EFTA01373775.pdf

For Key Client Partners or US Institutional Investors. Not for Retail Distribution Term A/B Financing Overview of Risks and Considerations I Muni Bond Price Risks A/B Financing Structure Risks Risk Ex .lanation Consideration Risk Ex • lanation Consideration Risk-Free Rates Broad. risk-free rates Possible to partially / fully hedge Bond Price Risk Proceeds of bond sales Investor should carefully (LIBOR( such as LIBOR increase LIBOR to offset rate risk are distributed first to D8 evaluate Bond Price Risks then to client mentioned here and only execute when comfortable with the risk / return tradeoff Muni Market Muni market spreads. Investor must be comfortable Tenor Mismatch Financing tenor is shorter Upon Trust Termination, any Spreads measured as the that MMD cannot be directly Risk than underlying bond market losses of underlying difference between MMD hedged through interest rate maturity bond are first applied to B and LIBOR. may increase swaps Certificate Idiosyncratic Specific credit quality of Muni Bonds have historically Credit Spread the issuer deteriorates. experienced a very low default Trigger Price DB has right to terminate Investor should be aware that increasing the single- rate: Investors can select names Risk transaction either if Muri if either event occurs. DB will name spread across ratings and sectors that Bond price drops below have the optional right to fits specific risk / return appetite unwind trigger immediately collapse the Trust Liquidity Specific bonds may Investors must be comfortable Spread Risk contain nonstandard or with the inherent hgher risks Early Trust may unwind early Investor must be comfortable complex features. leading associated with less liquid Termination Risk due to events outside of with early unwind events, to a wider single-name bonds, as perceived by the Investor's control including bit not limited to spread, especially in general market that determines price decline past trigger. times of market stress the price over time bond failure to pay. bankruptcy of bond obligor, Optionality I Callable Muni Bonds are Investors must be comfortable and taxability Caliability generally called when that the duration of callable Collateral Risk Client may have the ability Investor must maintain economically bonds can change quickly. to post collateral to avoid sufficient liquidity to post if advantageous to the depending on the market's view an price-based unwind Investor elects to remain in issuer, not the investor of the likelihood of being called. trigger, subject to DB the trade without having to taking into account the costs of credit approval terminate I lock-in any losses issuing refinancing bonds Taxability Risk The Trust collapses upon Most Muni Bonds carry a tax- taxability of the Muni exempt opinion from bond Bonds counsel Deutsche Bank 12 AM transactions subtea to final cleat legal. tax and other Sanaa De approvals. De is not a financial. accounting. or lax advisor to Investor andInvestor should consider cantor* vat Their achtsors pnor to executing any transaction. Further informatbn can be minded upon inquest CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0068132 CONFIDENTIAL SDNY_GM_00214316 EFTA01373775