

20%

30%

40%

50%


Deal Size

0%

10%

20%

30%

40%

50%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

------



98

0%

25%

50%

75%

100%


Industry


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


99

Ratings

0%

25%

50%

75%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


100

0%

25%

50%

75%

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

25%

50%

75%

Sponsor



General Permitted Lien Basket% of Issuer's Assets

101

Global

0%

1%

2%

3%

4%

Geography

0%

1%

2%

3%

4%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



102

Deal Size

0%

1%

2%

3%

4%

Small Medium Large

Industry

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


103

Ratings

0%

1%

2%

3%

4%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


104

Non-Sponsor

0%

1%

2%

3%

4%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Sponsor

0%

1%

2%

3%

4%

3-Year Average = 2.6%3-Year Average = 2.6%

Affiliate Transactions

Fairness Opinion Requirement% of Deals

106

Global

% of Deals with Fairness Opinion Requirement

0%

25%

50%

75%

44%

56%

Global 2014

With Requirement Without Requirement


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

3-Year Average (with Requirement) = 51%

Fairness Opinion Requirement% of Deals with Fairness Opinion Requirement

107

Geography

0%

25%

50%

75%

100%


Deal Size

0%

25%

50%

75%

100%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


108

0%

25%

50%

75%

100%


Industry


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


109

Ratings

0%

25%

50%

75%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


110

0%

25%

50%

75%

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

25%

50%

75%

Sponsor



Asset Sales

Reinvestment Period

112

Global

0%

25%

50%

75%

100%

2012 2013 2014

<360 Days 360–365 Days >365 Days

85%

15%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (360–365 Days) = 78%

0%

25%

50%

75%

100%

2012 2013 2014

Reinvestment PeriodGeographic Breakdown

113

U.S.

0%

25%

50%

75%

100%

2012 2013 2014

<360 Days

360–365 Days

>365 Days

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




3-Year Average (360–365 Days) = 96%3-Year Average

(360–365 Days) = 86%


Reinvestment PeriodDeal Size Breakdown

114

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014

<360 Days 360–365 Days >365 Days


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (360–365 Days) =

85%


78%


73%

Reinvestment PeriodIndustry Breakdown

115

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




75%


82%


89%


68%


79%

<360 Days 360–365 Days >365 Days


73%


62%

Reinvestment PeriodRatings Breakdown

116

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014

<360 Days 360–365 Days >365 Days


Change of Control

PortabilityDebt




RightsCovenant




60%


79%


81%

Reinvestment PeriodSponsor Breakdown

117

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant



Sponsor

0%

25%

50%

75%

100%

2012 2013 2014


63%


86%

<360 Days 360–365 Days >365 Days

69%

31%

Designated Non-Cash Consideration% of Deals

118

Global

% of Deals with Carve-out

0%

25%

50%

75%

Global 2014

With Carve-out Without Carve-out


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


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

119

Geography

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Deal Size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Small Medium Large


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


120

0%

25%

50%

75%

100%


Industry


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


121

Ratings

0%

25%

50%

75%

100%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


122

0%

25%

50%

75%

100%

Non-Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

25%

50%

75%

100%

Sponsor



Merger Covenant

Ratio Debt Condition% of Deals

124

Global 2014

Must Meet Ratio Test Ratio No Worse or Improves

Global

16%

84%

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (Must Meet Ratio

Test) = 22%

0%

25%

50%

75%

100%

2012 2013 2014

Ratio Debt ConditionGeographic Breakdown

125

U.S.

0%

25%

50%

75%

100%

2012 2013 2014 Must Meet Ratio Test

Ratio No Worse or Improves

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




Test) = 33%


Test) = 67%


Test) = 19%


Test) = 24%

Ratio Debt ConditionDeal Size Breakdown

126

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(Must Meet Ratio Test)

= 33%

3-Year Average


= 24%

3-Year Average


= 23%

Ratio Debt ConditionIndustry Breakdown

127

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(Must Meet Ratio

Test) = 23%

3-Year Average

(Must Meet Ratio

Test) = 29%

3-Year Average

(Must Meet Ratio

Test) = 29%

3-Year Average

(Must Meet Ratio

Test) = 39%

3-Year Average

(Must Meet Ratio

Test) = 15%

3-Year Average

(Must Meet Ratio

Test) = 23%

3-Year Average

(Must Meet Ratio

Test) = 35%

Ratio Debt ConditionRatings Breakdown

128

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average


= 24%

3-Year Average


= 24%

3-Year Average


= 27%

Ratio Debt ConditionSponsor Breakdown

129

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014

Sponsor



Change of Control

PortabilityDebt




RightsCovenant



0%

25%

50%

75%

100%

2012 2013 2014

3-Year Average


= 16%

3-Year Average


= 30%

Registration Rights

Registration Rights% of Deals

132

Global

0%

25%

50%

75%

100%

2012 2013 2014

Private-for-Life Registered Registration Rights

64% 8%

28%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (Private-for-Life)

= 56%

0%

25%

50%

75%

100%

2012 2013 2014

Registration RightsGeographic Breakdown

133

U.S.

0%

25%

50%

75%

100%

2012 2013 2014

Private-for-Life

Registered

Registration Rights

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant




= 96%3-Year Average (Private-for-Life)

= 86%


= 43%


= 95%

Registration RightsDeal Size Breakdown (U.S. Deals)

134

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (Private-

for-Life) = 46%


for-Life) = 43%


for-Life) = 40%

Registration RightsIndustry Breakdown (U.S. Deals)

135

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (Private-for-Life) = 42%

3-Year Average (Private-for-Life) = 50% 3-Year

Average (Private-for-Life) = 20%





Registration RightsRatings Breakdown (U.S. Deals)

136

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant






Registration RightsSponsor Breakdown (U.S. Deals)

137

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



Sponsor

0%

25%

50%

75%

100%

2012 2013 2014



Covenant Suspension/Fall Away

Covenant Suspension / Fall Away % of Deals

140

72%

11%

17%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



Global

0%

25%

50%

75%

100%

2013 2014

Suspension Fall Away Neither

0%

25%

50%

75%

100%

2013 2014

Covenant Suspension / Fall AwayGeographic Breakdown

141

EMEA


Change of Control

PortabilityDebt




RightsCovenant



U.S.

0%

25%

50%

75%

100%

2013 2014

Suspension

Fall Away

Neither

0%

25%

50%

75%

100%

2013 2014

Asia

0%

25%

50%

75%

100%

2013 2014

Latin America

Covenant Suspension / Fall AwayDeal Size Breakdown

142


Change of Control

PortabilityDebt




RightsCovenant



0%

25%

50%

75%

100%

2013 20140%

25%

50%

75%

100%

2013 2014

Large

0%

25%

50%

75%

100%

2013 2014


Small Medium

Covenant Suspension / Fall AwayIndustry Breakdown

143


Change of Control

PortabilityDebt




RightsCovenant



Consumer

0%

25%

50%

75%

100%

2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2013 2014

Industrials

0%

25%

50%

75%

100%

2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2013 2014

TMT

0%

25%

50%

75%

100%

2013 2014

Financial Services

0%

25%

50%

75%

100%

2013 2014

Health Care

0%

25%

50%

75%

100%

2013 2014


0%

25%

50%

75%

100%

2013 2014

Covenant Suspension / Fall AwayRatings Breakdown

144


Change of Control

PortabilityDebt




RightsCovenant



BB B

0%

25%

50%

75%

100%

2013 2014

CCC

0%

25%

50%

75%

100%

2013 2014


Covenant Suspension / Fall AwaySponsor Breakdown

145


Change of Control

PortabilityDebt




RightsCovenant




Non-Sponsor

0%

25%

50%

75%

100%

2013 2014

Sponsor

0%

25%

50%

75%

100%

2013 2014

Collateral

Secured vs. Unsecured% of Deals

148


Change of Control

PortabilityDebt




RightsCovenant



29%

71%

0%

10%

20%

30%

40%

50%

Global 2014 Global

% of Secured Deals

Secured Unsecured 2012 2013 2014


0%

10%

20%

30%

40%

50%

60%

70%


Secured vs. Unsecured% of Secured Deals

149


Change of Control

PortabilityDebt




RightsCovenant



Geography Deal Size

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Small Medium Large

2012 2013 2014


150


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


Industry


151


Change of Control

PortabilityDebt




RightsCovenant



Ratings

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

BB B CCC

2012 2013 2014

Priority of Collateral Package% of Secured Deals

152

Global

0%

25%

50%

75%

100%

2012 2013 2014

First Lien Second Lien >Split Lien

46%

21%

33%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (First Lien) = 50%

0%

25%

50%

75%

100%

2012 2013 2014

Priority of Collateral PackageGeographic Breakdown

153

U.S.

0%

25%

50%

75%

100%

2012 2013 2014First LienSecond LienSplit Lien

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant







Priority of Collateral PackageDeal Size Breakdown

154

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(First Lien) = 47%

3-Year Average

(First Lien) = 42%

3-Year Average

(First Lien) = 63%

Priority of Collateral Package Industry Breakdown

155

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(First Lien) = 28%

3-Year Average

(First Lien) = 38%

3-Year Average

(First Lien) = 58%

3-Year Average

(First Lien) = 78%

3-Year Average

(First Lien) = 53%

3-Year Average

(First Lien) = 49%

3-Year Average

(First Lien) = 23%

Priority of Collateral Package Ratings Breakdown

156

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014



Change of Control

PortabilityDebt




RightsCovenant



3-Year Average

(First Lien) = 73%

3-Year Average

(First Lien) = 45%

3-Year Average

(First Lien) = 33%

Priority of Collateral PackageSponsor Breakdown

157

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014

Sponsor



Change of Control

PortabilityDebt




RightsCovenant



0%

25%

50%

75%

100%

2012 2013 2014

3-Year Average

(First Lien) = 52%

3-Year Average

(First Lien) = 47%

Voting Requirement to Release All or Substantially All Collateral

158

Global

0%

25%

50%

75%

100%

2012 2013 2014

Majority 66.67% 75% 80% 90–95% 100%

3%

57% 18%

17%5%

Global 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (66.67% Required) =

53%

0%

25%

50%

75%

100%

2012 2013 2014

Voting Requirement to Release All or Substantially All CollateralGeographic Breakdown

159

U.S.

0%

25%

50%

75%

100%

2012 2013 2014

Majority

66.67%

75%

80%

90–95%

100%

EMEA

0%

25%

50%

75%

100%

2012 2013 2014

Asia Latin America

0%

25%

50%

75%

100%

2012 2013 2014


Change of Control

PortabilityDebt




RightsCovenant



3-Year Average (66.67% Required) =

78%

Voting Requirement to Release All or Substantially All CollateralDeal Size Breakdown

160

Small

0%

25%

50%

75%

100%

2012 2013 2014

Medium

0%

25%

50%

75%

100%

2012 2013 2014

Large

0%

25%

50%

75%

100%

2012 2013 2014

Majority 66.67% 75% 80% 90–95% 100%


Change of Control

PortabilityDebt




RightsCovenant



Voting Requirement to Release All or Substantially All CollateralIndustry Breakdown

161

Consumer

0%

25%

50%

75%

100%

2012 2013 2014

Hospitality/Gaming

0%

25%

50%

75%

100%

2012 2013 2014

Industrials

0%

25%

50%

75%

100%

2012 2013 2014

Oil & Gas

0%

25%

50%

75%

100%

2012 2013 2014

TMT

0%

25%

50%

75%

100%

2012 2013 2014

Financial Services

0%

25%

50%

75%

100%

2012 2013 2014

Health Care

0%

25%

50%

75%

100%

2012 2013 2014

Majority 66.67% 75% 80% 90–95% 100%


Change of Control

PortabilityDebt




RightsCovenant



Voting Requirement to Release All or Substantially All CollateralRatings Breakdown

162

BB

0%

25%

50%

75%

100%

2012 2013 2014

B

0%

25%

50%

75%

100%

2012 2013 2014

CCC

0%

25%

50%

75%

100%

2012 2013 2014

Majority 66.67% 75% 80% 90–95% 100%


Change of Control

PortabilityDebt




RightsCovenant



Voting Requirement to Release All or Substantially All CollateralSponsor Breakdown

163

Non-Sponsor

0%

25%

50%

75%

100%

2012 2013 2014

Sponsor

Majority 66.67% 75% 80% 90–95% 100%


Change of Control

PortabilityDebt




RightsCovenant



0%

25%

50%

75%

100%

2012 2013 2014

Events of Default

Required Percentage to Accelerate* % of Deals

166

Global

0%

10%

20%

13%

87%

Global 2014

25% 230%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

% of Deals Requiring 30%


*Based on aggregate principal amount of notes

0%

10%

20%

U.S. EMEA Asia Latin America------

Required Percentage to Accelerate*% of Deals Requiring 30%

167

Geography Deal Size

0%

10%

20%

Small Medium Large------ ------


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

------

----- Indicates no reviewed deals contained term * Based on aggregate principal amount of notes

0%

10%

20%

30%

Consumer Financial Services Health Care Hospitality/Gaming Industrials Oil & Gas TMT-------


168

Industry

-------


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

----- Indicates no reviewed deals contained term * Based on aggregate principal amount of notes


169

Ratings

0%

10%

20%

30%

40%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014



170

0%

10%

20%

30%

Sponsor


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

0%

10%

20%

30%

Non-Sponsor




Cross-Acceleration Threshold% of Issuer's Assets

171

Global

0%

1%

2%

3%

Geography

0%

1%

2%

3%



Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


Cross-Acceleration Threshold% of Issuer’s Assets

172

Deal Size

0%

1%

2%

3%

Small Medium Large

Industry

0%

1%

2%

3%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


173

Ratings

0%

1%

2%

3%

BB B CCC


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014


174

Non-Sponsor

0%

1%

2%

3%


Change of Control

PortabilityDebt




RightsCovenant



2012 2013 2014

Sponsor

0%

1%

2%

3%



Thank you

175

A very special thanks to the following Capital Markets & Leveraged Finance Analysts, Associates and Staff for their contributions to the 2015 Global High-Yield Bond Study:

Anthony McIntyreGreg OehlerNorman RiveraJames RossGordon SchonfeldAndrew ShapiroScott Thurman

Shauna BracherBruce DaviesJames DuongDaniel HendrickDavid HuangAndrea HwangJinyoung JooLauren Kazmierski

Beijing

Suite 5102, 51/F Beijing Yintai Centre Tower C 2 Jianguomenwai AvenueChaoyang DistrictBeijing 100022, Chinat: +86.10.8572.1800f: +86.10.8572.1850

Boca Raton

2255 Glades RoadSuite 421 AtriumBoca Raton, FL 33431-7360, USAt: +1.561.241.7400f: +1.561.241.7145

Boston

One International PlaceBoston, MA 02110-2600, USAt: +1.617.526.9600f: +1.617.526.9899

Chicago

Three First National Plaza70 West Madison, Suite 3800Chicago, IL 60602-4342, USAt: +1.312.962.3550f: +1.312.962.3551

Hong Kong

Suites 1701-1705, 17/FTwo Exchange Square8 Connaught PlaceCentral, Hong Kongt: +852.3410.8000f: +852.3410.8001

London

110 BishopsgateLondon EC2N 4AY, United Kingdomt: +44.20.7280.2000f: +44.20.7280.2001

Los Angeles

2049 Century Park East, 32nd FloorLos Angeles, CA 90067-3206, USAt: +1.310.557.2900f: +1.310.557.2193

New Orleans

Poydras Center650 Poydras StreetSuite 1800New Orleans, LA 70130-6146, USAt: +1.504.310.4088f: +1.504.310.2022

New York

Eleven Times SquareNew York, NY 10036-8299, USAt: +1.212.969.3000f: +1.212.969.2900

Newark

One Newark CenterNewark, NJ 07102-5211, USAt: +1.973.274.3200f: +1.973.274.3299

Paris

374 rue Saint-Honoré75001 Paris, Francet: +33.(0)1.53.05.60.00f: +33.(0)1.53.05.60.05

São Paulo

Rua Funchal, 41826º andar 04551-060 São Paulo, SP, Brasilt: +55.11.3045.1250f: +55.11.3049.1259

Washington, D.C.

1001 Pennsylvania Avenue, NW Suite 600 SouthWashington, DC 20004-2533, USAt: +1.202.416.6800f: +1.202.416.6899

www.proskauer.com

2015 high-yield study (2016_01_25 03_57_23 utc)

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