RESEARCHING DEALS AND MARKETS: why don’t the sources agree? Ian Hunter June 2017 Range – news 10 minutes to talk thru the key sources and issues in this area Background is my team is increasingly asked to do BD research, by which I mean the M&A, CM and lev fin markets rather than industrial sectors The three things you are likely to be asked for in this area are market totals, lists of deals and expert commentary on the markets. Jumping straight in, these are my favourite free sources [SLIDE]

FREE SOURCES FOR M&A, CAPITAL MARKETS AND LEVERAGED FINANCE STATS Title Scope Thomson Reuters Deals Intelligence quarterly league tables with an intro and additional analysis Bloomberg league tables only Dealogic Insights quarterly ‘Law firm memos’ law firms, The Big 4 etc AFME High Yield & Leveraged Loan Report quarterly, Europe only TR Leveraged Loan Monthly and Corporate Bond Monthly charts (and underlying data) on detailed aspects of these markets. US centric. Moody’s, S&P and Fitch press releases only, not full reports Mergermarket Remark Monthly M&A Insider and others TR Deals Intelligence [quarterly league tables with an intro and additional analysis] Built around league tables but with other charts, and several paragraph intro to each section. Divided into broad categoires of Capital Markets, M&A, Syndicated Loans etc. Jargon buster - M&A fairly straightforward, CM usually divided into DCM and ECM (bond issues and share issues to you and me – IPOs (new issues of shares) plus follow-ons (rights issues), lev fin divided into leveraged loan and HY bonds, so need to look in two different places: TR DCM report and TR Syndicated Loans report. [Volume (or value) v deal count] MOVE TO LATER The best for commentary is what I’ve called ‘Law firm memos’ e.g. Deloitte Al Deal Tracker, PwC IPO watch, Clifford Chance M&A inflows and outflows – AFME – most detailed free source for lev fin e.g. …. but European only… TR LLM and CBM – the best free sources in lev finance Mergermarket Remark reports – M&A and ECM [Top tip – PowerPoint to acess Excelk in underlying data – samrs ryping if writing a presentation.]

THOMSON REUTERS DEALS INTELLIGENCE

PAID-FOR SOURCES The Big 3 Specialist sources Thomson One Bloomberg Dealogic Specialist sources Capital Structure Thomson Loan Connector Mergermarket and Debtwire S&P LCD Moody’s IJ Global and PFI Xtract Research and DebtXplained So why use the paid-for sources? Lists of deals difficult to get for free Drilling down to country level So far so good.. BUT…[NEXT SLIDE]

THE ISSUES Finding a (free) source that gives the whole picture Publishers disagreeing Relying on a database total v the published reports Double counting - from the same published source the sum of the parts (e.g. breakdown by use of proceeds) adds up to more than the published total Finding a source that gives the whole picture – e.g. TR league tables – may drill down in one region but not another, detail (e.g. W Europe v EMEA) Publishers disagreeing: Can accept that exact figures may disagree but not direction of the market! Currency – remember to exchange (TR always in $, AFME and Debtwire always in Euros) Double counting – SLIDE Another jargon buster bit: use of proceeds (refi v M&A v Other/General Corporate Purposes) [Understanding the market breakdown e.g. sponsor-backed not subset – cuts across several subset): adapt table from Alex (Feb 2016 email)]

THE ISSUES: WHEN THE PUBLISHERS DISAGREE AFME “European leveraged finance issuance reached €202.7 billion [$219bn], an increase of 18.5% from €171.1 billion in 2015.”  Debtwire “The European leveraged finance primary issuance strengthened in 2016 despite a weak start to the year - a total of EUR 222bn [$241bn] was raised across the leveraged loan and high yield bond markets, a 24% increase on 2015” Thomson Reuters “European leveraged loan issuance fell to $183 billion in 2016, a 15% drop from the prior year High-yield bond issuance for European borrowers increased 5% in 2015 to 93.4 billion.” [TOTAL: $276bn] European leveraged loan issuance fell to $183 billion in 2016, a 15% drop from the prior year (Slide 24 of Leveraged Loan Monthly) (by contract US leveraged loan issuance climbed to $875 billion in 2016, up 12% from a year earlier and the third biggest year on record – slide 7)] [TR]   [International high-yield bond issuance for European borrowers increased 5% in 2015 to 93.4 billion. December volume declined to just $1.1 billion (Slide 46 of Corporate Bond Monthly).] [TR]

THE ISSUES: WHEN THE NUMBERS DON’T ADD UP Chart 1: Lev loans market total 2014: $200bn 2015: $216bn 2016: $182bn Chart 2: Lev loans breakdown by use of proceeds Refi M&A & new Money Total 2016: $103bn $91bn $194bn More about terminology: refi v M&A & New Money v GCP or other [Cutting across these categories, LBOs and sponsor-backed etc: these not a sub-set of refi or New Money or M&A. Also LBS etc – see Lembecke email] Source: TR LLM DEC2016 (issued Jan): SLIDE 24 – EURO LEV LOAN ISSUANCE: $182.727bn TR LLM FEB-17 (issued MAr) SLIDE 16 - $194.83

THE SOLUTION Be consistent - rely on one source throughout if possible If having to present conflicting data point this out ‘due to differences in methodology…’ use database searches for lists of deals, not market totals An art not a science? [Go straight to favourite source rather than Googling (unless looking for commentary)] Use Google Advanced e.g. site operator Despite being based on a finite number of deals worth finite amount of money, analysing these amrkts seems to be an art not a science. OR Bizarrely for research based on numbers, analysing these markts seems to be an art not a science.