EFTA01479644.pdf

Subject: Vahe can you check - if you agree send to JE + Rich ccing VS, me, Paul, Taz. thx [C] From: Nav Gupta < Date: Thu, 10 Jul 2014 12:39:46 -0400 To: Vahe Stepanian < Paul Morris < Classification: Confidential Jeffrey - This how we best like implementing the loan deal Vinit mentioned Buy $33mm ($10mm with cash + $23mm on margin) of the DWS Floating rate loan fund which is a $3.3bn institutional class mutual fund investing in senior 1st lien collateralised loans. It is managed by Deutsche. The terms of the leverage (which we would require DB credit approval for) indicatively are 70% LTV at 3mL+125bp. The purpose is to lever your return. We compared several funds. We like this DWS fund in particular: 1. performance (top third morningstar in 2008 when mkts tanked, 2009 when mkts recovered and 2010 when mkts went sideways. It currently yields just below 4% net of fees and has had an annualised yield over the past year of 3.5% to 4.25% depending on the NAV. 2. Fees are middle of the pack at 78bp (range is 60-100bp) 3. Portfolio management team of two have 32y and 33y experience respectively. Both joined Deutsche in eight years ago. The key to performance is proper loan due diligence combined with market timing 4. Fund size is $3.3bn. This is a huge benefit. Unlike some funds they don't have to buy every loan that is issued and instead can be highly selective 5. Both entry and exit are at close of business NAV. i.e. zero entry or exit transaction costs provided you hold the fund for minimum 2mths 6. Daily liquidity where some other funds are 30/60/90days. Even in 2008 when all credit markets tanked and became this fund maintained daily liquidity. 7. Credit rating of loans held is presently approx 35% BB and 60% single-B which are fine while defaults are low 8. Monthly income (as coupon) 9. US based fund BTW US brokerage a/c margin lending regulations require that for the first 30days you'd need to put up the whole $33mm and after that borrow $23mm. EFTA01479644  Forwarded by Nav Gupta/db/dbcom on 10/07/2014 17:08 From: Vinit Sahni/db/- To: [email protected], Cc: Paul Morri liNav Gupta/db/- Date: 09/07/2014 14:41 Subject: Re: Jeffrey - can we have a quick chat this am ? [C] Classification: Confidential Hi Jeffrey - looping in Nav and Paul. To recap: We will find a few funds, which we think have best performance characteristic and best fees for u. Loan Funds better than single loans as u don't need to bother booking single loans and servicing them. If we do decide to go bespoke best to do it in stage 2. just giving u broad characteristics of loan funds so that we are on the same page. 1) typical ratings for loans range between single B to BBB, the best loan funds concentrate on first lien collateralized senior loans 2) have daily NAV and MTM typically (to clarify these funds are not money market funds where price is par). Redemption liquidity ranges from daily to 90 days depending on fund. 3) spreads still around L + 3%-3.5%, duration close to zero as floating rate product. 4) size we are thinking is 10mm of cash from you, with 70% LTV so total size is 33mm levered right ? EFTA01479645 Vinit (Embedded image moved to file: pic23842.gif) Vinit Sahni Managing Director I Global Head - Professional Client Group & Key Client Partners Capital Markets Group Deutsche Asset & Wealth Management 105/108 Old Broad St (Pinners Hall), EC2N • Kingdom Tel. Mobi Email Any proposed ideas are being delivered to you by the DeAWM Key Client Partners ("KCP") London desk for discussion purposes only, and do not create any legally binding obligation on the part of Deutsche Bank AG and / or its affiliates ("DB"). These ideas are for the consideration of the intended recipients of this mail only. The KCP London desk does not provide investment advice. All intended recipients are Professional investors (as defined by MiFID), who understand the strategy, characteristics and risks associated with any ideas proposed herein and will be able to evaluate it independently. All trades on proposed ideas shall be subject to the relevant internal approvals prior to execution. (Embedded image moved to file: pic11721.gif) From: "jeffrey E." <[email protected]> • Vinit Sahni/db/- Date: 09/07/2014 11:59 Subject: Re: Jeffrey - can we have a quick chat this am ? EFTA01479646 [C] now? On Wed, Jul 9, 2014 at 6:49 AM, Vinit Sahni < M> wrote: Classification: Confidential Best Vinit (Embedded image moved to file: pic08787.gif) Vinit Sahni Managing Director I Global Head - Professional Client Group & Key Client Partners Capital Markets Group Deutsche Asset & Wealth Management 105/108 Old Broad St (Pinners Hall), EC2 Kingdom Tel. Mobi Email Any proposed ideas are being delivered to you by the DeAWM Key Client Partners ("KCP") London desk for discussion purposes only, and do not create any legally binding obligation on the part of Deutsche Bank AG and / or its affiliates ("DB"). These ideas are for the consideration of the intended recipients of this mail only. The KCP London desk does not provide investment advice. All intended recipients are Professional investors (as defined by MiFID), who understand the strategy, characteristics and risks associated with any ideas proposed herein and will be able to evaluate it independently. All trades on proposed ideas shall be subject to the relevant internal approvals prior to execution. (Embedded image moved to file: pic19109.gif) EFTA01479647  This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and delete this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Please refer to http://www.db.com/en/content/eu_disclosures.htm for additional EU corporate and regulatory disclosures and to http://www.db.com/unitedkingdom/content/privacy.htm for information about privacy. please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA01479648