2018 Asset based lending stats Thomson Reuters LPC 1H 2018 Maria C. Dikeos Director of Analysis maria.dikeos@thomsonreuters.com 646-223-6820

Key Points ABL MARKET OVERVIEW Asset Based Lending -1H18 ABL MARKET OVERVIEW Key Points US syndicated asset based loan volume totaled US$32 billion in 2Q 2018, a 63% increase over the US$20 billion raised in 1Q18, and a 21% increase year over year. The result also set new quarterly high for asset based lending. An additional US$900 million in clubbed issuance also was completed during the quarter. Year to date, US syndicated asset based loan volume was north of US$52 billion, a nearly 14% increase compared to the same time last year (US$46 billion). Of this total, over 17% backed M&A activity, the highest pro rata share since 2008. On a deal count basis, the calendar saw 80 deals work their way through the retail market in 2Q, up from 69 in 1Q18. Roughly US$17 billion of syndicated ABL loan volume or 33% of total issuance represented new loan assets. New syndicated loan assets totaled just under US$12 billion in 2Q 2018, the second highest quarterly total on record, and the highest since 4Q 2007. New money issuance made up to make up just over 36% of quarterly issuance. 37% of total new money loan assets during the quarter came via sponsored credits. Just over 38% of total ABL issuance year to date represented deals or amendments of US$150 million or less in size. This is down from over 51% for the same grouping in full year 2017. In contrast, nearly 19% of ABL issuance on a deal basis was at least US$500 million or greater, up from just over 13% for full year 2017. Over 21% of total ABL volume in 2Q 2018 was for borrowers in the oil and gas space. An additional 20% represented liquidity for retail and supermarket names and general manufacturing borrowers represented over 17% of total quarterly lending. As a result of the volume of refinancing activity, the maturity wall for ABL credits has been pushed out to 2023. It is estimated that nearly US$48 billion in ABL issuance may be up for renewal (based on upcoming maturity) in 2H 2018 and full year 2019. Quarter over quarter average spreads on ABL credits saw tightening amid strong lender demand for assets. Over 45% of total asset based lending during the quarter was priced at or below 150bps over Libor. More than 60% of all deals which cleared the market were priced at or below 175bps over Libor during the same time period.

Asset based volume & deal count Asset Based Lending -1H18 ABL Market Overview Asset based volume & deal count Syndicated loan volume – Quarterly & Year to Date Nearly US$32 billion in ABL loan volume was syndicated in 2Q18, a robust 63% increase from the US$19.6 billion raised in the first quarter. While large corporate working capital facilities continued to dominate the pipeline, among deals of at least US$1 billion in ABL assets, event driven transactions did resurface via acquisition loans for USA Compression and Albertson’s An additional US$910 million in clubbed volume likewise worked its way through the market At US$52.2 billion 1H18 syndicated ABL volume was up over 13% year over year Source: Thomson Reuters lpc

Asset based volume – new money & refis Asset Based Lending -1H18 ABL Market Overview Asset based volume – new money & refis Quarterly syndicated New Money & Refi volume At nearly US$17 billion, 1H18 new money syndicated volume was up 69% year over year amid an uptick in acquisition deals, to make up 33% of total lending during the first six months of the year, up from less than 22% of issuance at the same time last year Roughly 67% of 1H18 ABL loan volume represented refinancings, which totalled US$35 billion. This was down from 78.2% at the same time last year Source: Thomson Reuters lpc

Asset based volume – new money & refis Asset Based Lending -1H18 ABL Market Overview Asset based volume – new money & refis quarterly new money breakout Source: Thomson Reuters lpc

Asset based volume – leveraged & sponsored Asset Based Lending -1H18 ABL Market Overview Asset based volume – leveraged & sponsored ABL as % of Leveraged volume Sponsored vs corporate issuance Total syndicated ABL volume represented 7% of total syndicated leveraged loan volume in 1H 2018, modestly up from full year 2017 but off from historical highs. At just over US$11.2 billion 2Q18 sponsored issuance was double that of the prior quarter to bring 1H18 totals to nearly US$17 billion. The half year total represented a 7% increase over the same time last year, while 2Q18 results represented the highest quarterly total in seven years. Corporate issuance also saw a jump quarter over quarter, increasing 48% to log nearly US$21 billion in 2Q18. At almost US$35 billion, 1H18 sponsored ABL volume was up 14% compared to the same time last year. Source: Thomson Reuters lpc

Asset based volume – sponsored issuance Asset Based Lending -1H18 ABL Market Overview Asset based volume – sponsored issuance quarterly Corporate vs sponsored breakout Over US$11 billion of sponsored issuance, or 35% of total 2Q18 ABL volume, was completed via the syndicated loan market, this represented the highest quarterly total since 2Q11 About US$21 billion of corporate lending was completed in 2Q18 Source: Thomson Reuters lpc

Asset based loans – Pricing analysis Asset Based Lending -1H18 ABL Market overview Asset based loans – Pricing analysis Average pro rata pricing Pricing among ABL deals of US$75 million or greater tightened modestly in in 2Q18. Demand for assets allowed for thinner margins and looser terms in the ABL space on the whole. In contrast to the broader leveraged loan market which observed occasional investor pushback on opportunistic refinancings and hints of market selectivity, ABL lenders remained aggressive amid ongoing supply/demand imbalance Average drawn spreads were just north of 194.3 bps over Libor Average undrawn spreads inched down to about 32.0 bps Source: Thomson Reuters lpc

Asset based loans – Pricing analysis Asset Based Lending -1H18 ABL Market overview Asset based loans – Pricing analysis Average ABL pro rata pricing vs institutional cash flow pricing Source: Thomson Reuters lpc

Asset based volume – pricing analysis Asset Based Lending -1H18 ABL Market Overview Asset based volume – pricing analysis Quarterly ABL Spread dispersion Source: Thomson Reuters lpc

Asset based volume – pricing analysis Asset Based Lending -1H18 ABL Market Overview Asset based volume – pricing analysis ABL Spread dispersion 2Q18 ABL Pricing: retail/non-retail Avg. ABL Non-Retail Spread: 201.79 bps *Percentages based on deal count Avg. ABL Retail Spread: 164.43 bps, down from 191.67 bps in 1Q18 Avg. Overall ABL Spread: 194.31 bps, down from 197.56 bps in 1Q18 Source: Thomson Reuters lpc

Asset based volume – industry view Asset Based Lending -1H18 ABL Market Overview Asset based volume – industry view ABL Volume by Industry ABL industry pricing The oil and gas industry made up the largest proportion of ABL volume in 2Q18 with nearly US$11.5 billion in lending or over 21.4% of total quarterly issuance Retail and supermarkets, a traditional stronghold of ABL market made up less than 20.44% of total lending during the quarter. Source: Thomson Reuters lpc

Asset based loan deal size Asset Based Lending -1H18 ABL Market overview Asset based loan deal size ABL Deal Size Dispersion Deal size continued to skew towards the smaller end of the market (sub-US$250 million) as refinancings and add-ons dominated. Larger sized credits north of US$500 million were heavily weighted toward repricings and opportunistic refinancings. Larger, event driven transactions of at least US$1 billion, did surface however, to soak up liquidity Source: Thomson Reuters lpc

Asset based volume – issuance by purpose Asset Based Lending -1H18 ABL Market Overview Asset based volume – issuance by purpose Market share by deal purpose Sponsored vs corporate issuance Event driven financings picked up in 2Q18, with over 17% of year to date volume in the form of M&A lending. This is up from 11.13% in full year 2017. Opportunistic refinancings made up nearly 76% of total issuance during the quarter. Source: Thomson Reuters lpc

Asset based loans – issuance by tenor Asset Based Lending -1H18 ABL Market overview Asset based loans – issuance by tenor U.S. leveraged loan issuance Source: Thomson Reuters lpc

Asset based loans – estimated maturing volume Asset Based Lending -1H18 ABL Market overview Asset based loans – estimated maturing volume Refinancing cliff Source: Thomson Reuters lpc