U.S. Syndicated Loan Market Review Changes in Wholesale Lending: 2007 versus 2013 April 2013

U.S. Syndicated Loan Volume ─ 2012 Issuance at ‘05/’06 Levels Loan Pricing Corporation (LPC) places a syndicated financing in either category based on issuer credit ratings or the transactions drawn spread over LIBOR. The Leveraged credit profile is a senior debt rating of BB+/Ba1 or lower and/or a pricing margin of LIBOR+175 or higher Source: Thomson Reuters LPC

U.S. Syndicated Commercial Real Estate Loan Volume – Nearing ‘05/’06 levels/REIT issuance above Source: Thomson Reuters LPC

U.S. Leveraged Loan Volume Returning to ‘06 Levels Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money These numbers comprise loans U.S. dollar denominated Source: S&P Capital IQ

U.S. Syndicated Loan Volume – New Money Issuance below ‘05/’06 levels* 2012 new money issuance of 29% remains below levels seen in 2005 (34%) and 2006 (45%) * Measured as a % of Total Issuance Source: Thomson Reuters LPC

Investment Grade Pricing – Declining, but still above ‘05/’06 levels Source: Thomson Reuters LPC

Investment Grade Tenors – 5 Year Terms Dominate Source: Thomson Reuters LPC

Investment Grade – Covenant Levels Essentially Unchanged Source: Thomson Reuters LPC

Leveraged Pricing ─ Declining, but still above ‘05/’06 levels Source: S&P Capital IQ

Leveraged – Covenant Levels Remain Relatively Stable Source: Thomson Reuters LPC

Average Debt Multiples − Climbing / Equity Contributions − Declining Criteria: Pre-1996: L+250 and Higher; 1996 to Date: L+225 and Higher; Prior to 2011, media and telecom deals were excluded. Equity includes common equity and preferred stock as well as holding company debt and seller note proceeds down streamed to the operating company as common equity Source: S&P Capital IQ

New Issue Volume ─ Second-Lien / Covenant-Lite Loans Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money These numbers comprise loans denominated in all currencies and are subject to revision as Standard & Poor’s LCD collects additional data. Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money Excludes DIP, second liens and unsecured transactions These numbers comprise loans U.S. dollar denominated Source: S&P Capital IQ

Leveraged Lending ─ Institutional Segment Dominates A growing trend in leveraged lending is springing maintenance provisions in revolvers These are typically leverage covenants that become effective only when revolver draws occur US Bank tracked 23 recent transactions that have incorporated springing covenants Of the nearly $40 billion in facilities (details below), only $5 billion (14%) represent revolvers, with the balance representing Covenant-Lite Term Loan B, Second-Lien and/or Term Loan C tranches (institutional oriented tranches) Source: Standard & Poor’s LCD / Thomson Reuters LPC / market sources

Net Chargeoff Rate – Top 100 Banks Commercial & Industrial and Commercial Real Estate loans continue to track to historical credit cycles The new comer to credit cycles is residential mortgages