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Markets Avoid Great Recession’s Calamities (Capital Market Research) (Weekly Market Outlook)

·286 mins read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>Markets Avoid Great Recession s Calamities</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="author" content="John Lonski"/> <meta name="keywords" content=""/> <meta name="date" content="2020-08-13T16:41:58+00:00"/> <meta name="subject" content="The issuance of US$-denominated high-yield bonds has already set a record-high for the month of August. Thus far in August, more than $42 billion of high-yield bonds have been offered, which easily tops 2012 s previous month-long record high for August of $33 billion. The COVID-19 recession lasted just one month for high-yield bond issuance. After sinking from a January-February unsustainable average of $62 billion per month to March s recessionary $6 billion, US$-denominated high-yield bond offerings have subsequently averaged $46 billion per month at least during April through August. The first eight months of 2020 will show a year-over-year increase of at least 32% for the issuance of high-yield bonds to $358 billion. The latter easily tops 2017 s old record high of $290 billion for high-yield bond issuance during the January-August span."/> <style type="text/css"> <!-- .xflip { -moz-transform: scaleX(-1); -webkit-transform: scaleX(-1); -o-transform: scaleX(-1); transform: scaleX(-1); filter: fliph; } .yflip { -moz-transform: scaleY(-1); -webkit-transform: scaleY(-1); -o-transform: scaleY(-1); transform: scaleY(-1); filter: flipv; } .xyflip { -moz-transform: scaleX(-1) scaleY(-1); -webkit-transform: scaleX(-1) scaleY(-1); -o-transform: scaleX(-1) scaleY(-1); transform: scaleX(-1) scaleY(-1); filter: fliph + flipv; } --> </style> </head> <body bgcolor="#A0A0A0" vlink="blue" link="blue"> <!-- Page 1 --> <a name="1"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft00{font-size:9px;font-family:Times;color:#ffffff;} .ft01{font-size:9px;font-family:Times;color:#000000;} .ft02{font-size:25px;font-family:Times;color:#0090c5;} .ft03{font-size:11px;font-family:Times;color:#ffffff;} 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bond&#160;issuance&#160;rose&#160;by&#160;2.6%&#160;to&#160;<money>$1.309&#160;trillion</money>,&#160;while&#160;high-</p> <p style="position:absolute;top:625px;left:558px;white-space:nowrap" class="ft06">yield&#160;bond&#160;issuance surged&#160;by&#160;55.8%&#160;to&#160;<money>$432&#160;billion</money>.&#160;&#160;</p> <p style="position:absolute;top:640px;left:558px;white-space:nowrap" class="ft06">In&#160;2020,&#160;US$-denominated&#160;corporate bond&#160;issuance&#160;is&#160;</p> <p style="position:absolute;top:655px;left:558px;white-space:nowrap" class="ft06">expected&#160;to&#160;soar&#160;higher&#160;by&#160;43.7%&#160;for&#160;IG&#160;to&#160;<money>$1.882&#160;trillion</money>,&#160;</p> <p style="position:absolute;top:669px;left:558px;white-space:nowrap" class="ft06">while&#160;high-yield&#160;supply may&#160;rise&#160;by&#160;13.6%&#160;to&#160;<money>$492&#160;billion</money>.&#160;</p> <p style="position:absolute;top:243px;left:60px;white-space:nowrap" class="ft018">&#160;</p> <p style="position:absolute;top:275px;left:60px;white-space:nowrap" class="ft018">&#160;</p> <p style="position:absolute;top:311px;left:60px;white-space:nowrap" class="ft019">Moody’s</p> <p style="position:absolute;top:318px;left:108px;white-space:nowrap" class="ft020">&#160;</p> <p style="position:absolute;top:311px;left:109px;white-space:nowrap" class="ft019">Analytics&#160;Research&#160;</p> <p style="position:absolute;top:335px;left:60px;white-space:nowrap" class="ft021"><i>Weekly&#160;M</i></p> <p style="position:absolute;top:335px;left:113px;white-space:nowrap" class="ft022"><i>arke</i></p> <p style="position:absolute;top:335px;left:136px;white-space:nowrap" class="ft021"><i>t&#160;Outlook&#160;Contributors:&#160;</i></p> <p style="position:absolute;top:351px;left:60px;white-space:nowrap" class="ft023">&#160;</p> <p style="position:absolute;top:365px;left:60px;white-space:nowrap" class="ft021"><i>Moody's&#160;Analytics/<location value="LU/us.ny.nyc" idsrc="xmltag.org" >New York</location>:&#160;</i></p> <p style="position:absolute;top:381px;left:60px;white-space:nowrap" class="ft029"><person>John Lonski</person>&#160;<br/>Chief Economist&#160;</p> <p style="position:absolute;top:409px;left:60px;white-space:nowrap" class="ft023"><PhoneNo>1.212.553</PhoneNo>.7144&#160;&#160;</p> <p style="position:absolute;top:423px;left:60px;white-space:nowrap" class="ft024"><a href="mailto:john.lonski@moodys.com">john.lonski@moodys.com</a></p> <p style="position:absolute;top:423px;left:183px;white-space:nowrap" class="ft023">&#160;</p> <p style="position:absolute;top:437px;left:60px;white-space:nowrap" class="ft029">&#160;<br/>Yukyung Choi&#160;<br/>Quantitative&#160;Research&#160;<br/>&#160;</p> <p style="position:absolute;top:494px;left:60px;white-space:nowrap" class="ft021"><i>Moody's&#160;Analytics/<location value="LR/asp" idsrc="xmltag.org" >Asia-Pacific</location>:&#160;</i></p> <p style="position:absolute;top:510px;left:60px;white-space:nowrap" class="ft029"><person>Shahana Mukherjee</person>&#160;<br/>Economist&#160;<br/>&#160;</p> <p style="position:absolute;top:553px;left:60px;white-space:nowrap" class="ft021"><i>Moody's&#160;Analytics/<location value="LR/eur" idsrc="xmltag.org" >Europe</location>:</i></p> <p style="position:absolute;top:554px;left:203px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:569px;left:60px;white-space:nowrap" class="ft029"><person>Barbara Teixeira</person>&#160;Araujo&#160;<br/>Economist&#160;<br/>&#160;</p> <p style="position:absolute;top:612px;left:60px;white-space:nowrap" class="ft021"><i>Moody’s&#160;Analytics/<location value="LC/us" idsrc="xmltag.org" >U.S.</location>:&#160;</i></p> <p style="position:absolute;top:627px;left:60px;white-space:nowrap" class="ft023">Mark&#160;Zandi&#160;</p> <p style="position:absolute;top:641px;left:60px;white-space:nowrap" class="ft023">Chief&#160;Economist&#160;</p> <p style="position:absolute;top:655px;left:60px;white-space:nowrap" class="ft023">&#160;</p> <p style="position:absolute;top:669px;left:60px;white-space:nowrap" class="ft023">Michael&#160;Ferlez&#160;</p> <p style="position:absolute;top:682px;left:60px;white-space:nowrap" class="ft023">Economist&#160;</p> <p style="position:absolute;top:696px;left:60px;white-space:nowrap" class="ft023">&#160;</p> <p style="position:absolute;top:718px;left:60px;white-space:nowrap" class="ft019">Editor&#160;</p> <p style="position:absolute;top:734px;left:60px;white-space:nowrap" class="ft029">Reid&#160;Kanaley&#160;<br/>&#160;</p> <p style="position:absolute;top:762px;left:60px;white-space:nowrap" class="ft025"><b>&#160;</b></p> <p style="position:absolute;top:769px;left:60px;white-space:nowrap" class="ft023">Contact<a href="mailto:help@economy.com">:&#160;</a></p> <p style="position:absolute;top:769px;left:104px;white-space:nowrap" class="ft024"><a href="mailto:help@economy.com"><a href="mailto:help@economy.com">help@economy.com</a></a></p> <p style="position:absolute;top:769px;left:202px;white-space:nowrap" class="ft023"><a href="mailto:help@economy.com">&#160;</a></p> <p style="position:absolute;top:783px;left:60px;white-space:nowrap" class="ft029">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:1054px;white-space:nowrap" class="ft07">&#160;</p> </div> <!-- Page 2 --> <a name="2"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft030{font-size:7px;font-family:Times;color:#808080;} .ft031{font-size:13px;font-family:Times;color:#00785a;} .ft032{font-size:22px;font-family:Times;color:#0078bd;} .ft033{font-size:13px;font-family:Times;color:#0078bd;} .ft034{font-size:8px;font-family:Times;color:#000000;} .ft035{font-size:11px;font-family:Times;color:#000000;} .ft036{font-size:11px;font-family:Times;color:#000000;} .ft037{font-size:9px;line-height:16px;font-family:Times;color:#000000;} --> </style> <div id="page2-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727002.png" alt="background image"/> <p style="position:absolute;top:31px;left:257px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:411px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1140px;left:229px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:25px;left:686px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">2&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:58px;left:67px;white-space:nowrap" class="ft011">Credit Markets</p> <p style="position:absolute;top:58px;left:159px;white-space:nowrap" class="ft031">&#160;</p> <p style="position:absolute;top:58px;left:163px;white-space:nowrap" class="ft011">Review&#160;and&#160;Outlook&#160;</p> <p style="position:absolute;top:88px;left:230px;white-space:nowrap" class="ft015">Credit Markets&#160;Review&#160;and Outlook&#160;</p> <p style="position:absolute;top:113px;left:230px;white-space:nowrap" class="ft07">By&#160;<person>John Lonski</person>,&#160;Chief Economist,&#160;Moody’s&#160;Capital&#160;Markets&#160;Research,&#160;Inc.&#160;</p> <p style="position:absolute;top:132px;left:230px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:150px;left:230px;white-space:nowrap" class="ft032">Markets&#160;Avoid Great&#160;Recession’s&#160;Calamities&#160;</p> <p style="position:absolute;top:178px;left:230px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:196px;left:230px;white-space:nowrap" class="ft07">The issuance&#160;of&#160;US$-denominated&#160;high-yield&#160;bonds&#160;has&#160;already&#160;set&#160;a record-high&#160;for&#160;the&#160;month of&#160;August.&#160;</p> <p style="position:absolute;top:214px;left:229px;white-space:nowrap" class="ft07">Thus&#160;far&#160;in&#160;August,&#160;more&#160;than&#160;<money>$42 billion</money>&#160;of&#160;high-yield&#160;bonds&#160;have&#160;been&#160;offered,&#160;which&#160;easily&#160;tops&#160;2012’s&#160;</p> <p style="position:absolute;top:232px;left:229px;white-space:nowrap" class="ft028">previous&#160;month-long record&#160;high&#160;for&#160;August&#160;of&#160;<money>$33&#160;billion</money>.&#160;<br/>The&#160;COVID-19&#160;recession&#160;lasted&#160;just&#160;one month for&#160;high-yield 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style="position:absolute;top:360px;left:229px;white-space:nowrap" class="ft07">yield&#160;bonds&#160;to&#160;<money>$358&#160;billion</money>.&#160;The latter&#160;easily&#160;tops&#160;2017’s&#160;old&#160;record&#160;high&#160;of&#160;<money>$290&#160;billion</money>&#160;for&#160;high-yield bond&#160;</p> <p style="position:absolute;top:378px;left:229px;white-space:nowrap" class="ft028">issuance&#160;during&#160;the&#160;January-August&#160;span.&#160;<br/>What&#160;makes&#160;2020’s&#160;record-breaking&#160;pace&#160;for US$-denominated&#160;high-yield&#160;bond issuance&#160;nothing&#160;less&#160;than&#160;</p> <p style="position:absolute;top:423px;left:229px;white-space:nowrap" class="ft07">remarkable&#160;is&#160;how&#160;it has&#160;occurred&#160;amid&#160;both&#160;a&#160;recession&#160;and&#160;a&#160;steep,&#160;unfinished&#160;ascent&#160;by&#160;the <location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;high-</p> <p 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class="ft07">worrisome&#160;outlook&#160;for&#160;defaults.&#160;Despite the&#160;rise&#160;by&#160;the&#160;default&#160;rate&#160;from&#160;March&#160;2020’s 4.9% to&#160;July’s&#160;8.4%,&#160;</p> <p style="position:absolute;top:541px;left:229px;white-space:nowrap" class="ft07">Bloomberg/<org value="LSE:BARC" idsrc="xmltag.org" >Barclays</org>&#160;high-yield bond&#160;spread has narrowed from&#160;March&#160;23’s cycle&#160;high&#160;of&#160;1,100&#160;basis points&#160;</p> <p style="position:absolute;top:559px;left:229px;white-space:nowrap" class="ft07">to&#160;a&#160;recent&#160;480&#160;bp.&#160;As&#160;shown&#160;in&#160;Figure&#160;1,&#160;the&#160;high-yield&#160;bond&#160;spread’s&#160;latest expansion&#160;and&#160;contraction&#160;</p> <p style="position:absolute;top:577px;left:229px;white-space:nowrap" class="ft07">more&#160;closely&#160;resembles&#160;what&#160;overlapped&#160;2015-2016’s&#160;profits&#160;downturn&#160;than what&#160;occurred in&#160;conjunction&#160;</p> <p style="position:absolute;top:595px;left:229px;white-space:nowrap" class="ft07">with&#160;the&#160;previous&#160;recessions&#160;of&#160;2008-2009&#160;and&#160;2001.&#160;</p> <p style="position:absolute;top:995px;left:855px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:1029px;left:230px;white-space:nowrap" class="ft033">Equity-Sensitive&#160;Default&#160;Risk&#160;Estimate&#160;Concurs&#160;with&#160;Bond&#160;Spreads&#160;&#160;</p> <p style="position:absolute;top:1046px;left:230px;white-space:nowrap" class="ft07">By&#160;underpinning the&#160;market&#160;value&#160;of&#160;business&#160;assets&#160;backing corporate&#160;indebtedness,&#160;the&#160;equity&#160;market&#160;rally&#160;</p> <p style="position:absolute;top:1064px;left:230px;white-space:nowrap" class="ft07">since&#160;late&#160;March has&#160;facilitated&#160;the&#160;narrowing of&#160;high-yield&#160;and&#160;Baa-grade&#160;bond&#160;yield spreads.&#160;Moody’s&#160;</p> <p style="position:absolute;top:979px;left:831px;white-space:nowrap" class="ft01">0.5</p> <p style="position:absolute;top:961px;left:831px;white-space:nowrap" class="ft01">1.5</p> <p style="position:absolute;top:942px;left:831px;white-space:nowrap" class="ft01">2.5</p> <p style="position:absolute;top:923px;left:831px;white-space:nowrap" class="ft01">3.5</p> <p style="position:absolute;top:905px;left:831px;white-space:nowrap" class="ft01">4.5</p> <p style="position:absolute;top:886px;left:831px;white-space:nowrap" class="ft01">5.5</p> <p style="position:absolute;top:867px;left:831px;white-space:nowrap" class="ft01">6.5</p> <p style="position:absolute;top:849px;left:831px;white-space:nowrap" class="ft01">7.5</p> <p style="position:absolute;top:830px;left:831px;white-space:nowrap" class="ft01">8.5</p> <p style="position:absolute;top:811px;left:831px;white-space:nowrap" class="ft01">9.5</p> <p style="position:absolute;top:793px;left:831px;white-space:nowrap" class="ft01">10.5</p> <p style="position:absolute;top:774px;left:831px;white-space:nowrap" class="ft01">11.5</p> <p style="position:absolute;top:755px;left:831px;white-space:nowrap" class="ft01">12.5</p> <p style="position:absolute;top:737px;left:831px;white-space:nowrap" class="ft01">13.5</p> <p style="position:absolute;top:718px;left:831px;white-space:nowrap" class="ft01">14.5</p> <p style="position:absolute;top:992px;left:256px;white-space:nowrap" class="ft034">Dec-94&#160;Sep-96&#160;Jun-98&#160;Mar-00&#160;Dec-01&#160;Sep-03&#160;Jun-05&#160;Mar-07&#160;Dec-08&#160;Sep-10&#160;Jun-12&#160;Mar-14&#160;Dec-15&#160;Sep-17&#160;Jun-19&#160;Mar-21</p> <p style="position:absolute;top:979px;left:239px;white-space:nowrap" class="ft01">200</p> <p style="position:absolute;top:952px;left:240px;white-space:nowrap" class="ft01">375</p> <p style="position:absolute;top:925px;left:239px;white-space:nowrap" class="ft01">550</p> <p style="position:absolute;top:898px;left:240px;white-space:nowrap" class="ft01">725</p> <p style="position:absolute;top:871px;left:239px;white-space:nowrap" class="ft01">900</p> <p style="position:absolute;top:844px;left:232px;white-space:nowrap" class="ft01">1,075</p> <p style="position:absolute;top:817px;left:232px;white-space:nowrap" class="ft01">1,250</p> <p style="position:absolute;top:790px;left:232px;white-space:nowrap" class="ft01">1,425</p> <p style="position:absolute;top:763px;left:231px;white-space:nowrap" class="ft01">1,600</p> <p style="position:absolute;top:736px;left:233px;white-space:nowrap" class="ft01">1,775</p> <p style="position:absolute;top:709px;left:231px;white-space:nowrap" class="ft01">1,950</p> <p style="position:absolute;top:679px;left:402px;white-space:nowrap" class="ft037"><location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;High-Yield&#160;Bond&#160;Spread:&#160;basis points (bp)&#160;(L)<br/><location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;High-Yield&#160;Default&#160;Rate:&#160;%,&#160;acutal&#160;&amp;&#160;predicted&#160;by&#160;MIS&#160;(R)</p> <p style="position:absolute;top:626px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;1:&#160;High-Yield&#160;Spreads&#160;Stage&#160;Unprecedented&#160;Narrowing&#160;Amid&#160;Credit&#160;Analyst&#160;Expectations</b></p> <p style="position:absolute;top:642px;left:290px;white-space:nowrap" class="ft035"><b>of&#160;a&#160;Higher-than-12%&#160;Default&#160;Rate</b></p> <p style="position:absolute;top:659px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;Bloomberg/<org value="LSE:BARC" idsrc="xmltag.org" >Barclays</org>,&#160;Moody's&#160;Investors&#160;Service&#160;(MIS),&#160;Moody's&#160;Analytics</i></p> </div> <!-- Page 3 --> <a name="3"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page3-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727003.png" alt="background image"/> <p style="position:absolute;top:31px;left:257px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:411px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1140px;left:229px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:25px;left:686px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">3&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:58px;left:67px;white-space:nowrap" class="ft011">Credit Markets</p> <p style="position:absolute;top:58px;left:159px;white-space:nowrap" class="ft031">&#160;</p> <p style="position:absolute;top:58px;left:163px;white-space:nowrap" class="ft011">Review&#160;and&#160;Outlook&#160;</p> <p style="position:absolute;top:87px;left:230px;white-space:nowrap" class="ft07">Analytics&#160;expected&#160;default&#160;frequency&#160;metric&#160;estimates&#160;the&#160;probability&#160;of&#160;default one&#160;year out.&#160;In&#160;short,&#160;a&#160;</p> <p style="position:absolute;top:105px;left:230px;white-space:nowrap" class="ft07">firm’s&#160;EDF&#160;will&#160;be greater&#160;(i)&#160;the lower&#160;is&#160;the&#160;market&#160;value&#160;of&#160;its&#160;net&#160;worth,&#160;or the&#160;difference from&#160;the&#160;market&#160;</p> <p style="position:absolute;top:123px;left:230px;white-space:nowrap" class="ft07">value&#160;of&#160;business&#160;assets&#160;less&#160;the par&#160;value&#160;of&#160;outstanding&#160;debt,&#160;and&#160;(ii)&#160;the more&#160;volatile&#160;is&#160;the market&#160;value&#160;</p> <p style="position:absolute;top:141px;left:230px;white-space:nowrap" class="ft028">of&#160;a firm’s&#160;business&#160;assets.&#160;<br/>After&#160;rising&#160;from&#160;year-end&#160;2019’s&#160;4.2%&#160;to&#160;March&#160;18,&#160;2020’s&#160;cycle high&#160;of&#160;10.6%,&#160;the&#160;unweighted&#160;average&#160;</p> <p style="position:absolute;top:187px;left:230px;white-space:nowrap" class="ft07">EDF&#160;of&#160;<location value="LC/us" idsrc="xmltag.org" >U.S.</location>/Canadian high-yield&#160;issuers&#160;has&#160;subsequently&#160;dropped&#160;to&#160;August&#160;12’s 5.4%.&#160;The&#160;path&#160;taken&#160;by&#160;</p> <p style="position:absolute;top:205px;left:230px;white-space:nowrap" class="ft07">the high-yield&#160;EDF&#160;metric&#160;is&#160;qualitatively&#160;consistent&#160;with&#160;that of&#160;the&#160;high-yield&#160;bond&#160;spread.&#160;Thus,&#160;both&#160;</p> <p style="position:absolute;top:223px;left:230px;white-space:nowrap" class="ft07">market&#160;driven&#160;estimates&#160;of&#160;future default&#160;risk&#160;are at odds&#160;with the default outlook&#160;derived&#160;from&#160;years&#160;of&#160;</p> <p style="position:absolute;top:241px;left:230px;white-space:nowrap" class="ft07">detailed&#160;credit&#160;analysis.&#160;</p> <p style="position:absolute;top:641px;left:855px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:675px;left:230px;white-space:nowrap" class="ft033">Equities&#160;Are&#160;Close&#160;to&#160;a&#160;V-Shaped&#160;Recovery&#160;&#160;</p> <p style="position:absolute;top:692px;left:230px;white-space:nowrap" class="ft07">Though&#160;the&#160;shape of&#160;the&#160;unfolding&#160;business&#160;cycle upturn&#160;remains&#160;unresolved,&#160;the&#160;ongoing recovery&#160;by&#160;the&#160;</p> <p style="position:absolute;top:710px;left:230px;white-space:nowrap" class="ft028"><location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;equity&#160;market has&#160;been&#160;unequivocally&#160;V-shaped.&#160;<br/>The Great&#160;Recession&#160;overlapped&#160;a&#160;56.6%&#160;plunge by&#160;the&#160;market value&#160;of&#160;<location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;common&#160;stock from&#160;an&#160;</p> <p style="position:absolute;top:756px;left:230px;white-space:nowrap" class="ft07"><chron>October&#160;2007</chron>&#160;peak to&#160;March&#160;2009&#160;bottom.&#160;Not&#160;until&#160;January&#160;2013&#160;did&#160;the&#160;<location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;equity&#160;market return&#160;to&#160;its&#160;</p> <p style="position:absolute;top:774px;left:230px;white-space:nowrap" class="ft028">erstwhile&#160;zenith of&#160;October&#160;2007.&#160;<br/>By&#160;contrast,&#160;after&#160;plummeting&#160;35.1%&#160;from&#160;a&#160;February&#160;19,&#160;2020&#160;current&#160;zenith to&#160;a&#160;March 23,&#160;2020&#160;trough,&#160;</p> <p style="position:absolute;top:819px;left:230px;white-space:nowrap" class="ft07">the market&#160;value&#160;of&#160;<location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;common&#160;equity&#160;had&#160;rebounded&#160;53.4%&#160;from&#160;March 23’s&#160;low&#160;as&#160;of&#160;August&#160;13.&#160;</p> <p style="position:absolute;top:837px;left:230px;white-space:nowrap" class="ft07">August-to-date’s&#160;average&#160;valuation&#160;of&#160;the <location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;equity&#160;market now&#160;exceeds&#160;its&#160;record-high&#160;return&#160;to&#160;its&#160;</p> <p style="position:absolute;top:855px;left:230px;white-space:nowrap" class="ft07"><chron>October&#160;2007</chron>&#160;high,&#160;merely&#160;six&#160;months&#160;may&#160;pass&#160;before&#160;the&#160;equity&#160;market&#160;returns&#160;to&#160;its&#160;current record-high&#160;</p> <p style="position:absolute;top:873px;left:230px;white-space:nowrap" class="ft07">of&#160;February&#160;2020.&#160;</p> <p style="position:absolute;top:625px;left:825px;white-space:nowrap" class="ft01">100</p> <p style="position:absolute;top:639px;left:250px;white-space:nowrap" class="ft034">Jan-96</p> <p style="position:absolute;top:639px;left:293px;white-space:nowrap" class="ft034">Jan-98&#160;Jan-00</p> <p style="position:absolute;top:639px;left:379px;white-space:nowrap" class="ft034">Jan-02</p> <p style="position:absolute;top:639px;left:422px;white-space:nowrap" class="ft034">Jan-04</p> <p style="position:absolute;top:639px;left:465px;white-space:nowrap" class="ft034">Jan-06</p> <p style="position:absolute;top:639px;left:508px;white-space:nowrap" class="ft034">Jan-08</p> <p style="position:absolute;top:639px;left:552px;white-space:nowrap" class="ft034">Jan-10</p> <p style="position:absolute;top:639px;left:595px;white-space:nowrap" class="ft034">Jan-12</p> <p style="position:absolute;top:639px;left:638px;white-space:nowrap" class="ft034">Jan-14</p> <p style="position:absolute;top:639px;left:681px;white-space:nowrap" class="ft034">Jan-16</p> <p style="position:absolute;top:639px;left:724px;white-space:nowrap" class="ft034">Jan-18</p> <p style="position:absolute;top:639px;left:766px;white-space:nowrap" class="ft034">Jan-20</p> <p style="position:absolute;top:625px;left:236px;white-space:nowrap" class="ft01">0.0</p> <p style="position:absolute;top:608px;left:238px;white-space:nowrap" class="ft01">1.0</p> <p style="position:absolute;top:591px;left:237px;white-space:nowrap" class="ft01">2.0</p> <p style="position:absolute;top:574px;left:237px;white-space:nowrap" class="ft01">3.0</p> <p style="position:absolute;top:557px;left:236px;white-space:nowrap" class="ft01">4.0</p> <p style="position:absolute;top:540px;left:237px;white-space:nowrap" class="ft01">5.0</p> <p style="position:absolute;top:523px;left:237px;white-space:nowrap" class="ft01">6.0</p> <p style="position:absolute;top:506px;left:237px;white-space:nowrap" class="ft01">7.0</p> <p style="position:absolute;top:489px;left:236px;white-space:nowrap" class="ft01">8.0</p> <p style="position:absolute;top:472px;left:237px;white-space:nowrap" class="ft01">9.0</p> <p style="position:absolute;top:455px;left:231px;white-space:nowrap" class="ft01">10.0</p> <p style="position:absolute;top:438px;left:233px;white-space:nowrap" class="ft01">11.0</p> <p style="position:absolute;top:421px;left:232px;white-space:nowrap" class="ft01">12.0</p> <p style="position:absolute;top:404px;left:232px;white-space:nowrap" class="ft01">13.0</p> <p style="position:absolute;top:387px;left:231px;white-space:nowrap" class="ft01">14.0</p> <p style="position:absolute;top:370px;left:232px;white-space:nowrap" class="ft01">15.0</p> <p style="position:absolute;top:325px;left:389px;white-space:nowrap" class="ft026">Recessions are&#160;shaded<br/><location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;High-Yield&#160;Default&#160;Rate:&#160;%,&#160;actual&#160;&amp;&#160;predicted&#160;by&#160;MIS<br/>Average&#160;Expected&#160;Default&#160;Frequency&#160;(EDF)&#160;of&#160;High-Yield&#160;Issuers:&#160;%</p> <p style="position:absolute;top:271px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;2:&#160;Recent&#160;Average&#160;High-Yield&#160;Expected&#160;Default&#160;Frequency&#160;(EDF)&#160;More Closely&#160;Resembles&#160;</b></p> <p style="position:absolute;top:288px;left:290px;white-space:nowrap" class="ft035"><b>2015-2016's&#160;&#160;Episode&#160;Compared&#160;to&#160;Paths&#160;That&#160;Overlapped&#160;Recessions&#160;of&#160;2008-2009&#160;&#160;and&#160;2001&#160;</b></p> <p style="position:absolute;top:304px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;Moody's&#160;Investors&#160;Service,&#160;NBER,&#160;Moody’s&#160;Analytics&#160;</i></p> </div> <!-- Page 4 --> <a name="4"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft038{font-size:9px;line-height:17px;font-family:Times;color:#000000;} --> </style> <div id="page4-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727004.png" alt="background image"/> <p style="position:absolute;top:31px;left:257px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:411px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1140px;left:229px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:25px;left:686px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">4&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:58px;left:67px;white-space:nowrap" class="ft011">Credit Markets</p> <p style="position:absolute;top:58px;left:159px;white-space:nowrap" class="ft031">&#160;</p> <p style="position:absolute;top:58px;left:163px;white-space:nowrap" class="ft011">Review&#160;and&#160;Outlook&#160;</p> <p style="position:absolute;top:463px;left:860px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:497px;left:230px;white-space:nowrap" class="ft033">M2’s&#160;Lift-Off&#160;Drives&#160;Equities&#160;Higher&#160;</p> <p style="position:absolute;top:514px;left:230px;white-space:nowrap" class="ft07">A&#160;now&#160;much&#160;more&#160;stimulatory&#160;monetary&#160;policy&#160;helps&#160;to explain&#160;the&#160;equity&#160;market’s&#160;much&#160;faster&#160;recovery&#160;</p> <p style="position:absolute;top:532px;left:230px;white-space:nowrap" class="ft07">from&#160;its&#160;recession&#160;lows.&#160;Consider the rate&#160;of&#160;growth&#160;for&#160;the&#160;M2 monetary&#160;aggregate.&#160;Prior&#160;to&#160;the&#160;start&#160;of&#160;the&#160;</p> <p style="position:absolute;top:550px;left:230px;white-space:nowrap" class="ft07">COVID-19&#160;recession,&#160;the&#160;moving 13-week&#160;average of&#160;M2 was&#160;up&#160;by&#160;6.7%&#160;year-over-year.&#160;By&#160;the&#160;end&#160;of&#160;July&#160;</p> <p style="position:absolute;top:568px;left:229px;white-space:nowrap" class="ft028">2020,&#160;M2’s&#160;moving&#160;13-week&#160;average&#160;was&#160;up&#160;by&#160;a&#160;record-high&#160;22.6%&#160;from&#160;a&#160;year earlier.&#160;<br/>In&#160;contrast,&#160;the&#160;year-over-year&#160;growth&#160;rate&#160;for M2’s&#160;moving&#160;13-week&#160;average barely&#160;rose&#160;from&#160;the 5.3%&#160;just&#160;</p> <p style="position:absolute;top:614px;left:230px;white-space:nowrap" class="ft07">prior&#160;to&#160;the&#160;December 2007&#160;start&#160;of&#160;the&#160;Great&#160;Recession&#160;to&#160;5.9%&#160;five-months&#160;later.&#160;Moreover,&#160;during the&#160;</p> <p style="position:absolute;top:632px;left:230px;white-space:nowrap" class="ft07">Great&#160;Recession,&#160;the year-over-year&#160;increase&#160;by&#160;M2’s&#160;moving 13-week&#160;average peaked&#160;at&#160;the 9.8%&#160;of&#160;the&#160;</p> <p style="position:absolute;top:650px;left:229px;white-space:nowrap" class="ft07">span-ended&#160;March&#160;18,&#160;2009,&#160;which&#160;was&#160;much slower&#160;than&#160;its&#160;recent&#160;record&#160;fast&#160;pace.&#160;</p> <p style="position:absolute;top:1050px;left:854px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:445px;left:849px;white-space:nowrap" class="ft06">0</p> <p style="position:absolute;top:171px;left:849px;white-space:nowrap" class="ft06">1</p> <p style="position:absolute;top:460px;left:260px;white-space:nowrap" class="ft034">Jan-07&#160;Nov-07&#160;Sep-08&#160;Jul-09&#160;May-10&#160;Mar-11&#160;Jan-12&#160;Nov-12&#160;Sep-13&#160;Jul-14&#160;May-15&#160;Mar-16&#160;Jan-17&#160;Nov-17&#160;Sep-18&#160;Jul-19&#160;May-20</p> <p style="position:absolute;top:445px;left:238px;white-space:nowrap" class="ft06"><money>$6.0</money></p> <p style="position:absolute;top:423px;left:238px;white-space:nowrap" class="ft06"><money>$8.5</money></p> <p style="position:absolute;top:400px;left:234px;white-space:nowrap" class="ft06"><money>$11.0</money></p> <p style="position:absolute;top:377px;left:233px;white-space:nowrap" class="ft06"><money>$13.5</money></p> <p style="position:absolute;top:354px;left:233px;white-space:nowrap" class="ft06"><money>$16.0</money></p> <p style="position:absolute;top:331px;left:233px;white-space:nowrap" class="ft06"><money>$18.5</money></p> <p style="position:absolute;top:308px;left:233px;white-space:nowrap" class="ft06"><money>$21.0</money></p> <p style="position:absolute;top:285px;left:232px;white-space:nowrap" class="ft06"><money>$23.5</money></p> <p style="position:absolute;top:262px;left:232px;white-space:nowrap" class="ft06"><money>$26.0</money></p> <p style="position:absolute;top:240px;left:232px;white-space:nowrap" class="ft06"><money>$28.5</money></p> <p style="position:absolute;top:217px;left:233px;white-space:nowrap" class="ft06"><money>$31.0</money></p> <p style="position:absolute;top:194px;left:232px;white-space:nowrap" class="ft06"><money>$33.5</money></p> <p style="position:absolute;top:171px;left:231px;white-space:nowrap" class="ft06"><money>$36.0</money></p> <p style="position:absolute;top:152px;left:330px;white-space:nowrap" class="ft06">Recessions are&#160;shaded</p> <p style="position:absolute;top:152px;left:486px;white-space:nowrap" class="ft06">Market&#160;Value&#160;of <location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;Common&#160;Stock:&#160;$&#160;trillions,&#160;Wilshire&#160;Index</p> <p style="position:absolute;top:90px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;3:&#160;Great&#160;Recession&#160;Saw&#160;63&#160;&#160;Months&#160;Pass&#160;Before <location value="LC/us" idsrc="xmltag.org" >U.S.</location>&#160;Equities&#160;Returned&#160;to&#160;October&#160;2007's&#160;&#160;<org>Cycle High</org>...&#160;</b></p> <p style="position:absolute;top:106px;left:290px;white-space:nowrap" class="ft035"><b>COVID-19&#160;Wait&#160;May Be&#160;Only 6&#160;Months</b></p> <p style="position:absolute;top:123px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;<org>Dow&#160;Jones</org>,&#160;NBER,&#160;Moody's&#160;Analytics&#160;&#160;&#160;&#160;&#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160;</i></p> <p style="position:absolute;top:1033px;left:845px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:762px;left:845px;white-space:nowrap" class="ft01">1</p> <p style="position:absolute;top:1046px;left:263px;white-space:nowrap" class="ft034">Jan-07&#160;Dec-07&#160;Nov-08&#160;Oct-09&#160;Sep-10&#160;Aug-11</p> <p style="position:absolute;top:1046px;left:487px;white-space:nowrap" class="ft034">Jul-12</p> <p style="position:absolute;top:1046px;left:523px;white-space:nowrap" class="ft034">Jun-13&#160;May-14&#160;Apr-15&#160;Mar-16&#160;Feb-17&#160;Jan-18&#160;Dec-18&#160;Nov-19&#160;Oct-20</p> <p style="position:absolute;top:1033px;left:237px;white-space:nowrap" class="ft01">0.0%</p> <p style="position:absolute;top:1004px;left:238px;white-space:nowrap" class="ft01">2.5%</p> <p style="position:absolute;top:974px;left:238px;white-space:nowrap" class="ft01">5.0%</p> <p style="position:absolute;top:945px;left:239px;white-space:nowrap" class="ft01">7.5%</p> <p style="position:absolute;top:915px;left:232px;white-space:nowrap" class="ft01">10.0%</p> <p style="position:absolute;top:886px;left:233px;white-space:nowrap" class="ft01">12.5%</p> <p style="position:absolute;top:856px;left:233px;white-space:nowrap" class="ft01">15.0%</p> <p style="position:absolute;top:827px;left:234px;white-space:nowrap" class="ft01">17.5%</p> <p style="position:absolute;top:797px;left:231px;white-space:nowrap" class="ft01">20.0%</p> <p style="position:absolute;top:768px;left:232px;white-space:nowrap" class="ft01">22.5%</p> <p style="position:absolute;top:734px;left:389px;white-space:nowrap" class="ft038">Recessions are&#160;shaded<br/>M2&#160;Monetary&#160;Aggregate:&#160;yy&#160;%&#160;change&#160;if&#160;moving&#160;three-month&#160;average</p> <p style="position:absolute;top:681px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;4:&#160;M2's&#160;Record&#160;Fast&#160;Growth&#160;Helps&#160;Explain&#160;Why&#160;Stocks&#160;and&#160;Corporate&#160;Bonds&#160;Have&#160;Fared</b></p> <p style="position:absolute;top:697px;left:290px;white-space:nowrap" class="ft035"><b>So&#160;Much&#160;Better&#160;During&#160;Current&#160;Slump&#160;Compared&#160;to&#160;Great&#160;Recession</b></p> <p style="position:absolute;top:714px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;<org>Federal&#160;Reserve</org>,&#160;NBER,&#160;Moody's&#160;Analytics&#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;</i></p> </div> <!-- Page 5 --> <a name="5"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page5-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727005.png" alt="background image"/> <p style="position:absolute;top:31px;left:257px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:411px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1140px;left:229px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:25px;left:686px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">5&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:58px;left:67px;white-space:nowrap" class="ft011">Credit Markets</p> <p style="position:absolute;top:58px;left:159px;white-space:nowrap" class="ft031">&#160;</p> <p style="position:absolute;top:58px;left:163px;white-space:nowrap" class="ft011">Review&#160;and&#160;Outlook&#160;</p> <p style="position:absolute;top:87px;left:230px;white-space:nowrap" class="ft07">Assuming&#160;a&#160;22%&#160;annualized&#160;rebound&#160;by&#160;third-quarter&#160;2020’s&#160;nominal&#160;GDP&#160;from&#160;the&#160;second&#160;quarter,&#160;if&#160;the&#160;</p> <p style="position:absolute;top:105px;left:230px;white-space:nowrap" class="ft07">M2 measure&#160;of&#160;the&#160;money&#160;supply&#160;remains&#160;at&#160;its&#160;third-quarter-to-date&#160;reading,&#160;M2 will&#160;approximate an&#160;</p> <p style="position:absolute;top:123px;left:229px;white-space:nowrap" class="ft07">extraordinarily&#160;high 90%&#160;of&#160;nominal&#160;GDP.&#160;Prior&#160;to&#160;2020,&#160;M2&#160;peaked&#160;at 70.5%&#160;of&#160;nominal&#160;GDP&#160;in&#160;2019’s&#160;</p> <p style="position:absolute;top:141px;left:230px;white-space:nowrap" class="ft028">final&#160;quarter,&#160;while&#160;averaging&#160;69%&#160;of&#160;GDP&#160;during&#160;the five-years-ended&#160;2019.&#160;<br/>If&#160;we&#160;assume that&#160;the&#160;amount of&#160;M2&#160;that the private-&#160;and public-sector&#160;want&#160;to&#160;hold&#160;is 70.5%, as&#160;opposed&#160;</p> <p style="position:absolute;top:187px;left:229px;white-space:nowrap" class="ft07">to&#160;90%,&#160;of&#160;GDP,&#160;then&#160;the difference between&#160;actual&#160;M2,&#160;or&#160;90%&#160;of&#160;GDP,&#160;and&#160;desired&#160;M2,&#160;or&#160;70.5%&#160;of&#160;GDP,&#160;</p> <p style="position:absolute;top:205px;left:229px;white-space:nowrap" class="ft07">is&#160;roughly&#160;<money>$4&#160;trillion</money>.&#160;Today’s&#160;unprecedented&#160;excess&#160;cash&#160;balances&#160;of&#160;between&#160;<money>$3.5&#160;trillion</money>&#160;and&#160;<money>$4&#160;trillion</money>&#160;</p> <p style="position:absolute;top:223px;left:229px;white-space:nowrap" class="ft07">represent&#160;a&#160;good&#160;deal&#160;of&#160;“dry&#160;powder” with which&#160;to&#160;finance&#160;the&#160;purchase&#160;of&#160;financial&#160;assets&#160;and&#160;fund&#160;</p> <p style="position:absolute;top:241px;left:229px;white-space:nowrap" class="ft07">business&#160;spending on&#160;staff&#160;and&#160;capital&#160;equipment,&#160;as&#160;well&#160;as&#160;household&#160;expenditures.&#160;</p> <p style="position:absolute;top:278px;left:230px;white-space:nowrap" class="ft033">Ultra-Low&#160;Benchmark&#160;Rates&#160;Dull&#160;Recession’s&#160;Sting&#160;</p> <p style="position:absolute;top:295px;left:230px;white-space:nowrap" class="ft07">In&#160;addition,&#160;benchmark&#160;interest rates&#160;have&#160;been&#160;much&#160;lower compared&#160;to&#160;their&#160;averages&#160;of&#160;the&#160;Great&#160;</p> <p style="position:absolute;top:313px;left:230px;white-space:nowrap" class="ft07">Recession.&#160;For example,&#160;fed&#160;funds&#160;0.48%&#160;average since&#160;February&#160;2020&#160;is&#160;but a&#160;fraction&#160;of&#160;its&#160;1.44%&#160;average&#160;</p> <p style="position:absolute;top:331px;left:230px;white-space:nowrap" class="ft07">from&#160;the&#160;Great&#160;Recession,&#160;while the&#160;10-year&#160;Treasury&#160;yield’s&#160;0.70%&#160;average since&#160;February&#160;is&#160;far&#160;under&#160;its&#160;</p> <p style="position:absolute;top:349px;left:230px;white-space:nowrap" class="ft07">3.49%&#160;average&#160;during the Great Recession.&#160;</p> <p style="position:absolute;top:754px;left:862px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:788px;left:230px;white-space:nowrap" class="ft033">Baa3 EDF&#160;Metric&#160;Fell&#160;Well&#160;Short&#160;of&#160;Great&#160;Recession Highs&#160;</p> <p style="position:absolute;top:805px;left:230px;white-space:nowrap" class="ft07">The&#160;Baa3&#160;ratings&#160;notch is&#160;the&#160;lowest&#160;rung of&#160;the investment-grade&#160;ratings&#160;ladder.&#160;Because&#160;some&#160;</p> <p style="position:absolute;top:823px;left:229px;white-space:nowrap" class="ft07">institutional&#160;investors&#160;are&#160;prohibited&#160;from&#160;holding&#160;speculative-grade,&#160;or&#160;high-yield,&#160;bonds, yield&#160;spreads&#160;tend&#160;</p> <p style="position:absolute;top:841px;left:229px;white-space:nowrap" class="ft028">to&#160;widen significantly&#160;from&#160;the Baa2 to&#160;Baa3 ratings.&#160;<br/>Despite&#160;how&#160;fourth-quarter&#160;2019's&#160;<money>$658&#160;billion</money>&#160;of&#160;outstanding Baa3-rated&#160;U.S.&#160;corporate bonds&#160;was&#160;well&#160;</p> <p style="position:absolute;top:887px;left:229px;white-space:nowrap" class="ft07">above&#160;the&#160;<money>$294&#160;billion</money>&#160;of&#160;2007's&#160;final&#160;quarter,&#160;the&#160;estimated&#160;default risk&#160;of&#160;the Baa3 corporates&#160;during&#160;the&#160;</p> <p style="position:absolute;top:905px;left:229px;white-space:nowrap" class="ft028">COVID-19&#160;slump&#160;has&#160;fallen&#160;considerably&#160;short&#160;of&#160;what held&#160;during&#160;the&#160;Great&#160;Recession.&#160;<br/>During the&#160;Great&#160;Recession,&#160;the moving 20-day&#160;average&#160;for&#160;the&#160;unweighted&#160;average&#160;EDF&#160;metric&#160;of&#160;Baa3-</p> <p style="position:absolute;top:950px;left:230px;white-space:nowrap" class="ft07">rated&#160;nonfinancial&#160;company&#160;issuers&#160;from&#160;the&#160;U.S.&#160;and&#160;Canada&#160;peaked&#160;at&#160;the&#160;2.06%&#160;of&#160;March 17,&#160;2009.&#160;By&#160;</p> <p style="position:absolute;top:968px;left:230px;white-space:nowrap" class="ft07">contrast&#160;for the COVID-19&#160;recession,&#160;the&#160;moving 20-day&#160;average&#160;of&#160;the&#160;average&#160;Baa3 EDF&#160;metric&#160;peaked&#160;at&#160;</p> <p style="position:absolute;top:986px;left:230px;white-space:nowrap" class="ft07">the lower 1.42%&#160;of&#160;the&#160;span-ended&#160;April&#160;7,&#160;2020.&#160;As&#160;of&#160;August&#160;7, the&#160;20-day&#160;average&#160;of&#160;the&#160;average&#160;Baa3&#160;</p> <p style="position:absolute;top:1004px;left:230px;white-space:nowrap" class="ft028">EDF&#160;eased&#160;to&#160;0.69%.&#160;<br/>Following the&#160;Great&#160;Recession,&#160;the&#160;average&#160;Baa3&#160;EDF&#160;did&#160;not ease to&#160;0.69%&#160;until&#160;August&#160;5,&#160;2009,&#160;or&#160;a&#160;little&#160;</p> <p style="position:absolute;top:1050px;left:230px;white-space:nowrap" class="ft07">more&#160;than&#160;a&#160;month&#160;into&#160;the&#160;record&#160;long&#160;business-cycle&#160;upturn&#160;of&#160;July&#160;2009&#160;through&#160;February&#160;2020.&#160;</p> <p style="position:absolute;top:1068px;left:229px;white-space:nowrap" class="ft07">Perhaps,&#160;the&#160;median&#160;Baa3&#160;EDF&#160;is&#160;again&#160;telling us&#160;that&#160;the&#160;COVID-19&#160;recession has passed.&#160;</p> <p style="position:absolute;top:737px;left:832px;white-space:nowrap" class="ft06">100</p> <p style="position:absolute;top:750px;left:253px;white-space:nowrap" class="ft034">Dec-05</p> <p style="position:absolute;top:750px;left:299px;white-space:nowrap" class="ft034">Mar-07</p> <p style="position:absolute;top:750px;left:346px;white-space:nowrap" class="ft034">Jun-08</p> <p style="position:absolute;top:750px;left:391px;white-space:nowrap" class="ft034">Sep-09</p> <p style="position:absolute;top:750px;left:437px;white-space:nowrap" class="ft034">Dec-10</p> <p style="position:absolute;top:750px;left:483px;white-space:nowrap" class="ft034">Mar-12</p> <p style="position:absolute;top:750px;left:530px;white-space:nowrap" class="ft034">Jun-13</p> <p style="position:absolute;top:750px;left:575px;white-space:nowrap" class="ft034">Sep-14</p> <p style="position:absolute;top:750px;left:621px;white-space:nowrap" class="ft034">Dec-15</p> <p style="position:absolute;top:750px;left:667px;white-space:nowrap" class="ft034">Mar-17</p> <p style="position:absolute;top:750px;left:714px;white-space:nowrap" class="ft034">Jun-18</p> <p style="position:absolute;top:750px;left:759px;white-space:nowrap" class="ft034">Sep-19</p> <p style="position:absolute;top:750px;left:804px;white-space:nowrap" class="ft034">Dec-20</p> <p style="position:absolute;top:737px;left:231px;white-space:nowrap" class="ft06">0.00</p> <p style="position:absolute;top:711px;left:232px;white-space:nowrap" class="ft06">0.50</p> <p style="position:absolute;top:686px;left:233px;white-space:nowrap" class="ft06">1.00</p> <p style="position:absolute;top:661px;left:234px;white-space:nowrap" class="ft06">1.50</p> <p style="position:absolute;top:635px;left:232px;white-space:nowrap" class="ft06">2.00</p> <p style="position:absolute;top:610px;left:233px;white-space:nowrap" class="ft06">2.50</p> <p style="position:absolute;top:584px;left:232px;white-space:nowrap" class="ft06">3.00</p> <p style="position:absolute;top:559px;left:232px;white-space:nowrap" class="ft06">3.50</p> <p style="position:absolute;top:534px;left:231px;white-space:nowrap" class="ft06">4.00</p> <p style="position:absolute;top:508px;left:232px;white-space:nowrap" class="ft06">4.50</p> <p style="position:absolute;top:483px;left:232px;white-space:nowrap" class="ft06">5.00</p> <p style="position:absolute;top:458px;left:232px;white-space:nowrap" class="ft06">5.50</p> <p style="position:absolute;top:440px;left:319px;white-space:nowrap" class="ft06">Recessions are&#160;shaded</p> <p style="position:absolute;top:440px;left:485px;white-space:nowrap" class="ft06">10-year&#160;Treasury&#160;Yield:&#160;%</p> <p style="position:absolute;top:440px;left:670px;white-space:nowrap" class="ft06">Federal&#160;Funds&#160;Rate:&#160;%</p> <p style="position:absolute;top:380px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;5:&#160;Ultra-Low&#160;Benchmark&#160;Interest&#160;Rates&#160;of&#160;COVID-19&#160;Slump&#160;Help&#160;Explain&#160;Rapid&#160;Recovery</b></p> <p style="position:absolute;top:397px;left:290px;white-space:nowrap" class="ft035"><b>by&#160;Equities&#160;Compared&#160;to&#160;Great&#160;Recession</b></p> <p style="position:absolute;top:413px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;Federal&#160;Reserve,&#160;NBER,&#160;Moody’s&#160;Analytics&#160;</i></p> </div> <!-- Page 6 --> <a name="6"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft039{font-size:10px;line-height:19px;font-family:Times;color:#000000;} --> </style> <div id="page6-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727006.png" alt="background image"/> <p style="position:absolute;top:31px;left:257px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:411px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1140px;left:229px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:25px;left:686px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">6&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:58px;left:67px;white-space:nowrap" class="ft011">Credit Markets</p> <p style="position:absolute;top:58px;left:159px;white-space:nowrap" class="ft031">&#160;</p> <p style="position:absolute;top:58px;left:163px;white-space:nowrap" class="ft011">Review&#160;and&#160;Outlook&#160;</p> <p style="position:absolute;top:463px;left:860px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:497px;left:230px;white-space:nowrap" class="ft033">Baa3&#160;Spreads&#160;Never&#160;Approached&#160;Great&#160;Recession&#160;Bands&#160;</p> <p style="position:absolute;top:514px;left:230px;white-space:nowrap" class="ft07">As&#160;estimated&#160;by&#160;Moody’s&#160;Analytics,&#160;the&#160;median&#160;yield&#160;spread&#160;over&#160;U.S.&#160;Treasuries&#160;for 10-year&#160;Baa3-rated&#160;</p> <p style="position:absolute;top:532px;left:229px;white-space:nowrap" class="ft07">corporate&#160;bonds&#160;last peaked&#160;at&#160;the 450&#160;bp&#160;of&#160;March&#160;24,&#160;2020.&#160;Helped&#160;by&#160;the Fed’s&#160;extraordinary&#160;support&#160;of&#160;</p> <p style="position:absolute;top:550px;left:229px;white-space:nowrap" class="ft07">investment-grade corporate&#160;bonds&#160;that&#160;was&#160;extended&#160;to&#160;companies&#160;incurring&#160;fallen&#160;angel&#160;downgrades&#160;after&#160;</p> <p style="position:absolute;top:568px;left:229px;white-space:nowrap" class="ft07"><chron>March&#160;23,</chron>&#160;the&#160;median&#160;Baa3&#160;spread&#160;has&#160;since&#160;narrowed&#160;to&#160;August&#160;12’s&#160;278&#160;bp.&#160;In&#160;addition,&#160;the narrowing&#160;of&#160;</p> <p style="position:absolute;top:586px;left:229px;white-space:nowrap" class="ft028">the Baa3&#160;spread&#160;was&#160;abetted&#160;by&#160;a&#160;less&#160;uncertain&#160;business&#160;outlook&#160;and&#160;ample systemic&#160;liquidity.&#160;<br/>Finally,&#160;spread&#160;narrowing&#160;at&#160;the&#160;Baa3&#160;rating&#160;was&#160;also&#160;facilitated&#160;by&#160;the&#160;many&#160;fallen-angel&#160;downgrades&#160;since&#160;</p> <p style="position:absolute;top:632px;left:229px;white-space:nowrap" class="ft07">late&#160;March.&#160;As&#160;weaker&#160;credits&#160;are downgraded&#160;from&#160;investment-&#160;to&#160;speculative-grade,&#160;Baa3 spreads&#160;tend&#160;to&#160;</p> <p style="position:absolute;top:650px;left:229px;white-space:nowrap" class="ft07">narrow&#160;if&#160;only&#160;because&#160;fallen-angel&#160;downgrades&#160;remove&#160;the&#160;higher yielding,&#160;weaker&#160;credits&#160;from&#160;the&#160;Baa3&#160;</p> <p style="position:absolute;top:668px;left:229px;white-space:nowrap" class="ft07">yield&#160;averages.&#160;Similarly,&#160;when&#160;defaults&#160;remove high-yield&#160;bonds&#160;from&#160;the&#160;index&#160;averages,&#160;market-wide&#160;</p> <p style="position:absolute;top:686px;left:229px;white-space:nowrap" class="ft07">high-yield&#160;bond&#160;spreads&#160;will&#160;narrow&#160;all&#160;else&#160;being&#160;the&#160;same.&#160;</p> <p style="position:absolute;top:1083px;left:849px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:446px;left:825px;white-space:nowrap" class="ft06">0.00%</p> <p style="position:absolute;top:414px;left:825px;white-space:nowrap" class="ft06">0.20%</p> <p style="position:absolute;top:382px;left:825px;white-space:nowrap" class="ft06">0.40%</p> <p style="position:absolute;top:350px;left:825px;white-space:nowrap" class="ft06">0.60%</p> <p style="position:absolute;top:319px;left:825px;white-space:nowrap" class="ft06">0.80%</p> <p style="position:absolute;top:287px;left:825px;white-space:nowrap" class="ft06">1.00%</p> <p style="position:absolute;top:255px;left:825px;white-space:nowrap" class="ft06">1.20%</p> <p style="position:absolute;top:223px;left:825px;white-space:nowrap" class="ft06">1.40%</p> <p style="position:absolute;top:191px;left:825px;white-space:nowrap" class="ft06">1.60%</p> <p style="position:absolute;top:459px;left:260px;white-space:nowrap" class="ft034">02Q2&#160;03Q2&#160;04Q2&#160;05Q2&#160;06Q2&#160;07Q2&#160;08Q2&#160;09Q2&#160;10Q2&#160;11Q2&#160;12Q2&#160;13Q2&#160;14Q2&#160;15Q2&#160;16Q2&#160;17Q2&#160;18Q2&#160;19Q2&#160;20Q2</p> <p style="position:absolute;top:446px;left:232px;white-space:nowrap" class="ft06"><money>$150</money></p> <p style="position:absolute;top:413px;left:231px;white-space:nowrap" class="ft06"><money>$225</money></p> <p style="position:absolute;top:380px;left:230px;white-space:nowrap" class="ft06"><money>$300</money></p> <p style="position:absolute;top:347px;left:232px;white-space:nowrap" class="ft06"><money>$375</money></p> <p style="position:absolute;top:315px;left:230px;white-space:nowrap" class="ft06"><money>$450</money></p> <p style="position:absolute;top:282px;left:231px;white-space:nowrap" class="ft06"><money>$525</money></p> <p style="position:absolute;top:249px;left:230px;white-space:nowrap" class="ft06"><money>$600</money></p> <p style="position:absolute;top:216px;left:232px;white-space:nowrap" class="ft06"><money>$675</money></p> <p style="position:absolute;top:183px;left:231px;white-space:nowrap" class="ft06"><money>$750</money></p> <p style="position:absolute;top:145px;left:380px;white-space:nowrap" class="ft039">Baa3-Rated&#160;Bonds Outstanding:&#160;U.S.&#160;companies,&#160;in&#160;$&#160;billions (L)<br/>Average&#160;Baa3&#160;Expected&#160;Default&#160;Frequency&#160;(EDF)&#160;Metric:&#160;%&#160;(R)</p> <p style="position:absolute;top:90px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;6:&#160;Surge&#160;by&#160;Outstandings&#160;of&#160;Baa3&#160;Corporate&#160;Bonds&#160;Was&#160;Not&#160;Joined&#160;by&#160;a&#160;Commensurate&#160;</b></p> <p style="position:absolute;top:106px;left:290px;white-space:nowrap" class="ft035"><b>Jump&#160;in&#160;Baa3&#160;Default&#160;Risk</b></p> <p style="position:absolute;top:123px;left:290px;white-space:nowrap" class="ft036"><i>sources:&#160;Moody's&#160;Investors&#160;Service,&#160;Moody's&#160;Analytics</i></p> <p style="position:absolute;top:1060px;left:839px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:772px;left:839px;white-space:nowrap" class="ft01">1</p> <p style="position:absolute;top:1073px;left:255px;white-space:nowrap" class="ft09">Jan-04&#160;Dec-04&#160;Nov-05&#160;Oct-06&#160;Sep-07&#160;Aug-08&#160;Jul-09&#160;Jun-10&#160;May-11&#160;Apr-12&#160;Mar-13&#160;Feb-14&#160;Jan-15&#160;Dec-15&#160;Nov-16&#160;Oct-17&#160;Sep-18&#160;Aug-19&#160;Jul-20</p> <p style="position:absolute;top:1060px;left:238px;white-space:nowrap" class="ft01">125</p> <p style="position:absolute;top:1037px;left:239px;white-space:nowrap" class="ft01">175</p> <p style="position:absolute;top:1014px;left:237px;white-space:nowrap" class="ft01">225</p> <p style="position:absolute;top:991px;left:237px;white-space:nowrap" class="ft01">275</p> <p style="position:absolute;top:968px;left:237px;white-space:nowrap" class="ft01">325</p> <p style="position:absolute;top:945px;left:237px;white-space:nowrap" class="ft01">375</p> <p style="position:absolute;top:922px;left:236px;white-space:nowrap" class="ft01">425</p> <p style="position:absolute;top:899px;left:237px;white-space:nowrap" class="ft01">475</p> <p style="position:absolute;top:876px;left:237px;white-space:nowrap" class="ft01">525</p> <p style="position:absolute;top:853px;left:237px;white-space:nowrap" class="ft01">575</p> <p style="position:absolute;top:830px;left:237px;white-space:nowrap" class="ft01">625</p> <p style="position:absolute;top:807px;left:237px;white-space:nowrap" class="ft01">675</p> <p style="position:absolute;top:784px;left:237px;white-space:nowrap" class="ft01">725</p> <p style="position:absolute;top:756px;left:314px;white-space:nowrap" class="ft01">Recessions are&#160;shaded</p> <p style="position:absolute;top:756px;left:462px;white-space:nowrap" class="ft01">Median&#160;Baa3&#160;Bond&#160;Yield&#160;Spread:&#160;10-year&#160;maturity&#160;in&#160;basis points</p> <p style="position:absolute;top:717px;left:238px;white-space:nowrap" class="ft035"><b>Figure&#160;7:&#160;COVID-19's&#160;Median&#160;Baa3&#160;&#160;Bond&#160;Yield&#160;Spread&#160;Falls&#160;Way&#160;Short&#160;of&#160;Its&#160;Great&#160;Recession&#160;Widths&#160;</b></p> <p style="position:absolute;top:733px;left:289px;white-space:nowrap" class="ft036"><i>sources:&#160;NBER,&#160;Moody's&#160;Analytics&#160;</i></p> </div> <!-- Page 7 --> <a name="7"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft040{font-size:18px;font-family:Times;color:#0078bd;} .ft041{font-size:13px;font-family:Times;color:#0000ff;} .ft042{font-size:13px;line-height:18px;font-family:Times;color:#000000;} .ft043{font-size:13px;line-height:26px;font-family:Times;color:#000000;} --> </style> <div id="page7-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727007.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:525px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">7&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:88px;left:235px;white-space:nowrap" class="ft015">The&#160;Week Ahead&#160;–&#160;U.S.,&#160;Europe, Asia-Pacific&#160;</p> <p style="position:absolute;top:132px;left:235px;white-space:nowrap" class="ft033">THE&#160;U.S.&#160;</p> <p style="position:absolute;top:151px;left:235px;white-space:nowrap" class="ft042">By&#160;Mark&#160;Zandi&#160;of&#160;Moody’s&#160;Analytics&#160;<br/>&#160;</p> <p style="position:absolute;top:187px;left:235px;white-space:nowrap" class="ft040">The&#160;Economy&#160;Is&#160;Struggling&#160;&#160;</p> <p style="position:absolute;top:231px;left:235px;white-space:nowrap" class="ft07">The&#160;economy&#160;is&#160;struggling,&#160;the&#160;<org>Bureau&#160;of Labor&#160;Statistics</org><a href="https://www.economy.com/economicview/indicators/r/usa_employ">’&#160;</a></p> <p style="position:absolute;top:231px;left:587px;white-space:nowrap" class="ft041"><a href="https://www.economy.com/economicview/indicators/r/usa_employ">July</a></p> <p style="position:absolute;top:231px;left:609px;white-space:nowrap" class="ft07"><a href="https://www.economy.com/economicview/indicators/r/usa_employ">&#160;</a>jobs&#160;numbers&#160;notwithstanding.&#160;The&#160;</p> <p style="position:absolute;top:249px;left:235px;white-space:nowrap" class="ft07">recovery&#160;is&#160;at&#160;increasing&#160;risk&#160;of&#160;backsliding&#160;into&#160;recession as&#160;lawmakers&#160;remain&#160;at&#160;loggerheads&#160;over&#160;</p> <p style="position:absolute;top:267px;left:235px;white-space:nowrap" class="ft07">another&#160;fiscal&#160;rescue package.&#160;Meanwhile,&#160;President Trump’s&#160;executive orders&#160;to&#160;provide&#160;support to&#160;the&#160;</p> <p style="position:absolute;top:285px;left:235px;white-space:nowrap" class="ft028">economy&#160;fall&#160;well&#160;short&#160;of what&#160;is&#160;needed&#160;to avoid renewed job&#160;loss&#160;and&#160;rising&#160;unemployment.&#160;<br/>The&#160;1.8&#160;million&#160;increase&#160;in&#160;July&#160;employment&#160;was&#160;substantially&#160;greater&#160;than&#160;the&#160;800,000 jobs&#160;we&#160;</p> <p style="position:absolute;top:331px;left:235px;white-space:nowrap" class="ft07">expected,&#160;but there isn’t much solace&#160;in&#160;this.&#160;The&#160;difference was&#160;largely&#160;due to&#160;greater-than-expected&#160;</p> <p style="position:absolute;top:349px;left:235px;white-space:nowrap" class="ft07">job&#160;gains&#160;at&#160;restaurants,&#160;clothing&#160;and&#160;other&#160;retail&#160;stores,&#160;in&#160;healthcare,&#160;and temporary&#160;jobs.&#160;These&#160;</p> <p style="position:absolute;top:367px;left:235px;white-space:nowrap" class="ft07">industries&#160;are&#160;among&#160;the&#160;hardest-hit&#160;by&#160;the&#160;pandemic&#160;and&#160;are&#160;at&#160;significant&#160;risk&#160;of backtracking&#160;as&#160;</p> <p style="position:absolute;top:385px;left:235px;white-space:nowrap" class="ft07">states&#160;grappling&#160;with&#160;the&#160;virus&#160;pull&#160;back&#160;or&#160;pause&#160;reopenings—actions&#160;that&#160;appear&#160;more&#160;likely&#160;than&#160;not&#160;</p> <p style="position:absolute;top:403px;left:235px;white-space:nowrap" class="ft07">in&#160;coming&#160;months&#160;as&#160;th<a href="https://www.economy.com/economicview/topic/13/covid-19">e&#160;</a></p> <p style="position:absolute;top:403px;left:390px;white-space:nowrap" class="ft041"><a href="https://www.economy.com/economicview/topic/13/covid-19">pandemic</a></p> <p style="position:absolute;top:403px;left:450px;white-space:nowrap" class="ft07"><a href="https://www.economy.com/economicview/topic/13/covid-19">&#160;</a>remains&#160;uncontained.&#160;</p> <p style="position:absolute;top:431px;left:235px;white-space:nowrap" class="ft07">Moreover,&#160;many&#160;of&#160;the&#160;small&#160;businesses&#160;(those with fewer&#160;than&#160;500&#160;employees)&#160;that&#160;make&#160;up&#160;the&#160;</p> <p style="position:absolute;top:449px;left:235px;white-space:nowrap" class="ft07">industries&#160;that&#160;gained jobs&#160;have&#160;been using&#160;funds&#160;from&#160;the&#160;Paycheck&#160;Protection Program&#160;to&#160;keep&#160;</p> <p style="position:absolute;top:467px;left:235px;white-space:nowrap" class="ft07">workers&#160;on&#160;their&#160;payrolls.&#160;The 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style="position:absolute;top:639px;left:235px;white-space:nowrap" class="ft07">end,&#160;employment&#160;is&#160;still&#160;expected&#160;to&#160;be down&#160;by&#160;at&#160;least 10&#160;million&#160;jobs&#160;from&#160;its&#160;pre-pandemic&#160;peak.&#160;</p> <p style="position:absolute;top:657px;left:235px;white-space:nowrap" class="ft028">This&#160;is&#160;about&#160;the&#160;same&#160;outlook&#160;we’ve&#160;had&#160;since&#160;our&#160;April&#160;baseline&#160;forecast.&#160;<br/>Unemployment&#160;fell&#160;again&#160;in&#160;July,&#160;to&#160;10.2%,&#160;but&#160;the&#160;figure&#160;is&#160;closer&#160;to&#160;11%&#160;after&#160;accounting&#160;for&#160;survey-</p> <p style="position:absolute;top:702px;left:235px;white-space:nowrap" class="ft07">related problems&#160;acknowledged by&#160;the&#160;<org>Bureau&#160;of Labor&#160;Statistics</org>.&#160;This&#160;is&#160;much&#160;better&#160;than&#160;in&#160;April&#160;</p> <p style="position:absolute;top:720px;left:235px;white-space:nowrap" class="ft07">when&#160;unemployment&#160;peaked&#160;at&#160;close&#160;to&#160;a&#160;properly&#160;measured&#160;20%,&#160;but it&#160;isn’t much&#160;to&#160;get&#160;excited&#160;</p> <p style="position:absolute;top:738px;left:235px;white-space:nowrap" class="ft07">about&#160;either.&#160;Labor&#160;force&#160;participation,&#160;which&#160;collapsed during&#160;the&#160;business&#160;shutdowns&#160;this&#160;spring,&#160;is&#160;</p> <p style="position:absolute;top:756px;left:235px;white-space:nowrap" class="ft07">still&#160;barely&#160;off&#160;bottom&#160;and&#160;fell&#160;again&#160;in&#160;July.&#160;There&#160;are&#160;almost&#160;5&#160;million&#160;fewer&#160;people&#160;in the&#160;labor&#160;force,&#160;</p> <p style="position:absolute;top:774px;left:235px;white-space:nowrap" class="ft07">across&#160;all&#160;demographics,&#160;than&#160;before&#160;the&#160;pandemic.&#160;If&#160;they&#160;were&#160;back in&#160;the&#160;job&#160;market looking&#160;for&#160;</p> <p style="position:absolute;top:792px;left:235px;white-space:nowrap" class="ft07">work,&#160;the unemployment rate would&#160;be&#160;closer&#160;to&#160;14%.&#160;Under&#160;our&#160;baseline we&#160;expect the&#160;</p> <p style="position:absolute;top:810px;left:235px;white-space:nowrap" class="ft07">unemployment&#160;rate to&#160;end&#160;the&#160;year&#160;at&#160;9.5%—again,&#160;not&#160;much&#160;different&#160;from&#160;previous&#160;outlooks&#160;since&#160;</p> <p style="position:absolute;top:828px;left:235px;white-space:nowrap" class="ft043">the&#160;pandemic&#160;hit.&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;<br/>&#160;</p> </div> <!-- Page 8 --> <a name="8"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page8-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727008.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:525px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">8&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:87px;left:235px;white-space:nowrap" class="ft07">The&#160;economy&#160;is&#160;not&#160;enjoying&#160;a&#160;V-shape&#160;recovery&#160;but&#160;is&#160;instead on&#160;the&#160;verge&#160;of suffering&#160;a W-shape&#160;</p> <p style="position:absolute;top:105px;left:235px;white-space:nowrap" class="ft07">path.&#160;This&#160;is&#160;what&#160;businesses&#160;are&#160;thinking,&#160;according&#160;to our&#160;weekl<a href="https://www.economy.com/economicview/indicators/r/usa_dsbc">y&#160;</a></p> <p style="position:absolute;top:105px;left:640px;white-space:nowrap" class="ft041"><a href="https://www.economy.com/economicview/indicators/r/usa_dsbc">survey</a></p> <p style="position:absolute;top:105px;left:679px;white-space:nowrap" class="ft07"><a href="https://www.economy.com/economicview/indicators/r/usa_dsbc">&#160;</a>of&#160;business&#160;confidence.&#160;</p> <p style="position:absolute;top:123px;left:235px;white-space:nowrap" class="ft07">Survey&#160;responses&#160;last&#160;week&#160;were as&#160;weak as&#160;they&#160;have&#160;been&#160;since&#160;late May.&#160;Sales&#160;and&#160;pricing&#160;power&#160;are&#160;</p> <p style="position:absolute;top:141px;left:235px;white-space:nowrap" class="ft07">notably&#160;soft,&#160;layoffs&#160;remain&#160;elevated,&#160;and&#160;investment&#160;spending&#160;remains&#160;moribund with&#160;only&#160;about&#160;one-</p> <p style="position:absolute;top:159px;left:235px;white-space:nowrap" class="ft07">tenth of&#160;respondents&#160;increasing&#160;investment.&#160;Assessments&#160;of present&#160;conditions&#160;have&#160;even turned&#160;more&#160;</p> <p style="position:absolute;top:177px;left:235px;white-space:nowrap" class="ft07">dour&#160;in&#160;recent&#160;weeks,&#160;with fewer&#160;than&#160;one-fifth&#160;of respondents&#160;saying&#160;they&#160;feel&#160;present&#160;conditions&#160;are&#160;</p> <p style="position:absolute;top:195px;left:235px;white-space:nowrap" class="ft07">improving.&#160;Historically,&#160;this&#160;level&#160;is&#160;a&#160;key&#160;threshold&#160;between&#160;an expanding&#160;economy&#160;and recession.&#160;</p> <p style="position:absolute;top:525px;left:761px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:549px;left:235px;white-space:nowrap" class="ft07">President Trump’s&#160;weekend&#160;executive&#160;orders&#160;to&#160;shore up&#160;the&#160;economy&#160;will&#160;not be sufficient&#160;to&#160;keep&#160;the&#160;</p> <p style="position:absolute;top:567px;left:235px;white-space:nowrap" class="ft07">recovery&#160;going.&#160;The orders&#160;include extra&#160;unemployment&#160;insurance of&#160;<money>$400</money>&#160;per&#160;week,&#160;a&#160;temporary&#160;cut&#160;</p> <p style="position:absolute;top:585px;left:235px;white-space:nowrap" class="ft07">in&#160;payroll&#160;taxes&#160;for&#160;those&#160;making&#160;less&#160;than&#160;about&#160;<money>$100,000</money>&#160;annually,&#160;an evictions&#160;moratorium&#160;for&#160;hard-</p> <p style="position:absolute;top:603px;left:235px;white-space:nowrap" class="ft07">pressed&#160;renters,&#160;and continued&#160;relief to&#160;student&#160;loan&#160;borrowers&#160;with&#160;government&#160;loans.&#160;But&#160;a&#160;closer&#160;</p> <p style="position:absolute;top:621px;left:235px;white-space:nowrap" class="ft07">look&#160;at&#160;these orders&#160;suggests&#160;they&#160;will&#160;have&#160;at&#160;best&#160;marginal&#160;economic&#160;benefits&#160;even if&#160;fully&#160;</p> <p style="position:absolute;top:639px;left:235px;white-space:nowrap" class="ft028">implemented,&#160;which is&#160;questionable&#160;given&#160;the&#160;legality&#160;of&#160;the orders&#160;and&#160;the&#160;likely&#160;court&#160;challenges.&#160;<br/>The&#160;president’s&#160;executive&#160;order&#160;for&#160;unemployment&#160;insurance&#160;does&#160;not&#160;provide&#160;more&#160;funds&#160;for&#160;the&#160;</p> <p style="position:absolute;top:685px;left:235px;white-space:nowrap" class="ft07">existing&#160;unemployment&#160;insurance&#160;program.&#160;Rather,&#160;it establishes&#160;a&#160;new&#160;program.&#160;Three-quarters&#160;of&#160;the&#160;</p> <p style="position:absolute;top:703px;left:235px;white-space:nowrap" class="ft07">funds&#160;are to&#160;come from&#160;the&#160;federal&#160;government,&#160;with 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class="ft07">the&#160;economy&#160;from&#160;reducing&#160;the&#160;unemployment&#160;insurance from&#160;the&#160;extra&#160;<money>$600</money>&#160;per&#160;week&#160;that was&#160;in&#160;</p> <p style="position:absolute;top:793px;left:235px;white-space:nowrap" class="ft07">place until&#160;last&#160;week.&#160;</p> <p style="position:absolute;top:1070px;left:804px;white-space:nowrap" class="ft07">&#160;</p> </div> <!-- Page 9 --> <a name="9"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page9-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727009.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:525px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">9&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:87px;left:235px;white-space:nowrap" class="ft07">The executive order&#160;to&#160;cut payroll&#160;taxes&#160;is&#160;also&#160;weak tea.&#160;It&#160;only&#160;defers&#160;the taxes&#160;until&#160;next&#160;year.&#160;The&#160;</p> <p style="position:absolute;top:105px;left:235px;white-space:nowrap" class="ft07">president&#160;has&#160;said he&#160;would&#160;work&#160;to pass&#160;legislation&#160;making&#160;the&#160;tax&#160;cut&#160;permanent,&#160;but that&#160;only&#160;</p> <p style="position:absolute;top:123px;left:235px;white-space:nowrap" class="ft07">happens&#160;if&#160;he&#160;is&#160;re-elected.&#160;Even&#160;then,&#160;the politics&#160;of&#160;getting&#160;it done would&#160;be&#160;vexed&#160;given&#160;the optics&#160;of&#160;</p> <p style="position:absolute;top:141px;left:235px;white-space:nowrap" class="ft07">cutting&#160;funds&#160;for&#160;the&#160;Social&#160;Security&#160;and Medicare&#160;trust&#160;funds,&#160;which&#160;are&#160;already&#160;fast-approaching&#160;</p> <p style="position:absolute;top:159px;left:235px;white-space:nowrap" class="ft07">insolvency.&#160;Employers&#160;also&#160;would have&#160;to change&#160;employees’ withholding&#160;schedules&#160;and&#160;may&#160;decide&#160;</p> <p style="position:absolute;top:177px;left:235px;white-space:nowrap" class="ft07">not to,&#160;given&#160;the prospect that&#160;their&#160;workers&#160;would&#160;have&#160;much&#160;reduced&#160;after-tax&#160;pay&#160;next&#160;year.&#160;Even&#160;a&#160;</p> <p style="position:absolute;top:195px;left:235px;white-space:nowrap" class="ft07">well-designed&#160;and implemented payroll&#160;tax&#160;cut&#160;has&#160;a small&#160;economic&#160;bang&#160;for&#160;the&#160;buck,&#160;because the&#160;</p> <p style="position:absolute;top:213px;left:235px;white-space:nowrap" class="ft07">benefit&#160;goes&#160;to&#160;those&#160;still&#160;with&#160;jobs,&#160;and many&#160;of them&#160;remain sheltering&#160;in place&#160;and&#160;not&#160;spending&#160;as&#160;</p> <p style="position:absolute;top:231px;left:235px;white-space:nowrap" class="ft028">much&#160;on&#160;various&#160;services.&#160;It&#160;would&#160;not go&#160;to&#160;the unemployed&#160;who&#160;spend&#160;every&#160;penny&#160;they&#160;receive.&#160;<br/>The eviction&#160;moratorium&#160;the president has&#160;ordered&#160;simply&#160;calls&#160;on&#160;government&#160;agencies&#160;to&#160;consider&#160;</p> <p style="position:absolute;top:277px;left:235px;white-space:nowrap" class="ft07">whether&#160;this&#160;is&#160;necessary&#160;and&#160;to identify&#160;funds&#160;to provide&#160;temporary&#160;help&#160;to renters.&#160;The&#160;order&#160;doesn’t&#160;</p> <p style="position:absolute;top:295px;left:235px;white-space:nowrap" class="ft07">even&#160;extend&#160;the&#160;recently&#160;expired&#160;federal&#160;eviction&#160;moratorium&#160;on&#160;renters&#160;in&#160;multifamily&#160;properties&#160;with&#160;</p> <p style="position:absolute;top:313px;left:235px;white-space:nowrap" class="ft07">mortgages&#160;backed by&#160;Fannie&#160;Mae,&#160;Freddie&#160;Mac&#160;and&#160;the&#160;FHA.&#160;This&#160;previous&#160;moratorium&#160;potentially&#160;</p> <p style="position:absolute;top:331px;left:235px;white-space:nowrap" class="ft07">helped&#160;nearly&#160;one-third of renters.&#160;The&#160;executive&#160;order&#160;also does&#160;nothing&#160;to address&#160;the&#160;growing&#160;</p> <p style="position:absolute;top:349px;left:235px;white-space:nowrap" class="ft07">amount&#160;of&#160;back&#160;rent that is&#160;owed,&#160;currently&#160;estimated&#160;to&#160;be&#160;closing&#160;in&#160;on&#160;<money>$25&#160;billion</money>,&#160;and that&#160;will&#160;</p> <p style="position:absolute;top:367px;left:235px;white-space:nowrap" class="ft07">approach&#160;<money>$70&#160;billion</money>&#160;by&#160;year’s&#160;end under&#160;our&#160;baseline&#160;outlook&#160;for&#160;the&#160;economy.&#160;An&#160;estimated 12.8&#160;</p> <p style="position:absolute;top:385px;left:235px;white-space:nowrap" class="ft028">million&#160;renter&#160;households&#160;will&#160;owe&#160;back rent by&#160;then,&#160;and&#160;they&#160;will&#160;owe&#160;an&#160;average&#160;of&#160;<money>$5,400</money>.&#160;<br/>Trump’s&#160;order&#160;to&#160;waive&#160;interest&#160;payments&#160;and&#160;defer&#160;all&#160;payments&#160;on&#160;government&#160;student&#160;loans&#160;</p> <p style="position:absolute;top:431px;left:235px;white-space:nowrap" class="ft07">through&#160;the&#160;end of the&#160;year&#160;is&#160;also&#160;of&#160;questionable&#160;legality.&#160;That&#160;aside,&#160;it&#160;is&#160;of little&#160;macroeconomic&#160;</p> <p style="position:absolute;top:449px;left:235px;white-space:nowrap" class="ft07">consequence.&#160;Just to&#160;be&#160;clear,&#160;the debt&#160;is&#160;not&#160;forgiven.&#160;As&#160;of&#160;June,&#160;there were <money>$933&#160;billion</money> in current&#160;</p> <p style="position:absolute;top:467px;left:235px;white-space:nowrap" class="ft07">non-deferred&#160;student loans&#160;outstanding.&#160;The&#160;interest savings&#160;on&#160;this&#160;debt&#160;through the&#160;end&#160;of&#160;the year&#160;</p> <p style="position:absolute;top:485px;left:235px;white-space:nowrap" class="ft028">would come&#160;to&#160;an&#160;estimated&#160;<money>$17&#160;billion</money>.&#160;<br/>To&#160;gauge&#160;the economic&#160;benefit&#160;of&#160;the president’s&#160;executive orders,&#160;consider&#160;their&#160;cost&#160;to&#160;the&#160;federal&#160;</p> <p style="position:absolute;top:530px;left:235px;white-space:nowrap" class="ft07">government even&#160;under&#160;the 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class="ft07">doesn’t&#160;come&#160;close&#160;to the&#160;<money>$3.4&#160;trillion</money> in&#160;fiscal&#160;support&#160;that&#160;the&#160;Democratic&#160;House&#160;passed in&#160;the&#160;</p> <p style="position:absolute;top:620px;left:235px;white-space:nowrap" class="ft07">HEROES Act weeks&#160;ago,&#160;the&#160;more than&#160;<money>$1&#160;trillion</money>&#160;that Senate&#160;Republicans&#160;recently&#160;proposed,&#160;and&#160;the&#160;</p> <p style="position:absolute;top:638px;left:235px;white-space:nowrap" class="ft07"><money>$1.5&#160;trillion</money> we&#160;are&#160;assuming&#160;in our&#160;baseline&#160;outlook&#160;that—based on simulations&#160;of&#160;our&#160;macroeconomic&#160;</p> <p style="position:absolute;top:656px;left:236px;white-space:nowrap" class="ft028">model—is&#160;the&#160;minimum&#160;support&#160;necessary&#160;to safely&#160;avoid&#160;falling&#160;back&#160;into&#160;recession.&#160;<br/>The gap&#160;between&#160;what&#160;the president has&#160;ordered—if&#160;fully&#160;implemented—and&#160;what&#160;is&#160;needed,&#160;and&#160;that&#160;</p> <p style="position:absolute;top:702px;left:235px;white-space:nowrap" class="ft07">even&#160;the&#160;Trump&#160;administration&#160;acknowledges&#160;can’t&#160;be&#160;met&#160;without&#160;an&#160;act&#160;of Congress,&#160;includes&#160;</p> <p style="position:absolute;top:720px;left:235px;white-space:nowrap" class="ft07">substantial&#160;federal&#160;aid&#160;to&#160;state&#160;and&#160;local&#160;governments&#160;to fill&#160;in&#160;their&#160;budget&#160;holes.&#160;Under&#160;our&#160;baseline&#160;</p> <p style="position:absolute;top:738px;left:235px;white-space:nowrap" class="ft07">outlook,&#160;this&#160;comes&#160;to nearly&#160;<money>$500&#160;billion</money>&#160;over&#160;their&#160;next&#160;two&#160;fiscal&#160;years.&#160;Also&#160;critical:&#160;several&#160;hundred&#160;</p> <p style="position:absolute;top:756px;left:235px;white-space:nowrap" class="ft07">billion&#160;in&#160;additional&#160;support&#160;for&#160;businesses&#160;either&#160;through&#160;additional&#160;funding&#160;for&#160;the&#160;PPP&#160;and/or&#160;an&#160;</p> <p style="position:absolute;top:774px;left:235px;white-space:nowrap" class="ft07">expansion&#160;of the&#160;employee&#160;retention tax&#160;credit,&#160;along&#160;with&#160;additional&#160;monies&#160;for&#160;food&#160;and&#160;housing&#160;</p> <p style="position:absolute;top:792px;left:235px;white-space:nowrap" class="ft028">assistance,&#160;testing&#160;and&#160;tracing&#160;of&#160;the virus,&#160;and&#160;the&#160;healthcare system.&#160;<br/>Expectations&#160;are&#160;still&#160;high that lawmakers&#160;will&#160;get it together&#160;and get&#160;this&#160;done&#160;before&#160;Congress&#160;goes&#160;</p> <p style="position:absolute;top:838px;left:235px;white-space:nowrap" class="ft07">away&#160;on&#160;its&#160;August recess.&#160;But,&#160;it may&#160;take a&#160;catalyst such&#160;as&#160;a&#160;slide&#160;in&#160;the stock market&#160;to&#160;generate&#160;the&#160;</p> <p style="position:absolute;top:856px;left:235px;white-space:nowrap" class="ft07">political&#160;will&#160;necessary&#160;to&#160;pass&#160;legislation.&#160;</p> <p style="position:absolute;top:893px;left:235px;white-space:nowrap" class="ft033">Next&#160;week&#160;</p> <p style="position:absolute;top:912px;left:235px;white-space:nowrap" class="ft042">The economic&#160;calendar&#160;is&#160;lighter&#160;next week.&#160;The key&#160;data&#160;include&#160;housing&#160;starts,&#160;Quarterly&#160;Services&#160;<br/>Survey,&#160;existing-home&#160;sales&#160;and a&#160;pair&#160;of&#160;regional&#160;manufacturing&#160;surveys.&#160;&#160;</p> </div> <!-- Page 10 --> <a name="10"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page10-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727010.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:525px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">10&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:92px;left:846px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:106px;left:235px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:125px;left:235px;white-space:nowrap" class="ft033">EUROPE&#160;</p> <p style="position:absolute;top:144px;left:235px;white-space:nowrap" class="ft07">By&#160;Barbara&#160;Teixeira Araujo&#160;of&#160;Moody’s&#160;Analytics&#160;</p> <p style="position:absolute;top:163px;left:235px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:181px;left:235px;white-space:nowrap" class="ft040">COVID-19&#160;Crisis Clouds Inflation&#160;Forecast&#160;</p> <p style="position:absolute;top:205px;left:235px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:223px;left:235px;white-space:nowrap" class="ft07">July&#160;CPI&#160;figures&#160;for&#160;both&#160;the U.K.&#160;and&#160;the euro&#160;zone&#160;will&#160;highlight&#160;data&#160;releases&#160;in&#160;the&#160;week&#160;ahead.&#160;We&#160;</p> <p style="position:absolute;top:241px;left:235px;white-space:nowrap" class="ft07">are&#160;having&#160;a&#160;hard time&#160;forecasting&#160;those&#160;numbers,&#160;since&#160;evidence&#160;from&#160;other&#160;individual&#160;countries&#160;</p> <p style="position:absolute;top:259px;left:235px;white-space:nowrap" class="ft07">suggests&#160;the&#160;story&#160;for&#160;headline&#160;inflation has&#160;been tainted by&#160;base&#160;effects&#160;and by&#160;disruptions&#160;to&#160;the&#160;</p> <p style="position:absolute;top:277px;left:235px;white-space:nowrap" class="ft07">usual&#160;pricing&#160;mechanisms,&#160;owing&#160;to&#160;the&#160;COVID&#160;crisis.&#160;For&#160;the&#160;currency&#160;area,&#160;preliminary&#160;numbers&#160;</p> <p style="position:absolute;top:295px;left:235px;white-space:nowrap" class="ft07">suggest&#160;the&#160;headline&#160;actually&#160;increased in&#160;July&#160;to&#160;0.4%&#160;y/y&#160;from&#160;0.3%,&#160;mainly&#160;because&#160;of&#160;a jump&#160;in&#160;</p> <p style="position:absolute;top:313px;left:235px;white-space:nowrap" class="ft07">core&#160;goods&#160;inflation.&#160;Core&#160;goods&#160;inflation&#160;is&#160;expected to&#160;have&#160;soared from&#160;0.2%&#160;y/y&#160;to 1.7%&#160;in&#160;July,&#160;but&#160;</p> <p style="position:absolute;top:331px;left:235px;white-space:nowrap" class="ft07">we&#160;caution&#160;this&#160;development&#160;isn’t&#160;likely&#160;to&#160;be&#160;sustained;&#160;inflation&#160;in&#160;the&#160;sector&#160;has&#160;not&#160;exceeded 1%&#160;</p> <p style="position:absolute;top:349px;left:235px;white-space:nowrap" class="ft07">since 2013 and&#160;has&#160;averaged&#160;a&#160;meagre 0.3%&#160;since&#160;2018.&#160;Our&#160;view&#160;is&#160;that&#160;most of&#160;the&#160;jump&#160;was&#160;related&#160;</p> <p style="position:absolute;top:367px;left:235px;white-space:nowrap" class="ft07">to&#160;the timing&#160;(and&#160;the scale)&#160;of&#160;summer&#160;sales&#160;this&#160;year&#160;compared&#160;with&#160;last year.&#160;But&#160;changes&#160;in&#160;</p> <p style="position:absolute;top:385px;left:235px;white-space:nowrap" class="ft07">demand dynamics—due&#160;to&#160;pent-up&#160;demand for&#160;some&#160;goods&#160;following&#160;the&#160;lockdown—could also have&#160;</p> <p style="position:absolute;top:403px;left:235px;white-space:nowrap" class="ft07">played&#160;a role.&#160;By&#160;contrast,&#160;the&#160;preliminary&#160;numbers&#160;confirmed for&#160;us&#160;that&#160;the&#160;trend&#160;in services&#160;inflation&#160;</p> <p style="position:absolute;top:421px;left:235px;white-space:nowrap" class="ft07">is&#160;now&#160;to the&#160;downside,&#160;since&#160;overall&#160;demand in&#160;the&#160;economy&#160;has&#160;declined because&#160;of&#160;the&#160;crisis.&#160;We&#160;do&#160;</p> <p style="position:absolute;top:439px;left:235px;white-space:nowrap" class="ft07">expect&#160;there&#160;was&#160;some&#160;volatility&#160;in&#160;the&#160;services&#160;subsectors&#160;as&#160;well—especially&#160;regarding&#160;transportation&#160;</p> <p style="position:absolute;top:457px;left:235px;white-space:nowrap" class="ft028">and&#160;hospitality&#160;inflation—but&#160;our&#160;view&#160;is&#160;that most subsectors&#160;recorded&#160;declines&#160;over&#160;the&#160;month.&#160;<br/>Elsewhere,&#160;we expect that&#160;energy&#160;inflation&#160;in&#160;the&#160;euro&#160;zone&#160;continued&#160;to&#160;increase&#160;over&#160;the&#160;month on&#160;</p> <p style="position:absolute;top:503px;left:235px;white-space:nowrap" class="ft07">the&#160;back&#160;of base&#160;effects&#160;in oil&#160;prices,&#160;while&#160;food inflation should&#160;have&#160;further&#160;corrected&#160;from&#160;April’s&#160;</p> <p style="position:absolute;top:521px;left:235px;white-space:nowrap" class="ft07">lockdown-related&#160;jump.&#160;But we&#160;caution&#160;that&#160;the developments&#160;have&#160;been&#160;extremely&#160;mixed&#160;across&#160;</p> <p style="position:absolute;top:539px;left:235px;white-space:nowrap" class="ft07">countries,&#160;which suggests&#160;that&#160;this&#160;story&#160;is&#160;fragile&#160;and&#160;likely&#160;hasn’t&#160;been&#160;observed&#160;everywhere.&#160;While&#160;</p> <p style="position:absolute;top:557px;left:235px;white-space:nowrap" class="ft07">Italy’s&#160;and Germany’s&#160;EU-harmonized&#160;inflation&#160;rates&#160;fell&#160;off&#160;the&#160;cliff&#160;in&#160;July,&#160;France’s&#160;and&#160;Spain’s&#160;have&#160;</p> <p style="position:absolute;top:575px;left:235px;white-space:nowrap" class="ft07">soared.&#160;The&#160;situation&#160;in&#160;Germany&#160;is&#160;expected&#160;due&#160;to&#160;recent VAT&#160;cuts,&#160;but even&#160;so&#160;the&#160;numbers&#160;have&#160;</p> <p style="position:absolute;top:593px;left:235px;white-space:nowrap" class="ft07">been&#160;more dire than&#160;we expected,&#160;with&#160;inflation&#160;falling&#160;across&#160;all&#160;sectors&#160;of&#160;the&#160;economy.&#160;All&#160;in,&#160;then,&#160;</p> <p style="position:absolute;top:611px;left:235px;white-space:nowrap" class="ft07">we&#160;don’t&#160;think&#160;it&#160;is&#160;worth&#160;digging&#160;too much&#160;into July’s&#160;CPI numbers.&#160;They&#160;are&#160;not&#160;reliable&#160;indicators&#160;of&#160;</p> <p style="position:absolute;top:629px;left:235px;white-space:nowrap" class="ft07">the&#160;trend in&#160;inflation pressures.&#160;Looking&#160;past&#160;the&#160;volatility,&#160;underlying&#160;inflation pressures&#160;will&#160;continue&#160;</p> <p style="position:absolute;top:647px;left:235px;white-space:nowrap" class="ft07">to&#160;ease&#160;this&#160;year&#160;on&#160;the&#160;back&#160;of&#160;the&#160;broad-based decline&#160;in&#160;demand,&#160;offsetting&#160;an expected rise&#160;in&#160;</p> <p style="position:absolute;top:665px;left:235px;white-space:nowrap" class="ft07">energy&#160;inflation.&#160;This&#160;comes&#160;in line&#160;with&#160;our&#160;forecast&#160;that&#160;GDP&#160;in the&#160;currency&#160;area won’t&#160;reach&#160;</p> <p style="position:absolute;top:683px;left:235px;white-space:nowrap" class="ft028">precrisis&#160;levels&#160;before 2022.&#160;<br/>In&#160;the U.K.,&#160;the story&#160;is&#160;relatively&#160;similar.&#160;While we&#160;expect that headline inflation&#160;held&#160;steady&#160;at&#160;0.6%&#160;</p> <p style="position:absolute;top:729px;left:235px;white-space:nowrap" class="ft07">y/y&#160;in July,&#160;risks&#160;to our&#160;forecast&#160;are&#160;elevated&#160;(both&#160;to&#160;the&#160;upside&#160;and&#160;down).&#160;We&#160;expect&#160;that,&#160;as&#160;</p> <p style="position:absolute;top:747px;left:235px;white-space:nowrap" class="ft07">happened in the&#160;euro zone,&#160;core&#160;goods&#160;inflation gained some&#160;momentum&#160;in July&#160;because&#160;of&#160;volatility&#160;</p> <p style="position:absolute;top:765px;left:235px;white-space:nowrap" class="ft07">owing&#160;to&#160;the&#160;timing&#160;of&#160;last year’s&#160;summer&#160;sales.&#160;The&#160;risk&#160;here is&#160;that&#160;we are&#160;overestimating&#160;this&#160;effect,&#160;</p> <p style="position:absolute;top:783px;left:235px;white-space:nowrap" class="ft07">especially&#160;since the&#160;June figures&#160;had&#160;already&#160;been&#160;boosted&#160;by&#160;some summer-sales&#160;base&#160;effect—with&#160;</p> <p style="position:absolute;top:801px;left:235px;white-space:nowrap" class="ft07">clothing&#160;inflation soaring—and by&#160;volatility&#160;in games&#160;prices,&#160;due&#160;to the&#160;best-seller&#160;charts,&#160;which could&#160;</p> <p style="position:absolute;top:819px;left:235px;white-space:nowrap" class="ft07">bring&#160;a&#160;mean-reversion&#160;to recreational&#160;goods&#160;inflation&#160;in&#160;July.&#160;Services&#160;inflation&#160;should have&#160;eased&#160;</p> <p style="position:absolute;top:837px;left:235px;white-space:nowrap" class="ft07">across&#160;most&#160;subsectors,&#160;but&#160;a wild&#160;card&#160;is&#160;inflation&#160;in the&#160;hospitality&#160;sector.&#160;Hotels&#160;in&#160;the U.K.&#160;were&#160;</p> <p style="position:absolute;top:855px;left:235px;white-space:nowrap" class="ft07">allowed to&#160;reopen at&#160;the&#160;start&#160;of July,&#160;and evidence&#160;from&#160;other&#160;countries&#160;shows&#160;that&#160;prices&#160;of overnight&#160;</p> <p style="position:absolute;top:873px;left:235px;white-space:nowrap" class="ft07">stays&#160;soared&#160;as&#160;people&#160;decided&#160;to not&#160;travel&#160;abroad.&#160;Note&#160;that&#160;the&#160;U.K.&#160;is&#160;a&#160;net&#160;importer&#160;of&#160;tourism&#160;</p> <p style="position:absolute;top:891px;left:235px;white-space:nowrap" class="ft07">services—meaning&#160;that&#160;U.K.&#160;residents&#160;normally&#160;spend more&#160;time&#160;abroad&#160;than travellers&#160;spend in the&#160;</p> <p style="position:absolute;top:909px;left:235px;white-space:nowrap" class="ft07">U.K.—which suggests&#160;that&#160;a&#160;surge in&#160;domestic&#160;tourism&#160;in&#160;the U.K.&#160;could&#160;have given&#160;a&#160;boost to&#160;prices&#160;in&#160;</p> <p style="position:absolute;top:927px;left:235px;white-space:nowrap" class="ft028">the&#160;hospitality&#160;sector.&#160;<br/>Regarding&#160;noncore&#160;inflation in the&#160;U.K.,&#160;our&#160;view&#160;is&#160;that the&#160;deflation&#160;in&#160;the&#160;motor&#160;fuels&#160;sector&#160;</p> <p style="position:absolute;top:973px;left:235px;white-space:nowrap" class="ft07">continued to&#160;ease&#160;as&#160;oil&#160;prices&#160;increased&#160;further,&#160;while&#160;food,&#160;alcohol&#160;and&#160;tobacco inflation&#160;should&#160;have&#160;</p> <p style="position:absolute;top:991px;left:235px;white-space:nowrap" class="ft07">declined&#160;further.&#160;Looking&#160;past&#160;the&#160;volatility,&#160;we&#160;expect&#160;that&#160;headline&#160;inflation&#160;in the&#160;coming&#160;months&#160;</p> <p style="position:absolute;top:1009px;left:235px;white-space:nowrap" class="ft07">will&#160;fall&#160;closer&#160;to&#160;zero&#160;and then begin to&#160;gradually&#160;increase&#160;from&#160;the&#160;fourth&#160;quarter.&#160;It&#160;will&#160;be&#160;some&#160;</p> <p style="position:absolute;top:1027px;left:235px;white-space:nowrap" class="ft028">years&#160;before&#160;inflation&#160;reaches&#160;the&#160;Bank&#160;of&#160;England’s&#160;2%&#160;target.&#160;<br/>Elsewhere&#160;in&#160;the calendar&#160;next&#160;week,&#160;we will&#160;get the&#160;U.K.’s&#160;retail&#160;sales&#160;for&#160;July.&#160;We expect them&#160;to&#160;show&#160;</p> <p style="position:absolute;top:1072px;left:235px;white-space:nowrap" class="ft07">that&#160;retail&#160;sales&#160;soared&#160;further&#160;over&#160;the month&#160;as&#160;the economy&#160;continued&#160;to&#160;reopen,&#160;but we&#160;don’t&#160;</p> </div> <!-- Page 11 --> <a name="11"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page11-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727011.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p 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during&#160;the&#160;month&#160;and&#160;travel&#160;was&#160;still&#160;restricted—</p> <p style="position:absolute;top:123px;left:235px;white-space:nowrap" class="ft07">and&#160;from&#160;pent-up&#160;demand&#160;that built during&#160;the lockdown.&#160;Both of&#160;these&#160;factors&#160;are expected&#160;to&#160;have&#160;</p> <p style="position:absolute;top:141px;left:235px;white-space:nowrap" class="ft07">faded&#160;in July.&#160;Our&#160;forecast&#160;is&#160;that&#160;sales&#160;increased&#160;4.3%&#160;m/m,&#160;which&#160;is&#160;nonetheless&#160;a&#160;pretty&#160;good&#160;result&#160;</p> <p style="position:absolute;top:159px;left:235px;white-space:nowrap" class="ft07">given it&#160;builds&#160;on double-digit&#160;increases&#160;in&#160;May&#160;and&#160;June.&#160;It&#160;should bring&#160;sales&#160;back&#160;above&#160;their&#160;precrisis&#160;</p> <p style="position:absolute;top:177px;left:235px;white-space:nowrap" class="ft07">levels.&#160;But we caution&#160;that prospects&#160;for&#160;the rest&#160;of&#160;the year&#160;are much more&#160;dire.&#160;The winding&#160;down&#160;of&#160;</p> <p style="position:absolute;top:195px;left:235px;white-space:nowrap" class="ft07">the&#160;Coronavirus&#160;Job&#160;Retention&#160;Scheme is&#160;expected&#160;to&#160;result in&#160;job&#160;losses&#160;and&#160;to&#160;dent households’&#160;</p> <p style="position:absolute;top:213px;left:235px;white-space:nowrap" class="ft028">purchasing&#160;power&#160;as&#160;caution&#160;rises&#160;along&#160;with&#160;precautionary&#160;savings.&#160;<br/>&#160;</p> <p style="position:absolute;top:364px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:270px;left:330px;white-space:nowrap" class="ft034">Key&#160;indicators&#160;</p> <p style="position:absolute;top:270px;left:648px;white-space:nowrap" class="ft034">Units</p> <p style="position:absolute;top:270px;left:710px;white-space:nowrap" class="ft034">Moody's&#160;Analytics</p> <p style="position:absolute;top:270px;left:821px;white-space:nowrap" class="ft034">Last</p> <p style="position:absolute;top:287px;left:238px;white-space:nowrap" class="ft09">Mon&#160;@&#160;<chron>1:00&#160;p.m.</chron></p> <p style="position:absolute;top:287px;left:330px;white-space:nowrap" class="ft09">Russia:&#160;Industrial&#160;Production&#160;for&#160;July</p> <p style="position:absolute;top:287px;left:627px;white-space:nowrap" class="ft09">%&#160;change&#160;yr&#160;ago</p> <p style="position:absolute;top:287px;left:740px;white-space:nowrap" class="ft09">-6.0</p> <p style="position:absolute;top:287px;left:821px;white-space:nowrap" class="ft09">-9.4</p> <p style="position:absolute;top:303px;left:238px;white-space:nowrap" class="ft09">Wed&#160;@&#160;<chron>9:30&#160;a.m.</chron></p> <p style="position:absolute;top:303px;left:330px;white-space:nowrap" class="ft09">U.K.:&#160;Consumer&#160;Price&#160;Index&#160;for&#160;July</p> <p style="position:absolute;top:303px;left:627px;white-space:nowrap" class="ft09">%&#160;change&#160;yr&#160;ago</p> <p style="position:absolute;top:303px;left:742px;white-space:nowrap" class="ft09">0.6</p> <p style="position:absolute;top:303px;left:822px;white-space:nowrap" class="ft09">0.6</p> <p style="position:absolute;top:318px;left:238px;white-space:nowrap" class="ft09">Wed&#160;@&#160;<chron>10:00 a.m.</chron></p> <p style="position:absolute;top:318px;left:330px;white-space:nowrap" class="ft09">Euro&#160;Zone:&#160;Consumer&#160;Price&#160;Index&#160;for&#160;July</p> <p style="position:absolute;top:318px;left:627px;white-space:nowrap" class="ft09">%&#160;change&#160;yr&#160;ago</p> <p style="position:absolute;top:318px;left:742px;white-space:nowrap" class="ft09">0.4</p> <p style="position:absolute;top:318px;left:823px;white-space:nowrap" class="ft09">0.3</p> <p style="position:absolute;top:334px;left:238px;white-space:nowrap" class="ft09">Thur&#160;@&#160;<chron>2:00&#160;p.m.</chron></p> <p style="position:absolute;top:334px;left:330px;white-space:nowrap" class="ft09">Russia:&#160;Retail Sales&#160;for&#160;July</p> <p style="position:absolute;top:334px;left:627px;white-space:nowrap" class="ft09">%&#160;change&#160;yr&#160;ago</p> <p style="position:absolute;top:334px;left:740px;white-space:nowrap" class="ft09">-5.0</p> <p style="position:absolute;top:334px;left:822px;white-space:nowrap" class="ft09">-7.7</p> <p style="position:absolute;top:350px;left:238px;white-space:nowrap" class="ft09">Thur&#160;@&#160;<chron>2:00&#160;p.m.</chron></p> <p style="position:absolute;top:350px;left:330px;white-space:nowrap" class="ft09">Russia:&#160;Unemployment&#160;for&#160;July</p> <p style="position:absolute;top:350px;left:653px;white-space:nowrap" class="ft09">%&#160;</p> <p style="position:absolute;top:350px;left:742px;white-space:nowrap" class="ft09">6.4</p> <p style="position:absolute;top:350px;left:823px;white-space:nowrap" class="ft09">6.2</p> <p style="position:absolute;top:366px;left:238px;white-space:nowrap" class="ft09">Fri @&#160;<chron>9:30&#160;a.m.</chron></p> <p style="position:absolute;top:366px;left:330px;white-space:nowrap" class="ft09">U.K.:&#160;Retail Sales&#160;for&#160;July</p> <p style="position:absolute;top:366px;left:627px;white-space:nowrap" class="ft09">%&#160;change&#160;yr&#160;ago</p> <p style="position:absolute;top:366px;left:742px;white-space:nowrap" class="ft09">4.3</p> <p style="position:absolute;top:366px;left:821px;white-space:nowrap" class="ft09">13.9</p> </div> <!-- Page 12 --> <a name="12"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page12-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727012.png" alt="background image"/> <p style="position:absolute;top:27px;left:262px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:289px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:451px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:27px;left:563px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:235px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:57px;left:64px;white-space:nowrap" class="ft011">The&#160;Week&#160;Ahead&#160;</p> <p style="position:absolute;top:75px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:105px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:120px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:151px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:181px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:197px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:212px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:242px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:273px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:288px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:303px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:334px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:349px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:380px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:395px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:410px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:441px;left:64px;white-space:nowrap" class="ft026">&#160;<br/>&#160;</p> <p style="position:absolute;top:471px;left:98px;white-space:nowrap" class="ft01">&#160;&#160;&#160;&#160;</p> <p style="position:absolute;top:486px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:502px;left:64px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:525px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">12&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:90px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:115px;left:235px;white-space:nowrap" class="ft033">ASIA-PACIFIC&#160;&#160;</p> <p style="position:absolute;top:133px;left:235px;white-space:nowrap" class="ft07">By&#160;Shahana&#160;Mukherjee&#160;of&#160;Moody’s&#160;Analytics&#160;</p> <p style="position:absolute;top:160px;left:235px;white-space:nowrap" class="ft040">Gauging&#160;Q2 Contractions&#160;</p> <p style="position:absolute;top:194px;left:235px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:212px;left:235px;white-space:nowrap" class="ft07">Japan’s&#160;real&#160;GDP&#160;is&#160;likely&#160;to&#160;have&#160;contracted&#160;by&#160;2.4%&#160;on&#160;a&#160;quarterly&#160;basis&#160;in&#160;the&#160;June&#160;quarter,&#160;following&#160;</p> <p style="position:absolute;top:230px;left:235px;white-space:nowrap" class="ft07">a 0.9%&#160;decline&#160;in the&#160;March&#160;quarter.&#160;Japan’s&#160;economy&#160;continued to&#160;be&#160;shaped&#160;by&#160;a unique&#160;</p> <p style="position:absolute;top:248px;left:235px;white-space:nowrap" class="ft07">combination of&#160;internal&#160;and external&#160;forces.&#160;The&#160;decline&#160;in&#160;the&#160;March&#160;quarter&#160;resulted&#160;from&#160;a&#160;</p> <p style="position:absolute;top:266px;left:235px;white-space:nowrap" class="ft07">combination of&#160;soft&#160;domestic&#160;demand—the&#160;economy&#160;was&#160;yet to&#160;recover&#160;from the sales&#160;tax hike—as&#160;</p> <p style="position:absolute;top:284px;left:235px;white-space:nowrap" class="ft07">well&#160;as&#160;significant&#160;weakness&#160;in exports&#160;due&#160;to&#160;aftereffects&#160;of&#160;the protracted&#160;U.S.-China&#160;trade&#160;war.&#160;</p> <p style="position:absolute;top:302px;left:235px;white-space:nowrap" class="ft07">Equally&#160;important,&#160;the&#160;decline in&#160;exports&#160;reflected&#160;the&#160;disruptions&#160;caused&#160;by&#160;factory&#160;shutdowns&#160;in&#160;</p> <p style="position:absolute;top:320px;left:235px;white-space:nowrap" class="ft028">China&#160;during&#160;the&#160;early&#160;stages&#160;of&#160;the&#160;coronavirus&#160;outbreak.&#160;<br/>The COVID-19&#160;pandemic&#160;has&#160;severely&#160;impacted&#160;the&#160;Japanese economy.&#160;On&#160;one&#160;hand,&#160;the&#160;localized&#160;</p> <p style="position:absolute;top:366px;left:235px;white-space:nowrap" class="ft07">outbreak prompted&#160;the government to&#160;impose a&#160;nationwide&#160;emergency&#160;in April&#160;and domestic&#160;</p> <p style="position:absolute;top:384px;left:235px;white-space:nowrap" class="ft07">consumption has&#160;remained&#160;weak&#160;in&#160;recent&#160;months.&#160;On&#160;the other&#160;hand,&#160;the trade-reliant&#160;manufacturing&#160;</p> <p style="position:absolute;top:402px;left:235px;white-space:nowrap" class="ft07">sector&#160;suffered a significant&#160;setback&#160;in revenues&#160;from&#160;the&#160;shock&#160;to global&#160;demand as&#160;several&#160;economies&#160;</p> <p style="position:absolute;top:420px;left:235px;white-space:nowrap" class="ft07">went&#160;under&#160;near&#160;complete&#160;lockdowns&#160;through&#160;this&#160;period.&#160;With&#160;exports&#160;having&#160;contracted at&#160;an&#160;</p> <p style="position:absolute;top:438px;left:235px;white-space:nowrap" class="ft07">average&#160;annual&#160;rate&#160;of 25.3%&#160;through&#160;the&#160;June&#160;quarter,&#160;the&#160;strain from&#160;a significantly&#160;weakened&#160;</p> <p style="position:absolute;top:456px;left:235px;white-space:nowrap" class="ft07">external&#160;position&#160;is&#160;expected&#160;to&#160;drive the&#160;weakness&#160;in&#160;Japan’s&#160;aggregate&#160;demand&#160;through&#160;the June&#160;</p> <p style="position:absolute;top:474px;left:235px;white-space:nowrap" class="ft028">quarter.&#160;<br/>Thailand’s&#160;real&#160;GDP&#160;is&#160;likely&#160;to&#160;have&#160;contracted 7.4%&#160;in&#160;yearly&#160;terms&#160;over&#160;the June quarter,&#160;following&#160;a&#160;</p> <p style="position:absolute;top:520px;left:235px;white-space:nowrap" class="ft07">1.8%&#160;decline&#160;in the&#160;March&#160;quarter.&#160;Thailand’s&#160;growth&#160;slowed in&#160;March&#160;as&#160;a&#160;result&#160;of&#160;a&#160;sudden&#160;and sharp&#160;</p> <p style="position:absolute;top:538px;left:235px;white-space:nowrap" class="ft07">decline&#160;in&#160;tourism,&#160;a 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class="ft028">from&#160;the&#160;pause&#160;on&#160;international&#160;travel&#160;is&#160;expected to&#160;be&#160;the&#160;main&#160;driver&#160;of the&#160;slowdown.&#160;<br/>Singapore’s&#160;non-oil&#160;exports&#160;are&#160;likely&#160;to&#160;have&#160;risen&#160;8.5%&#160;in&#160;yearly&#160;terms&#160;in July,&#160;following&#160;a&#160;16.5%&#160;</p> <p style="position:absolute;top:656px;left:235px;white-space:nowrap" class="ft07">increase&#160;in&#160;June.&#160;The&#160;growing&#160;demand&#160;for&#160;pharmaceuticals,&#160;non-monetary&#160;gold&#160;(as&#160;a&#160;safe&#160;haven&#160;asset)&#160;</p> <p style="position:absolute;top:674px;left:235px;white-space:nowrap" class="ft07">and&#160;electronic&#160;goods&#160;have&#160;driven&#160;Singapore’s&#160;overseas&#160;sales&#160;in recent&#160;months,&#160;and&#160;this&#160;trend is&#160;</p> <p style="position:absolute;top:692px;left:235px;white-space:nowrap" class="ft028">expected&#160;to&#160;have&#160;extended&#160;into&#160;July.&#160;<br/>&#160;</p> <p style="position:absolute;top:858px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:882px;left:235px;white-space:nowrap" class="ft07">&#160;</p> </div> <!-- Page 13 --> <a name="13"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft044{font-size:11px;font-family:Times;color:#0078bd;} .ft045{font-size:10px;font-family:Times;color:#0078bd;} .ft046{font-size:18px;line-height:25px;font-family:Times;color:#0078bd;} --> </style> <div id="page13-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727013.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">13&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">The&#160;Long&#160;View&#160;</p> <p style="position:absolute;top:78px;left:97px;white-space:nowrap" class="ft011">d</p> <p style="position:absolute;top:78px;left:129px;white-space:nowrap" class="ft011">&#160;</p> <p style="position:absolute;top:90px;left:196px;white-space:nowrap" class="ft015">The&#160;Long&#160;View&#160;</p> <p style="position:absolute;top:114px;left:196px;white-space:nowrap" class="ft040">&#160;</p> <p style="position:absolute;top:139px;left:196px;white-space:nowrap" class="ft046">A&#160;record&#160;August&#160;for&#160;high-yield&#160;bond&#160;issuance has been&#160;driven&#160;by&#160;the&#160;<br/>refinancing&#160;of&#160;outstanding&#160;loans and&#160;bonds.&#160;</p> <p style="position:absolute;top:190px;left:196px;white-space:nowrap" class="ft040">&#160;</p> <p style="position:absolute;top:215px;left:196px;white-space:nowrap" class="ft07">By&#160;John&#160;Lonski,&#160;Chief&#160;Economist,&#160;Moody’s&#160;Capital Markets Research&#160;Group&#160;</p> <p style="position:absolute;top:233px;left:196px;white-space:nowrap" class="ft07"><chron>August 13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:250px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:277px;left:196px;white-space:nowrap" class="ft044">CREDIT&#160;SPREADS</p> <p style="position:absolute;top:275px;left:289px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:293px;left:196px;white-space:nowrap" class="ft042">As&#160;measured by&#160;Moody's&#160;long-term&#160;average corporate bond&#160;yield,&#160;the recent investment grade corporate&#160;<br/>bond yield spread of&#160;131&#160;basis&#160;points&#160;far&#160;exceeded its&#160;122-point&#160;mean&#160;of&#160;the&#160;two previous&#160;economic&#160;</p> <p style="position:absolute;top:330px;left:196px;white-space:nowrap" class="ft07">recoveries.&#160;This&#160;spread&#160;may&#160;be&#160;no&#160;wider&#160;than 135&#160;bp&#160;by&#160;year-end&#160;2020.&#160;</p> <p style="position:absolute;top:367px;left:196px;white-space:nowrap" class="ft07">The recent&#160;high-yield&#160;bond&#160;spread&#160;of&#160;536&#160;bp&#160;is&#160;thinner&#160;than&#160;what is&#160;suggested&#160;by&#160;the&#160;accompanying&#160;long-</p> <p style="position:absolute;top:385px;left:196px;white-space:nowrap" class="ft07">term&#160;Baa&#160;industrial&#160;company&#160;bond&#160;yield spread&#160;of&#160;209&#160;bp&#160;and&#160;the&#160;recent&#160;VIX&#160;of&#160;22.2&#160;points.&#160;The&#160;latter&#160;has&#160;</p> <p style="position:absolute;top:403px;left:196px;white-space:nowrap" class="ft07">been statistically&#160;associated with&#160;a&#160;650-bp&#160;midpoint&#160;for&#160;the&#160;high-yield&#160;bond spread.&#160;</p> <p style="position:absolute;top:434px;left:196px;white-space:nowrap" class="ft045">DEFAULTS</p> <p style="position:absolute;top:431px;left:249px;white-space:nowrap" class="ft033">&#160;</p> <p style="position:absolute;top:449px;left:196px;white-space:nowrap" class="ft07">July&#160;2020’s&#160;U.S.&#160;high-yield&#160;default&#160;rate&#160;of&#160;8.4%&#160;was up&#160;from&#160;July&#160;2019’s&#160;3.1%&#160;and may&#160;approximate&#160;12.0%,&#160;</p> <p style="position:absolute;top:467px;left:196px;white-space:nowrap" class="ft07">on&#160;average,&#160;by&#160;2021’s&#160;first&#160;quarter.&#160;</p> <p style="position:absolute;top:498px;left:196px;white-space:nowrap" class="ft045">US&#160;CORPORATE BOND&#160;ISSUANCE&#160;&#160;</p> <p style="position:absolute;top:513px;left:196px;white-space:nowrap" class="ft07">First-quarter&#160;2019’s&#160;worldwide&#160;offerings&#160;of corporate&#160;bonds&#160;revealed&#160;annual&#160;setbacks&#160;of&#160;0.5%&#160;for&#160;IG&#160;and 3.6%&#160;</p> <p style="position:absolute;top:531px;left:196px;white-space:nowrap" class="ft028">for&#160;high-yield,&#160;wherein&#160;US$-denominated&#160;offerings&#160;fell&#160;by&#160;3.0%&#160;for&#160;IG&#160;and&#160;grew&#160;by&#160;7.1%&#160;for&#160;high&#160;yield.&#160;<br/>Second-quarter&#160;2019’s&#160;worldwide&#160;offerings&#160;of&#160;corporate&#160;bonds&#160;revealed&#160;an&#160;annual&#160;setback&#160;of&#160;2.5%&#160;for&#160;IG&#160;and&#160;</p> <p style="position:absolute;top:576px;left:196px;white-space:nowrap" class="ft07">an annual&#160;advance&#160;of 17.6%&#160;for&#160;high-yield,&#160;wherein&#160;US$-denominated&#160;offerings&#160;sank&#160;by&#160;12.4%&#160;for&#160;IG&#160;and&#160;</p> <p style="position:absolute;top:595px;left:196px;white-space:nowrap" class="ft028">surged by&#160;30.3%&#160;for&#160;high&#160;yield.&#160;<br/>Third-quarter&#160;2019’s&#160;worldwide&#160;offerings&#160;of&#160;corporate&#160;bonds&#160;revealed annual&#160;advances&#160;of 15.2%&#160;for&#160;IG&#160;and&#160;</p> <p style="position:absolute;top:640px;left:196px;white-space:nowrap" class="ft07">56.8%&#160;for&#160;high-yield,&#160;wherein&#160;US$-denominated&#160;offerings&#160;soared&#160;higher&#160;by&#160;36.8%&#160;for&#160;IG&#160;and&#160;81.3%&#160;for&#160;high&#160;</p> <p style="position:absolute;top:658px;left:196px;white-space:nowrap" class="ft028">yield.&#160;<br/>Fourth-quarter&#160;2019’s&#160;worldwide&#160;offerings&#160;of&#160;corporate&#160;bonds&#160;revealed annual&#160;advances&#160;of&#160;15.3%&#160;for&#160;IG&#160;and&#160;</p> <p style="position:absolute;top:704px;left:196px;white-space:nowrap" class="ft07">329%&#160;for&#160;high-yield,&#160;wherein&#160;US$-denominated&#160;offerings&#160;dipped&#160;by&#160;0.8%&#160;for&#160;IG&#160;and&#160;surged higher&#160;by&#160;330%&#160;</p> <p style="position:absolute;top:722px;left:196px;white-space:nowrap" class="ft028">for&#160;high&#160;yield.&#160;<br/>First-quarter&#160;2020’s&#160;worldwide&#160;offerings&#160;of&#160;corporate&#160;bonds&#160;revealed annual&#160;advances&#160;of 17.7%&#160;for&#160;IG&#160;and&#160;</p> <p style="position:absolute;top:768px;left:196px;white-space:nowrap" class="ft07">26.5%&#160;for&#160;high-yield,&#160;wherein&#160;US$-denominated&#160;offerings&#160;increased&#160;by&#160;43.7%&#160;for&#160;IG&#160;and&#160;grew&#160;by&#160;21.4%&#160;for&#160;</p> <p style="position:absolute;top:786px;left:196px;white-space:nowrap" class="ft028">high&#160;yield.&#160;<br/>For&#160;2019,&#160;worldwide&#160;corporate&#160;bond&#160;offerings&#160;grew&#160;by&#160;5.4%&#160;annually&#160;(to&#160;<money>$2.447&#160;trillion</money>)&#160;for&#160;IG&#160;and advanced&#160;</p> <p style="position:absolute;top:832px;left:196px;white-space:nowrap" class="ft07">by&#160;49.2%&#160;for&#160;high&#160;yield&#160;(to <money>$561&#160;billion</money>).&#160;The projected&#160;annual&#160;percent&#160;increases&#160;for&#160;2020’s&#160;worldwide&#160;</p> <p style="position:absolute;top:850px;left:196px;white-space:nowrap" class="ft07">corporate&#160;bond offerings&#160;are&#160;a&#160;7.2%&#160;advance&#160;for&#160;IG&#160;and a&#160;5.2%&#160;uptick&#160;for&#160;high&#160;yield.&#160;</p> <p style="position:absolute;top:877px;left:196px;white-space:nowrap" class="ft045">US&#160;ECONOMIC OUTLOOK</p> <p style="position:absolute;top:877px;left:334px;white-space:nowrap" class="ft044">&#160;</p> <p style="position:absolute;top:893px;left:196px;white-space:nowrap" class="ft042">An unfolding&#160;global&#160;recession&#160;will&#160;rein&#160;in&#160;Treasury&#160;bond yields.&#160;As&#160;long&#160;as&#160;the&#160;global&#160;economy&#160;operates&#160;below&#160;<br/>trend,&#160;1.00%&#160;will&#160;serve&#160;as&#160;the&#160;upper&#160;bound&#160;for&#160;the&#160;10-year&#160;Treasury&#160;yield.&#160;Until&#160;COVID-19&#160;risks&#160;fade,&#160;<br/>substantially&#160;wider&#160;credit&#160;spreads&#160;are&#160;possible.&#160;</p> </div> <!-- Page 14 --> <a name="14"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft047{font-size:13px;font-family:Times;color:#4f81bc;} --> </style> <div id="page14-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727014.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">14&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">The&#160;Long&#160;View&#160;</p> <p style="position:absolute;top:78px;left:97px;white-space:nowrap" class="ft011">d</p> <p style="position:absolute;top:78px;left:129px;white-space:nowrap" class="ft011">&#160;</p> <p style="position:absolute;top:92px;left:846px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:124px;left:196px;white-space:nowrap" class="ft047">EUROPE&#160;</p> <p style="position:absolute;top:142px;left:196px;white-space:nowrap" class="ft07">By&#160;Ross&#160;Cioffi&#160;and&#160;Barbara Teixeira&#160;Araujo&#160;of&#160;Moody’s&#160;Analytics&#160;</p> <p style="position:absolute;top:159px;left:196px;white-space:nowrap" class="ft07"><chron>August 13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:195px;left:196px;white-space:nowrap" class="ft045">UNITED&#160;KINGDOM&#160;</p> <p style="position:absolute;top:210px;left:196px;white-space:nowrap" class="ft07">The&#160;preliminary&#160;estimate&#160;of&#160;second-quarter&#160;GDP&#160;confirmed the&#160;U.K.&#160;economy&#160;entered its first&#160;recession since&#160;the&#160;</p> <p style="position:absolute;top:227px;left:196px;white-space:nowrap" class="ft07">financial&#160;crisis.&#160;This didn’t&#160;come&#160;as a&#160;shock&#160;given&#160;how&#160;the&#160;COVID-19&#160;crisis&#160;brought&#160;several&#160;sectors&#160;of&#160;the&#160;British&#160;</p> <p style="position:absolute;top:244px;left:196px;white-space:nowrap" class="ft07">economy&#160;to&#160;a&#160;standstill&#160;on&#160;the&#160;back&#160;of&#160;the&#160;restriction&#160;measures.&#160;Unsurprisingly,&#160;GDP&#160;plunged&#160;over the&#160;quarter at&#160;</p> <p style="position:absolute;top:261px;left:196px;white-space:nowrap" class="ft07">the&#160;sharpest&#160;rate&#160;on&#160;record—the&#160;economy&#160;contracted&#160;by&#160;a&#160;fifth&#160;compared with&#160;the&#160;previous stanza—bringing&#160;the&#160;</p> <p style="position:absolute;top:279px;left:196px;white-space:nowrap" class="ft07">peak-to-trough&#160;decline&#160;in activity&#160;to&#160;22%. No&#160;sector&#160;of&#160;the&#160;economy&#160;was&#160;left&#160;unscathed, with&#160;historic&#160;contractions&#160;</p> <p style="position:absolute;top:296px;left:196px;white-space:nowrap" class="ft043">recorded across&#160;the&#160;board.&#160;<br/>The&#160;good&#160;news&#160;is that&#160;the&#160;worst&#160;of&#160;the&#160;crisis&#160;is&#160;past,&#160;as the&#160;COVID-19&#160;restrictions&#160;have been&#160;gradually&#160;lifted&#160;since&#160;</p> <p style="position:absolute;top:340px;left:196px;white-space:nowrap" class="ft07">mid-May.&#160;As of&#160;mid-July, the&#160;supply&#160;side&#160;of&#160;the&#160;economy&#160;was&#160;almost&#160;fully&#160;open again,&#160;even&#160;if&#160;social distancing&#160;</p> <p style="position:absolute;top:357px;left:196px;white-space:nowrap" class="ft07">measures&#160;still&#160;apply.&#160;Reassuringly,&#160;the&#160;high-frequency&#160;measures all&#160;point&#160;to a&#160;sharp&#160;post-lockdown rebound&#160;in&#160;</p> <p style="position:absolute;top:374px;left:196px;white-space:nowrap" class="ft07">activity—especially&#160;in&#160;retail&#160;sales&#160;on&#160;the back&#160;of&#160;pent-up&#160;demand—which&#160;chimes&#160;in&#160;with our&#160;view&#160;that&#160;the&#160;third&#160;</p> <p style="position:absolute;top:391px;left:196px;white-space:nowrap" class="ft07">quarter&#160;will&#160;bring&#160;a&#160;significant&#160;rebound&#160;in growth. We&#160;are&#160;penciling&#160;in&#160;a&#160;16%&#160;q/q&#160;increase&#160;in&#160;GDP&#160;in&#160;the&#160;three&#160;</p> <p style="position:absolute;top:409px;left:196px;white-space:nowrap" class="ft043">months&#160;to September,&#160;though&#160;activity&#160;shouldn’t&#160;return&#160;to&#160;precrisis&#160;levels&#160;before&#160;the&#160;end&#160;of 2022.&#160;<br/>In&#160;the quarterly&#160;results,&#160;the&#160;expenditure&#160;breakdown&#160;confirmed&#160;that household&#160;spending&#160;was&#160;hit hard&#160;by&#160;the&#160;social&#160;</p> <p style="position:absolute;top:453px;left:196px;white-space:nowrap" class="ft07">distancing&#160;measures&#160;and&#160;the&#160;closure&#160;of&#160;consumer-facing&#160;businesses. But&#160;investment&#160;also&#160;declined&#160;sharply,&#160;with&#160;</p> <p style="position:absolute;top:470px;left:196px;white-space:nowrap" class="ft07">business&#160;investment&#160;down by&#160;an eye-watering&#160;31.4%&#160;q/q&#160;as&#160;coronavirus-related&#160;fears&#160;put&#160;a&#160;lid&#160;on&#160;big-ticket&#160;</p> <p style="position:absolute;top:487px;left:196px;white-space:nowrap" class="ft07">decisions&#160;while&#160;the&#160;lockdown hit&#160;to firms’&#160;cash&#160;flows&#160;only&#160;added to&#160;the&#160;misery.&#160;For&#160;comparison,&#160;business&#160;</p> <p style="position:absolute;top:504px;left:196px;white-space:nowrap" class="ft07">investment&#160;fell&#160;at&#160;most&#160;by&#160;9.8%&#160;during&#160;the&#160;2008&#160;global&#160;economic downturn. Government&#160;spending&#160;fell&#160;sharply;&#160;we&#160;</p> <p style="position:absolute;top:521px;left:196px;white-space:nowrap" class="ft07">had&#160;expected&#160;an&#160;increase due to&#160;rising&#160;healthcare&#160;spending.&#160;But&#160;healthcare expenditure&#160;actually&#160;declined&#160;over&#160;the&#160;</p> <p style="position:absolute;top:538px;left:196px;white-space:nowrap" class="ft07">quarter,&#160;as&#160;an increase&#160;in COVID-19-related spending&#160;was offset&#160;by&#160;slumps&#160;in&#160;elective&#160;operations and accident&#160;and&#160;</p> <p style="position:absolute;top:555px;left:196px;white-space:nowrap" class="ft043">emergency&#160;services.&#160;<br/>Net&#160;trade contributed&#160;to&#160;the&#160;headline&#160;but only&#160;because imports&#160;fell&#160;at&#160;a&#160;sharper&#160;rate than&#160;exports.&#160;This&#160;didn’t come&#160;</p> <p style="position:absolute;top:599px;left:196px;white-space:nowrap" class="ft07">as&#160;a&#160;surprise&#160;given&#160;that the other&#160;euro&#160;zone&#160;economies&#160;started&#160;to&#160;reopen before&#160;the&#160;U.K.,&#160;which&#160;boosted&#160;external&#160;</p> <p style="position:absolute;top:617px;left:196px;white-space:nowrap" class="ft07">demand&#160;for British&#160;goods.&#160;</p> <p style="position:absolute;top:653px;left:196px;white-space:nowrap" class="ft045">FRANCE&#160;</p> <p style="position:absolute;top:668px;left:196px;white-space:nowrap" class="ft07">In the&#160;spotlight&#160;on Thursday&#160;was that&#160;France’s&#160;unemployment&#160;rate&#160;plunged from&#160;7.8%&#160;to only&#160;7.1%&#160;in&#160;the&#160;second&#160;</p> <p style="position:absolute;top:685px;left:196px;white-space:nowrap" class="ft07">quarter,&#160;its&#160;lowest&#160;in&#160;almost&#160;four decades. We&#160;caution against&#160;overreading&#160;into&#160;this&#160;decline,&#160;however.&#160;It&#160;happened&#160;</p> <p style="position:absolute;top:702px;left:196px;white-space:nowrap" class="ft07">only&#160;because of&#160;a&#160;plunge&#160;in&#160;the&#160;labour&#160;force&#160;and&#160;not&#160;because&#160;more&#160;people&#160;found&#160;work.&#160;Many&#160;people&#160;were&#160;</p> <p style="position:absolute;top:719px;left:196px;white-space:nowrap" class="ft07">discouraged to&#160;look&#160;for&#160;a&#160;job&#160;during&#160;the&#160;COVID-19&#160;crisis&#160;at&#160;the&#160;same&#160;time&#160;that&#160;vacancies collapsed,&#160;and under the&#160;</p> <p style="position:absolute;top:736px;left:196px;white-space:nowrap" class="ft07">ILO&#160;definition&#160;these&#160;people&#160;are&#160;classified as inactive&#160;and not&#160;as&#160;unemployed.&#160;Indeed,&#160;the&#160;numbers showed that&#160;</p> <p style="position:absolute;top:754px;left:196px;white-space:nowrap" class="ft07">inactivity&#160;soared&#160;over&#160;the quarter&#160;while employment&#160;fell.&#160;We&#160;expect&#160;this&#160;trend&#160;will&#160;be&#160;reversed&#160;soon—as&#160;people&#160;will&#160;</p> <p style="position:absolute;top:771px;left:196px;white-space:nowrap" class="ft07">start&#160;looking&#160;for&#160;work&#160;again,&#160;in&#160;line&#160;with&#160;the&#160;reopening&#160;of&#160;the&#160;economy—which&#160;should lead&#160;to a&#160;jump&#160;in&#160;</p> <p style="position:absolute;top:788px;left:196px;white-space:nowrap" class="ft043">unemployment&#160;and&#160;a&#160;decline&#160;in inactivity.&#160;&#160;<br/>Adding&#160;to the&#160;woes,&#160;we&#160;are&#160;worried that&#160;the&#160;government’s Chomage&#160;Partiel&#160;short-term&#160;work&#160;scheme&#160;will&#160;start to&#160;</p> <p style="position:absolute;top:832px;left:196px;white-space:nowrap" class="ft07">wind&#160;down soon. This should lead to a&#160;surge&#160;in&#160;job&#160;losses,&#160;as&#160;many&#160;companies are&#160;unlikely&#160;to&#160;be&#160;able&#160;to&#160;hold on to&#160;</p> <p style="position:absolute;top:849px;left:196px;white-space:nowrap" class="ft07">their&#160;employees, especially&#160;in the&#160;hospitality&#160;sector.&#160;This&#160;is&#160;a&#160;theme&#160;not&#160;only&#160;for&#160;France&#160;but&#160;for&#160;many&#160;other&#160;</p> <p style="position:absolute;top:866px;left:196px;white-space:nowrap" class="ft07">European countries,&#160;with&#160;the U.K.&#160;being&#160;in&#160;the spotlight as&#160;the&#160;British&#160;government’s&#160;Coronavirus&#160;Job Retention&#160;</p> <p style="position:absolute;top:883px;left:196px;white-space:nowrap" class="ft07">Scheme&#160;has&#160;started to&#160;wind&#160;down already&#160;from&#160;August.&#160;We&#160;thus think&#160;that&#160;the&#160;performance&#160;of&#160;Europe’s&#160;labour&#160;</p> <p style="position:absolute;top:900px;left:196px;white-space:nowrap" class="ft07">market&#160;will&#160;head&#160;south&#160;in&#160;the coming&#160;months,&#160;with&#160;unemployment&#160;expected to&#160;increase&#160;and&#160;set&#160;to&#160;peak&#160;around&#160;</p> <p style="position:absolute;top:918px;left:196px;white-space:nowrap" class="ft07">the&#160;turn&#160;of the&#160;year.&#160;&#160;</p> </div> <!-- Page 15 --> <a name="15"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page15-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727015.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">15&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">The&#160;Long&#160;View&#160;</p> <p style="position:absolute;top:78px;left:97px;white-space:nowrap" class="ft011">d</p> <p style="position:absolute;top:78px;left:129px;white-space:nowrap" class="ft011">&#160;</p> <p style="position:absolute;top:92px;left:846px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:106px;left:196px;white-space:nowrap" class="ft047">ASIA PACIFIC&#160;</p> <p style="position:absolute;top:124px;left:196px;white-space:nowrap" class="ft07">By&#160;Shahana Mukherjee&#160;of&#160;Moody’s&#160;Analytics&#160;</p> <p style="position:absolute;top:142px;left:196px;white-space:nowrap" class="ft07"><chron>August&#160;13, 2020</chron>&#160;</p> <p style="position:absolute;top:179px;left:196px;white-space:nowrap" class="ft045">AUSTRALIA&#160;</p> <p style="position:absolute;top:194px;left:196px;white-space:nowrap" class="ft07">Australia’s&#160;economic&#160;recovery&#160;has&#160;gained&#160;momentum&#160;since&#160;the&#160;nationwide&#160;COVID-19&#160;restrictions&#160;were&#160;eased&#160;</p> <p style="position:absolute;top:212px;left:196px;white-space:nowrap" class="ft07">in&#160;May.&#160;Australia’s&#160;seasonally&#160;adjusted&#160;unemployment&#160;rate&#160;inched up&#160;marginally&#160;to&#160;7.5%&#160;in&#160;July,&#160;from&#160;7.4%&#160;in&#160;</p> <p style="position:absolute;top:230px;left:196px;white-space:nowrap" class="ft07">June.&#160;This&#160;marks&#160;the fifth&#160;consecutive&#160;month of&#160;weakening&#160;in&#160;the domestic&#160;labour&#160;market;&#160;however,&#160;the&#160;pace&#160;</p> <p style="position:absolute;top:248px;left:196px;white-space:nowrap" class="ft028">of&#160;decline&#160;has&#160;slowed considerably.&#160;<br/>A primary&#160;reason for&#160;this&#160;is&#160;because&#160;several&#160;aspects&#160;showed&#160;marked&#160;improvements&#160;in&#160;July.&#160;First,&#160;employment&#160;</p> <p style="position:absolute;top:294px;left:196px;white-space:nowrap" class="ft07">grew&#160;a&#160;notable&#160;0.9%&#160;(by&#160;114,700&#160;workers)&#160;between June&#160;and July&#160;and&#160;eased&#160;the&#160;pace&#160;of annual&#160;decline&#160;to&#160;</p> <p style="position:absolute;top:312px;left:196px;white-space:nowrap" class="ft07">3.2% in&#160;July&#160;after&#160;slumping&#160;to&#160;a&#160;30-year-plus&#160;low&#160;of&#160;-5.7%&#160;in May.&#160;In comparison,&#160;the&#160;number&#160;of unemployed&#160;</p> <p style="position:absolute;top:330px;left:196px;white-space:nowrap" class="ft07">persons&#160;rose&#160;by&#160;a&#160;weaker&#160;margin&#160;of 15,700&#160;persons&#160;over&#160;this&#160;period.&#160;Second,&#160;not&#160;only&#160;did&#160;the&#160;participation&#160;</p> <p style="position:absolute;top:348px;left:196px;white-space:nowrap" class="ft07">rate rise&#160;0.6&#160;percentage point to&#160;64.7%&#160;(after&#160;falling&#160;to&#160;62.7%&#160;in&#160;May),&#160;but the&#160;underutilization&#160;rate&#160;declined,&#160;</p> <p style="position:absolute;top:366px;left:196px;white-space:nowrap" class="ft07">and&#160;the underemployment rate&#160;fell&#160;0.5 percentage point&#160;to&#160;11.2%.&#160;Most&#160;of&#160;the&#160;new&#160;employment&#160;</p> <p style="position:absolute;top:384px;left:196px;white-space:nowrap" class="ft07">opportunities&#160;came&#160;in&#160;the&#160;form&#160;of part-time&#160;employment&#160;(which&#160;accounted for&#160;62%&#160;of&#160;all&#160;new&#160;jobs&#160;created&#160;</p> <p style="position:absolute;top:402px;left:196px;white-space:nowrap" class="ft07">in&#160;July).&#160;In&#160;yearly&#160;terms,&#160;full-time&#160;positions&#160;lost&#160;as&#160;of&#160;July&#160;remained over&#160;double&#160;the&#160;number&#160;of&#160;part-time&#160;jobs&#160;</p> <p style="position:absolute;top:420px;left:196px;white-space:nowrap" class="ft07">lost&#160;(282,800&#160;versus&#160;131,700). But,&#160;July&#160;saw&#160;a&#160;visible&#160;catch-up&#160;underway,&#160;with&#160;states&#160;including&#160;Victoria,&#160;South&#160;</p> <p style="position:absolute;top:438px;left:196px;white-space:nowrap" class="ft028">and&#160;Western Australia recording&#160;declines&#160;in&#160;their&#160;unemployment rates&#160;relative to&#160;June.&#160;<br/>The latest reading&#160;clearly&#160;indicates&#160;that the&#160;economy&#160;has&#160;entered&#160;recovery&#160;since&#160;restrictions&#160;were&#160;eased in&#160;</p> <p style="position:absolute;top:483px;left:196px;white-space:nowrap" class="ft07">May.&#160;This&#160;is&#160;also consistent&#160;with&#160;other&#160;performance&#160;metrics,&#160;which&#160;reflect&#160;a sustained rise&#160;in&#160;domestic&#160;</p> <p style="position:absolute;top:501px;left:196px;white-space:nowrap" class="ft07">spending&#160;and&#160;an ongoing&#160;pickup&#160;in exports.&#160;Yet,&#160;the&#160;risks&#160;facing&#160;the&#160;economy&#160;are&#160;far&#160;from&#160;over.&#160;Chief&#160;among&#160;</p> <p style="position:absolute;top:519px;left:196px;white-space:nowrap" class="ft07">these is&#160;the&#160;prominent&#160;second wave&#160;of COVID-19&#160;infections&#160;that has&#160;emerged&#160;in&#160;the&#160;state of&#160;Victoria,&#160;which&#160;</p> <p style="position:absolute;top:537px;left:196px;white-space:nowrap" class="ft07">has&#160;recorded all-time highs&#160;in&#160;daily&#160;increases&#160;in&#160;recent&#160;weeks.&#160;While&#160;authorities&#160;have been&#160;prompt&#160;to&#160;impose&#160;</p> <p style="position:absolute;top:555px;left:196px;white-space:nowrap" class="ft07">strict&#160;restrictions&#160;across&#160;the&#160;state,&#160;the&#160;impact of&#160;a&#160;lockdown on&#160;a&#160;state&#160;that&#160;contributes&#160;nearly&#160;25%&#160;to&#160;</p> <p style="position:absolute;top:573px;left:196px;white-space:nowrap" class="ft07">national&#160;income&#160;will&#160;be&#160;significant. The&#160;uncertainty&#160;will&#160;weigh&#160;on&#160;consumer&#160;confidence&#160;and&#160;may&#160;cause&#160;</p> <p style="position:absolute;top:591px;left:196px;white-space:nowrap" class="ft07">households&#160;to&#160;retreat&#160;once&#160;again.&#160;Intensifying&#160;the&#160;hit&#160;to&#160;domestic&#160;demand will&#160;be&#160;the&#160;additional&#160;strain&#160;on&#160;the&#160;</p> <p style="position:absolute;top:609px;left:196px;white-space:nowrap" class="ft07">labour&#160;market. Several&#160;non-essential&#160;businesses&#160;and&#160;retail&#160;stores&#160;were&#160;required to&#160;close&#160;in&#160;Melbourne&#160;as&#160;</p> <p style="position:absolute;top:627px;left:196px;white-space:nowrap" class="ft07">authorities&#160;strive&#160;to&#160;contain&#160;the localized&#160;outbreak.&#160;While&#160;the true extent of&#160;the&#160;second&#160;wave&#160;will&#160;become&#160;</p> <p style="position:absolute;top:645px;left:196px;white-space:nowrap" class="ft07">clear&#160;in the&#160;weeks&#160;ahead,&#160;fears&#160;of&#160;contagion&#160;are&#160;already&#160;on&#160;the&#160;rise&#160;with&#160;new&#160;cases&#160;being&#160;reported&#160;in&#160;</p> <p style="position:absolute;top:663px;left:196px;white-space:nowrap" class="ft028">neighbouring&#160;states,&#160;which,&#160;if&#160;sustained,&#160;could further&#160;amplify&#160;the&#160;latest&#160;shock&#160;to&#160;domestic&#160;consumption.&#160;<br/>A second&#160;downside&#160;risk&#160;arises&#160;from&#160;the&#160;uncertainty&#160;in&#160;overseas&#160;demand&#160;conditions.&#160;Australia’s&#160;exporters&#160;have&#160;</p> <p style="position:absolute;top:709px;left:196px;white-space:nowrap" class="ft07">so&#160;far&#160;been&#160;relatively&#160;less&#160;impacted&#160;by&#160;the&#160;COVID-19&#160;crisis,&#160;partly&#160;due&#160;to&#160;China’s&#160;ongoing&#160;recovery&#160;which&#160;has&#160;</p> <p style="position:absolute;top:727px;left:196px;white-space:nowrap" class="ft07">driven the&#160;strong&#160;demand&#160;for&#160;commodities.&#160;Even though&#160;restrictions&#160;across&#160;major&#160;economies&#160;have&#160;eased&#160;and&#160;</p> <p style="position:absolute;top:745px;left:196px;white-space:nowrap" class="ft07">the&#160;shock to&#160;global&#160;trade&#160;bottomed out&#160;in&#160;May,&#160;the&#160;uncertainty&#160;stemming&#160;from&#160;prolonged first&#160;waves&#160;in&#160;the&#160;</p> <p style="position:absolute;top:763px;left:196px;white-space:nowrap" class="ft07">U.S.,&#160;India,&#160;parts&#160;of Latin&#160;America&#160;and&#160;a&#160;resurgent&#160;second wave&#160;in&#160;parts&#160;of the&#160;Asia-Pacific&#160;threaten to&#160;disrupt&#160;</p> <p style="position:absolute;top:781px;left:196px;white-space:nowrap" class="ft07">the&#160;recovery.&#160;While&#160;China’s&#160;recovering&#160;industrial&#160;activity&#160;should still&#160;partially&#160;offset&#160;some&#160;of&#160;this&#160;weakness,&#160;it&#160;</p> <p style="position:absolute;top:799px;left:196px;white-space:nowrap" class="ft07">remains&#160;a pertinent&#160;risk&#160;that&#160;can upset&#160;the&#160;ongoing&#160;pickup&#160;in exports.&#160;Adding&#160;to this&#160;mix&#160;are&#160;intensifying&#160;</p> <p style="position:absolute;top:817px;left:196px;white-space:nowrap" class="ft07">bilateral&#160;tensions&#160;between&#160;the&#160;U.S.&#160;and China,&#160;which&#160;can&#160;potentially&#160;to&#160;evolve&#160;into&#160;another&#160;round&#160;of&#160;trade&#160;</p> <p style="position:absolute;top:835px;left:196px;white-space:nowrap" class="ft028">frictions,&#160;the&#160;implications&#160;of&#160;which,&#160;could prove&#160;more&#160;detrimental&#160;in&#160;the&#160;post-COVID-19&#160;environment.&#160;&#160;<br/>Together,&#160;these&#160;risks&#160;are expected&#160;to&#160;weigh on&#160;aggregate demand&#160;conditions&#160;and&#160;the&#160;domestic&#160;labour&#160;market,&#160;</p> <p style="position:absolute;top:881px;left:196px;white-space:nowrap" class="ft07">at least&#160;in&#160;the&#160;short-term,&#160;and&#160;moderate the recovery&#160;initially&#160;expected&#160;over&#160;the&#160;second half&#160;of 2020,&#160;with the&#160;</p> <p style="position:absolute;top:899px;left:196px;white-space:nowrap" class="ft028">depth&#160;of&#160;the&#160;slowdown crucially&#160;reliant&#160;on how&#160;effectively&#160;the&#160;second&#160;wave&#160;is&#160;contained&#160;in Australia.&#160;<br/>&#160;</p> </div> <!-- Page 16 --> <a name="16"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft048{font-size:20px;font-family:Times;color:#538dd3;} .ft049{font-size:12px;font-family:Times;color:#000000;} .ft050{font-size:-1px;font-family:Times;color:#000000;} .ft051{font-size:8px;font-family:Times;color:#000000;} .ft052{font-size:8px;line-height:16px;font-family:Times;color:#000000;} --> </style> <div id="page16-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727016.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">16&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">Ratings&#160;Round-Up&#160;</p> <p style="position:absolute;top:90px;left:196px;white-space:nowrap" class="ft013">Ratings&#160;Round-Up&#160;</p> <p style="position:absolute;top:111px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:129px;left:196px;white-space:nowrap" class="ft048">Downgrades&#160;Dominate in Latest&#160;U.S.&#160;and&#160;European Changes&#160;</p> <p style="position:absolute;top:165px;left:196px;white-space:nowrap" class="ft042">By&#160;Michael&#160;Ferlez&#160;<br/>&#160;</p> <p style="position:absolute;top:203px;left:196px;white-space:nowrap" class="ft07">Corporate&#160;credit&#160;quality&#160;worsened&#160;again&#160;last&#160;week&#160;as&#160;the&#160;effects&#160;of the&#160;pandemic&#160;continued to weigh&#160;heavily&#160;</p> <p style="position:absolute;top:222px;left:196px;white-space:nowrap" class="ft07">on a&#160;broad&#160;range&#160;of businesses.&#160;For&#160;the&#160;two-week period&#160;ended&#160;August 11,&#160;there were a&#160;total&#160;of&#160;29&#160;U.S.&#160;rating&#160;</p> <p style="position:absolute;top:240px;left:196px;white-space:nowrap" class="ft042">changes.&#160;Downgrades&#160;accounted for&#160;two-thirds&#160;of&#160;rating&#160;changes&#160;and&#160;61%&#160;of&#160;affected debt.&#160;The&#160;period’s&#160;most&#160;<br/>notable&#160;downgrade&#160;was&#160;made&#160;to&#160;<org>American Electric&#160;Power&#160;Company&#160;Inc</org>.&#160;The&#160;U.S.&#160;utility&#160;saw&#160;its&#160;senior&#160;</p> <p style="position:absolute;top:278px;left:196px;white-space:nowrap" class="ft042">unsecured&#160;credit&#160;rating&#160;cut&#160;to&#160;Baa2&#160;from&#160;Baa1,&#160;affecting&#160;<money>$10&#160;billion</money> in&#160;outstanding&#160;debt.&#160;According&#160;to&#160;<br/>Moody’s&#160;Investors&#160;Service,&#160;the&#160;downgrade&#160;reflects&#160;the&#160;weakened financial&#160;profile&#160;driven by&#160;capital&#160;programs&#160;<br/>and&#160;the increased&#160;use&#160;of&#160;leverage.&#160;The&#160;most&#160;notable&#160;upgrade was&#160;to&#160;The Sherwin-Williams&#160;company.&#160;Moody’s&#160;</p> <p style="position:absolute;top:334px;left:196px;white-space:nowrap" class="ft07">Investors&#160;Service&#160;upgraded&#160;the&#160;firm&#160;in&#160;part due&#160;to&#160;the&#160;resilience&#160;it&#160;has&#160;demonstrated&#160;during&#160;the&#160;current&#160;</p> <p style="position:absolute;top:353px;left:196px;white-space:nowrap" class="ft042">economic&#160;recession&#160;as&#160;well&#160;as&#160;its&#160;ability&#160;to reduce&#160;its&#160;debt&#160;by&#160;more&#160;than <money>$2&#160;billion</money>&#160;since&#160;acquiring&#160;Valspar&#160;in&#160;<br/>2017.&#160;</p> <p style="position:absolute;top:391px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:409px;left:196px;white-space:nowrap" class="ft07">European&#160;credit&#160;quality&#160;continues&#160;to weaken.&#160;For&#160;the&#160;two-week&#160;period ended&#160;August&#160;11,&#160;downgrades&#160;</p> <p style="position:absolute;top:428px;left:196px;white-space:nowrap" class="ft042">outnumbered upgrades&#160;8&#160;to 2.&#160;Rating&#160;change&#160;activity&#160;was&#160;spread&#160;across&#160;several&#160;industries&#160;and rating&#160;classes.&#160;<br/>France,&#160;Italy&#160;and&#160;the&#160;United Kingdom&#160;lead the&#160;way&#160;with&#160;two changes&#160;each,&#160;followed&#160;by&#160;Luxembourg&#160;and&#160;</p> <p style="position:absolute;top:466px;left:196px;white-space:nowrap" class="ft042">Portugal&#160;with&#160;one&#160;rating&#160;action&#160;each.&#160;The&#160;period’s&#160;most&#160;notable&#160;downgrade&#160;was&#160;made&#160;to Casino&#160;Guichard-<br/><org>Perrachon SA</org>.&#160;The&#160;French&#160;firm&#160;saw&#160;its&#160;corporate&#160;family&#160;rating&#160;cut&#160;to&#160;B3&#160;from&#160;B2&#160;and&#160;its&#160;senior&#160;secured credit&#160;</p> <p style="position:absolute;top:503px;left:196px;white-space:nowrap" class="ft07">rating&#160;cut&#160;to B2&#160;from&#160;B1.&#160;The&#160;downgrade&#160;reflects&#160;Moody’s&#160;Investors&#160;Service’s&#160;expectation&#160;that the&#160;group’s&#160;</p> <p style="position:absolute;top:522px;left:196px;white-space:nowrap" class="ft07">leverage will&#160;remain&#160;sustainably&#160;higher&#160;than&#160;the level&#160;commensurate with its&#160;previous&#160;rating.&#160;On&#160;the&#160;upgrade&#160;</p> <p style="position:absolute;top:541px;left:196px;white-space:nowrap" class="ft042">side,&#160;Moody’s&#160;Investors&#160;Service&#160;upgraded some&#160;of the&#160;rating&#160;and assessments&#160;of Unione&#160;di Banche&#160;Italiane&#160;<br/>S.p.A.,&#160;aligning&#160;it&#160;with&#160;those&#160;of Intesa&#160;Sanpaolo S.p.A.&#160;The&#160;rating&#160;action&#160;also&#160;included&#160;an&#160;upgrade&#160;of&#160;the&#160;firm’s&#160;</p> <p style="position:absolute;top:579px;left:196px;white-space:nowrap" class="ft07">senior&#160;unsecured credit&#160;rating&#160;to&#160;Baa1,&#160;from&#160;Baa3.&#160;</p> <p style="position:absolute;top:969px;left:826px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:597px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:621px;left:196px;white-space:nowrap" class="ft034">FIGURE&#160;1&#160;</p> <p style="position:absolute;top:635px;left:196px;white-space:nowrap" class="ft049">Rating Changes&#160;-&#160;US&#160;Corporate&#160;&amp;&#160;Financial&#160;Institutions:&#160;Favorable&#160;as&#160;%&#160;of&#160;Total&#160;Actions&#160;</p> <p style="position:absolute;top:956px;left:825px;white-space:nowrap" class="ft034">&#160;</p> <p style="position:absolute;top:966px;left:196px;white-space:nowrap" class="ft050"><i>&#160;</i></p> <p style="position:absolute;top:968px;left:196px;white-space:nowrap" class="ft06">&#160;</p> <p style="position:absolute;top:894px;left:799px;white-space:nowrap" class="ft01">0.0</p> <p style="position:absolute;top:853px;left:799px;white-space:nowrap" class="ft01">0.2</p> <p style="position:absolute;top:813px;left:799px;white-space:nowrap" class="ft01">0.4</p> <p style="position:absolute;top:773px;left:799px;white-space:nowrap" class="ft01">0.6</p> <p style="position:absolute;top:733px;left:799px;white-space:nowrap" class="ft01">0.8</p> <p style="position:absolute;top:693px;left:799px;white-space:nowrap" class="ft01">1.0</p> <p style="position:absolute;top:894px;left:210px;white-space:nowrap" class="ft01">0.0</p> <p style="position:absolute;top:853px;left:211px;white-space:nowrap" class="ft01">0.2</p> <p style="position:absolute;top:813px;left:210px;white-space:nowrap" class="ft01">0.4</p> <p style="position:absolute;top:773px;left:210px;white-space:nowrap" class="ft01">0.6</p> <p style="position:absolute;top:733px;left:210px;white-space:nowrap" class="ft01">0.8</p> <p style="position:absolute;top:693px;left:212px;white-space:nowrap" class="ft01">1.0</p> <p style="position:absolute;top:908px;left:223px;white-space:nowrap" class="ft01">Jun01</p> <p style="position:absolute;top:908px;left:312px;white-space:nowrap" class="ft01">Aug04</p> <p style="position:absolute;top:908px;left:405px;white-space:nowrap" class="ft01">Oct07</p> <p style="position:absolute;top:908px;left:496px;white-space:nowrap" class="ft01">Dec10</p> <p style="position:absolute;top:908px;left:589px;white-space:nowrap" class="ft01">Feb14</p> <p style="position:absolute;top:908px;left:681px;white-space:nowrap" class="ft01">Apr17</p> <p style="position:absolute;top:908px;left:772px;white-space:nowrap" class="ft01">Jun20</p> <p style="position:absolute;top:669px;left:374px;white-space:nowrap" class="ft06">By&#160;Count&#160;of&#160;Actions</p> <p style="position:absolute;top:669px;left:520px;white-space:nowrap" class="ft06">By&#160;Amount&#160;of&#160;Debt&#160;Affected</p> <p style="position:absolute;top:931px;left:203px;white-space:nowrap" class="ft052">*&#160;Trailing&#160;3-month&#160;&#160;average<br/><i>Source:&#160;Moody's</i></p> </div> <!-- Page 17 --> <a name="17"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft053{font-size:11px;font-family:Times;color:#4aacc5;} .ft054{font-size:11px;font-family:Times;color:#000000;} --> </style> <div id="page17-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727017.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">17&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">Ratings&#160;Round-Up&#160;</p> <p style="position:absolute;top:369px;left:826px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:384px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:87px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:111px;left:196px;white-space:nowrap" class="ft034">FIGURE&#160;2&#160;</p> <p style="position:absolute;top:125px;left:196px;white-space:nowrap" class="ft049">Rating&#160;Key&#160;</p> <p style="position:absolute;top:344px;left:825px;white-space:nowrap" class="ft034">&#160;</p> <p style="position:absolute;top:355px;left:196px;white-space:nowrap" class="ft050"><i>&#160;</i></p> <p style="position:absolute;top:356px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:145px;left:220px;white-space:nowrap" class="ft053">BCF</p> <p style="position:absolute;top:145px;left:267px;white-space:nowrap" class="ft054">Bank&#160;Credit&#160;Facility&#160;Rating</p> <p style="position:absolute;top:145px;left:544px;white-space:nowrap" class="ft053">MM</p> <p style="position:absolute;top:145px;left:593px;white-space:nowrap" class="ft054">Money-Market</p> <p style="position:absolute;top:164px;left:220px;white-space:nowrap" class="ft053">CFR</p> <p style="position:absolute;top:164px;left:267px;white-space:nowrap" class="ft054">Corporate&#160;Family&#160;Rating</p> <p style="position:absolute;top:164px;left:542px;white-space:nowrap" class="ft053">MTN</p> <p style="position:absolute;top:164px;left:593px;white-space:nowrap" class="ft054">MTN&#160;Program&#160;Rating</p> <p style="position:absolute;top:183px;left:223px;white-space:nowrap" class="ft053">CP</p> <p style="position:absolute;top:183px;left:267px;white-space:nowrap" class="ft054">Commercial&#160;Paper&#160;Rating</p> <p style="position:absolute;top:183px;left:539px;white-space:nowrap" class="ft053">Notes</p> <p style="position:absolute;top:183px;left:593px;white-space:nowrap" class="ft054">Notes</p> <p style="position:absolute;top:202px;left:221px;white-space:nowrap" class="ft053">FSR</p> <p style="position:absolute;top:202px;left:267px;white-space:nowrap" class="ft054">Bank&#160;Financial&#160;Strength&#160;Rating</p> <p style="position:absolute;top:202px;left:544px;white-space:nowrap" class="ft053">PDR</p> <p style="position:absolute;top:202px;left:593px;white-space:nowrap" class="ft054">Probability&#160;of Default&#160;Rating</p> <p style="position:absolute;top:221px;left:222px;white-space:nowrap" class="ft053">IFS</p> <p style="position:absolute;top:221px;left:267px;white-space:nowrap" class="ft054">Insurance&#160;Financial&#160;Strength&#160;Rating</p> <p style="position:absolute;top:221px;left:549px;white-space:nowrap" class="ft053">PS</p> <p style="position:absolute;top:221px;left:593px;white-space:nowrap" class="ft054">Preferred&#160;Stock&#160;Rating</p> <p style="position:absolute;top:240px;left:225px;white-space:nowrap" class="ft053">IR</p> <p style="position:absolute;top:240px;left:267px;white-space:nowrap" class="ft054">Issuer&#160;Rating</p> <p style="position:absolute;top:240px;left:541px;white-space:nowrap" class="ft053">SGLR</p> <p style="position:absolute;top:240px;left:593px;white-space:nowrap" class="ft054">Speculative-Grade&#160;Liquidity&#160;Rating</p> <p style="position:absolute;top:259px;left:215px;white-space:nowrap" class="ft053">JrSub</p> <p style="position:absolute;top:259px;left:267px;white-space:nowrap" class="ft054">Junior&#160;Subordinated&#160;Rating</p> <p style="position:absolute;top:259px;left:541px;white-space:nowrap" class="ft053">SLTD</p> <p style="position:absolute;top:259px;left:593px;white-space:nowrap" class="ft054">Short-&#160;and&#160;Long-Term&#160;Deposit Rating</p> <p style="position:absolute;top:278px;left:219px;white-space:nowrap" class="ft053">LGD</p> <p style="position:absolute;top:278px;left:267px;white-space:nowrap" class="ft054">Loss Given&#160;Default&#160;Rating</p> <p style="position:absolute;top:278px;left:540px;white-space:nowrap" class="ft053">SrSec</p> <p style="position:absolute;top:278px;left:593px;white-space:nowrap" class="ft054">Senior&#160;Secured&#160;Rating&#160;</p> <p style="position:absolute;top:297px;left:216px;white-space:nowrap" class="ft053">LTCF</p> <p style="position:absolute;top:297px;left:267px;white-space:nowrap" class="ft054">Long-Term&#160;Corporate&#160;Family&#160;Rating</p> <p style="position:absolute;top:297px;left:532px;white-space:nowrap" class="ft053">SrUnsec</p> <p style="position:absolute;top:297px;left:593px;white-space:nowrap" class="ft054">Senior&#160;Unsecured&#160;Rating&#160;</p> <p style="position:absolute;top:316px;left:220px;white-space:nowrap" class="ft053">LTD</p> <p style="position:absolute;top:316px;left:267px;white-space:nowrap" class="ft054">Long-Term&#160;Deposit&#160;Rating</p> <p style="position:absolute;top:316px;left:539px;white-space:nowrap" class="ft053">SrSub</p> <p style="position:absolute;top:316px;left:593px;white-space:nowrap" class="ft054">Senior&#160;Subordinated</p> <p 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style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">18&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">Ratings&#160;Round-Up&#160;</p> <p style="position:absolute;top:1086px;left:824px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:87px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:111px;left:196px;white-space:nowrap" class="ft034">FIGURE&#160;3&#160;</p> <p style="position:absolute;top:125px;left:196px;white-space:nowrap" class="ft049">Rating Changes:&#160;Corporate&#160;&amp;&#160;Financial&#160;Institutions&#160;–&#160;US&#160;</p> <p style="position:absolute;top:1069px;left:823px;white-space:nowrap" class="ft034">&#160;</p> <p style="position:absolute;top:1079px;left:196px;white-space:nowrap" class="ft050"><i>&#160;</i></p> <p style="position:absolute;top:1081px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:162px;left:208px;white-space:nowrap" class="ft055">Date</p> <p style="position:absolute;top:162px;left:306px;white-space:nowrap" class="ft055">Company</p> <p style="position:absolute;top:162px;left:429px;white-space:nowrap" class="ft055">Sector</p> <p style="position:absolute;top:162px;left:508px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:155px;left:580px;white-space:nowrap" class="ft055">Amount&#160; &#160;</p> <p style="position:absolute;top:169px;left:575px;white-space:nowrap" class="ft055">($&#160;Million)</p> <p style="position:absolute;top:155px;left:632px;white-space:nowrap" class="ft055">Up/&#160;</p> <p style="position:absolute;top:169px;left:627px;white-space:nowrap" class="ft055">Down</p> <p style="position:absolute;top:148px;left:664px;white-space:nowrap" class="ft055">Old&#160;</p> <p style="position:absolute;top:162px;left:664px;white-space:nowrap" class="ft055">LTD&#160;</p> <p style="position:absolute;top:175px;left:658px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:148px;left:696px;white-space:nowrap" class="ft055">New&#160;</p> <p style="position:absolute;top:162px;left:698px;white-space:nowrap" class="ft055">LTD&#160;</p> <p style="position:absolute;top:175px;left:692px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:148px;left:732px;white-space:nowrap" class="ft055">Old&#160;</p> <p style="position:absolute;top:162px;left:731px;white-space:nowrap" class="ft055">STD&#160;</p> <p style="position:absolute;top:175px;left:726px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:148px;left:764px;white-space:nowrap" class="ft055">New&#160;</p> <p style="position:absolute;top:162px;left:765px;white-space:nowrap" class="ft055">STD&#160;</p> <p style="position:absolute;top:175px;left:759px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:162px;left:793px;white-space:nowrap" class="ft055">IG/SG</p> <p style="position:absolute;top:200px;left:202px;white-space:nowrap" class="ft056">7/29/20&#160;ALBEMARLE&#160;CORPORATION</p> <p style="position:absolute;top:200px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:200px;left:498px;white-space:nowrap" class="ft056">SrUnsec/CP</p> <p style="position:absolute;top:200px;left:586px;white-space:nowrap" class="ft056">3,285</p> <p style="position:absolute;top:200px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:200px;left:662px;white-space:nowrap" class="ft056">Baa2&#160;Baa3</p> <p style="position:absolute;top:200px;left:733px;white-space:nowrap" class="ft056">P-2</p> <p style="position:absolute;top:200px;left:766px;white-space:nowrap" class="ft056">P-3</p> <p style="position:absolute;top:200px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:235px;left:202px;white-space:nowrap" class="ft056"><chron>7/29/20</chron></p> <p style="position:absolute;top:221px;left:244px;white-space:nowrap" class="ft058">SEAWORLD&#160;ENTERTAINMENT,&#160;INC.-<br/>SEAWORLD&#160;PARKS&#160;&amp;&#160;<br/>ENTERTAINMENT,&#160;INC.</p> <p style="position:absolute;top:235px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:235px;left:490px;white-space:nowrap" class="ft056">SrSec/BCF/PDR</p> <p style="position:absolute;top:235px;left:590px;white-space:nowrap" class="ft056">228</p> <p style="position:absolute;top:235px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:235px;left:667px;white-space:nowrap" class="ft056">B3</p> <p style="position:absolute;top:235px;left:701px;white-space:nowrap" class="ft056">B2</p> <p style="position:absolute;top:235px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:268px;left:202px;white-space:nowrap" class="ft056">7/30/20&#160;INGLES MARKETS,&#160;INCORPORATED</p> <p style="position:absolute;top:268px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:268px;left:479px;white-space:nowrap" class="ft056">SrUnsec/LTCFR/PDR</p> <p style="position:absolute;top:268px;left:590px;white-space:nowrap" class="ft056">545</p> <p style="position:absolute;top:268px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:268px;left:664px;white-space:nowrap" class="ft056">Ba3</p> <p style="position:absolute;top:268px;left:698px;white-space:nowrap" class="ft056">Ba2</p> <p style="position:absolute;top:268px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:292px;left:202px;white-space:nowrap" class="ft056">7/30/20&#160;ASP&#160;EMERALD&#160;HOLDINGS,&#160;LLC</p> <p style="position:absolute;top:292px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:292px;left:498px;white-space:nowrap" class="ft056">LTCFR/PDR</p> <p style="position:absolute;top:292px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:292px;left:667px;white-space:nowrap" class="ft056">B3</p> <p style="position:absolute;top:292px;left:701px;white-space:nowrap" class="ft056">B2</p> <p style="position:absolute;top:292px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:321px;left:202px;white-space:nowrap" class="ft056"><chron>7/30/20</chron></p> <p style="position:absolute;top:314px;left:244px;white-space:nowrap" class="ft058">WESCO AIRCRAFT&#160;HOLDINGS,&#160;INC.&#160;<br/>(NEW)</p> <p style="position:absolute;top:321px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:314px;left:492px;white-space:nowrap" class="ft056">SrSec/SrUnsec&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160;</p> <p style="position:absolute;top:327px;left:497px;white-space:nowrap" class="ft056">/LTCFR/PDR</p> <p style="position:absolute;top:321px;left:586px;white-space:nowrap" class="ft056">2,075</p> <p style="position:absolute;top:321px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:321px;left:662px;white-space:nowrap" class="ft056">Caa1&#160;Caa3</p> <p style="position:absolute;top:321px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:352px;left:202px;white-space:nowrap" class="ft056"><chron>7/31/20</chron></p> <p style="position:absolute;top:345px;left:244px;white-space:nowrap" class="ft058">CPK&#160;HOLDINGS, INC.-CALIFORNIA&#160;<br/>PIZZA&#160;KITCHEN,&#160;INC.&#160;(CPK)</p> <p style="position:absolute;top:352px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:352px;left:514px;white-space:nowrap" class="ft056">PDR</p> <p style="position:absolute;top:352px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:352px;left:667px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:352px;left:703px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:352px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:383px;left:204px;white-space:nowrap" class="ft056"><chron>8/3/20</chron></p> <p style="position:absolute;top:377px;left:244px;white-space:nowrap" class="ft058">FRANKLIN&#160;RESOURCES,&#160;INC.&#160;&#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160;&#160;<br/>-LEGG&#160;MASON,&#160;INC.</p> <p style="position:absolute;top:383px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:383px;left:492px;white-space:nowrap" class="ft056">SrUnsec/JrSub</p> <p style="position:absolute;top:383px;left:586px;white-space:nowrap" class="ft056">2,000</p> <p style="position:absolute;top:383px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:383px;left:663px;white-space:nowrap" class="ft056">Baa1</p> <p style="position:absolute;top:383px;left:700px;white-space:nowrap" class="ft056">A3</p> <p style="position:absolute;top:383px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:411px;left:204px;white-space:nowrap" class="ft056">8/3/20&#160;DENBURY&#160;RESOURCES INC.</p> <p style="position:absolute;top:411px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:411px;left:514px;white-space:nowrap" class="ft056">PDR</p> <p style="position:absolute;top:411px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:411px;left:667px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:411px;left:703px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:411px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:437px;left:204px;white-space:nowrap" class="ft056"><chron>8/3/20</chron></p> <p style="position:absolute;top:430px;left:244px;white-space:nowrap" class="ft058">KINDER&#160;MORGAN, INC. &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160;&#160;<br/>-<org>RUBY&#160;PIPELINE, LLC</org></p> <p style="position:absolute;top:437px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:437px;left:479px;white-space:nowrap" class="ft056">SrUnsec/LTCFR/PDR&#160;</p> <p style="position:absolute;top:437px;left:590px;white-space:nowrap" class="ft056">694</p> <p style="position:absolute;top:437px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:437px;left:665px;white-space:nowrap" class="ft056">Ba2</p> <p style="position:absolute;top:437px;left:701px;white-space:nowrap" class="ft056">B1</p> <p style="position:absolute;top:437px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:465px;left:204px;white-space:nowrap" class="ft056"><chron>8/3/20</chron></p> <p style="position:absolute;top:459px;left:244px;white-space:nowrap" class="ft058">CHENIERE CORPUS&#160;CHRISTI&#160;<br/>HOLDINGS,&#160;LLC</p> <p style="position:absolute;top:465px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:465px;left:511px;white-space:nowrap" class="ft056">SrSec&#160;</p> <p style="position:absolute;top:465px;left:586px;white-space:nowrap" class="ft056">5,750</p> <p style="position:absolute;top:465px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:465px;left:665px;white-space:nowrap" class="ft056">Ba1</p> <p style="position:absolute;top:465px;left:696px;white-space:nowrap" class="ft056">Baa3</p> <p style="position:absolute;top:465px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:493px;left:204px;white-space:nowrap" class="ft056"><chron>8/3/20</chron></p> <p style="position:absolute;top:486px;left:244px;white-space:nowrap" class="ft058">EPIC&#160;Y-GRADE,&#160;LP-EPIC&#160;Y-GRADE&#160;<br/>SERVICES,&#160;LP</p> <p style="position:absolute;top:493px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:493px;left:501px;white-space:nowrap" class="ft056">SrSec/BCF</p> <p style="position:absolute;top:493px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:493px;left:662px;white-space:nowrap" class="ft056">Caa2</p> <p style="position:absolute;top:493px;left:701px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:493px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:521px;left:204px;white-space:nowrap" class="ft056"><chron>8/4/20</chron></p> <p style="position:absolute;top:514px;left:244px;white-space:nowrap" class="ft058">HOST&#160;HOTELS&#160;&amp;&#160;RESORTS,&#160;INC.&#160;&#160;&#160; &#160;&#160;&#160; &#160;&#160;&#160;<br/>-<org>HOST&#160;HOTELS &amp;&#160;RESORTS,&#160;L.P</org>.</p> <p style="position:absolute;top:521px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:521px;left:505px;white-space:nowrap" class="ft056">SrUnsec</p> <p style="position:absolute;top:521px;left:586px;white-space:nowrap" class="ft056">2,800</p> <p style="position:absolute;top:521px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:521px;left:662px;white-space:nowrap" class="ft056">Baa2&#160;Baa3</p> <p style="position:absolute;top:521px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:547px;left:204px;white-space:nowrap" class="ft056">8/4/20&#160;CSM&#160;BAKERY&#160;SOLUTIONS&#160;LIMITED</p> <p style="position:absolute;top:547px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:547px;left:498px;white-space:nowrap" class="ft056">LTCFR/PDR</p> <p style="position:absolute;top:547px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:547px;left:662px;white-space:nowrap" class="ft056">Caa3&#160;Caa2</p> <p style="position:absolute;top:547px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:572px;left:204px;white-space:nowrap" class="ft056">8/4/20&#160;FITNESS&#160;INTERNATIONAL,&#160;LLC</p> <p style="position:absolute;top:572px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:566px;left:501px;white-space:nowrap" class="ft056">SrSec/BCF&#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;</p> <p style="position:absolute;top:579px;left:497px;white-space:nowrap" class="ft056">/LTCFR/PDR</p> <p style="position:absolute;top:572px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:572px;left:667px;white-space:nowrap" class="ft056">B3</p> <p style="position:absolute;top:572px;left:695px;white-space:nowrap" class="ft056">Caa3</p> <p style="position:absolute;top:572px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:602px;left:204px;white-space:nowrap" class="ft056"><chron>8/4/20</chron></p> <p style="position:absolute;top:595px;left:244px;white-space:nowrap" class="ft058">TAILORED&#160;BRANDS,&#160;INC.-MEN'S&#160;<br/>WEARHOUSE,&#160;INC.&#160;(THE)</p> <p style="position:absolute;top:602px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:595px;left:492px;white-space:nowrap" class="ft056">SrUnsec/SrSec&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160;</p> <p style="position:absolute;top:609px;left:486px;white-space:nowrap" class="ft056">/BCF/LTCFR/PDR</p> <p style="position:absolute;top:602px;left:590px;white-space:nowrap" class="ft056">236</p> <p style="position:absolute;top:602px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:602px;left:667px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:602px;left:704px;white-space:nowrap" class="ft056">C</p> <p style="position:absolute;top:602px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:633px;left:204px;white-space:nowrap" class="ft056"><chron>8/5/20</chron></p> <p style="position:absolute;top:626px;left:244px;white-space:nowrap" class="ft058">FORUM&#160;ENERGY&#160;TECHNOLOGIES,&#160;<br/>INC.</p> <p style="position:absolute;top:633px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:633px;left:479px;white-space:nowrap" class="ft056">SrUnsec/LTCFR/PDR</p> <p style="position:absolute;top:633px;left:590px;white-space:nowrap" class="ft056">342</p> <p style="position:absolute;top:633px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:633px;left:670px;white-space:nowrap" class="ft056">C</p> <p style="position:absolute;top:633px;left:701px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:633px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:661px;left:204px;white-space:nowrap" class="ft056">8/5/20&#160;FIELDWOOD&#160;ENERGY&#160;LLC</p> <p style="position:absolute;top:661px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:661px;left:514px;white-space:nowrap" class="ft056">PDR</p> <p style="position:absolute;top:661px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:661px;left:667px;white-space:nowrap" class="ft056">Ca</p> <p style="position:absolute;top:661px;left:703px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:661px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:690px;left:204px;white-space:nowrap" class="ft056"><chron>8/6/20</chron></p> <p style="position:absolute;top:683px;left:244px;white-space:nowrap" class="ft058">AMERICAN&#160;ELECTRIC POWER&#160;<br/>COMPANY,&#160;INC.</p> <p style="position:absolute;top:690px;left:430px;white-space:nowrap" class="ft056">Utility</p> <p style="position:absolute;top:690px;left:481px;white-space:nowrap" class="ft056">SrUnsec/LTIR/JrSub</p> <p style="position:absolute;top:690px;left:585px;white-space:nowrap" class="ft056">10,175</p> <p style="position:absolute;top:690px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:690px;left:663px;white-space:nowrap" class="ft056">Baa1</p> <p style="position:absolute;top:690px;left:696px;white-space:nowrap" class="ft056">Baa2</p> <p style="position:absolute;top:690px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:718px;left:204px;white-space:nowrap" class="ft056"><chron>8/6/20</chron></p> <p style="position:absolute;top:712px;left:244px;white-space:nowrap" class="ft058">SHERWIN-WILLIAMS&#160;COMPANY&#160;<br/>(THE)</p> <p style="position:absolute;top:718px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:718px;left:498px;white-space:nowrap" class="ft056">SrUnsec/CP</p> <p style="position:absolute;top:718px;left:586px;white-space:nowrap" class="ft056">8,318</p> <p style="position:absolute;top:718px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:718px;left:662px;white-space:nowrap" class="ft056">Baa3&#160;Baa2</p> <p style="position:absolute;top:718px;left:733px;white-space:nowrap" class="ft056">P-3</p> <p style="position:absolute;top:718px;left:767px;white-space:nowrap" class="ft056">P-2</p> <p style="position:absolute;top:718px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:747px;left:204px;white-space:nowrap" class="ft056"><chron>8/6/20</chron></p> <p style="position:absolute;top:740px;left:244px;white-space:nowrap" class="ft058">SABRE&#160;COMMUNICATIONS&#160;<br/>HOLDINGS-SABRE INDUSTRIES,&#160;INC.</p> <p style="position:absolute;top:747px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:740px;left:501px;white-space:nowrap" class="ft056">SrSec/BCF&#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;</p> <p style="position:absolute;top:754px;left:497px;white-space:nowrap" class="ft056">/LTCFR/PDR</p> <p style="position:absolute;top:747px;left:637px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:747px;left:667px;white-space:nowrap" class="ft056">B2</p> <p style="position:absolute;top:747px;left:701px;white-space:nowrap" class="ft056">B1</p> <p style="position:absolute;top:747px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:772px;left:204px;white-space:nowrap" class="ft056">8/6/20&#160;HORNBLOWER&#160;SUB,&#160;LLC</p> <p style="position:absolute;top:772px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:772px;left:514px;white-space:nowrap" class="ft056">PDR</p> <p style="position:absolute;top:772px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:772px;left:662px;white-space:nowrap" class="ft056">Caa2&#160;Caa3</p> <p style="position:absolute;top:772px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:797px;left:204px;white-space:nowrap" class="ft056">8/7/20&#160;ARCH&#160;RESOURCES,&#160;INC.</p> <p style="position:absolute;top:797px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:790px;left:501px;white-space:nowrap" class="ft056">SrSec/BCF&#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160;</p> <p style="position:absolute;top:804px;left:497px;white-space:nowrap" class="ft056">/LTCFR/PDR</p> <p style="position:absolute;top:797px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:797px;left:664px;white-space:nowrap" class="ft056">Ba3</p> <p style="position:absolute;top:797px;left:701px;white-space:nowrap" class="ft056">B1</p> <p style="position:absolute;top:797px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:825px;left:204px;white-space:nowrap" class="ft056"><chron>8/7/20</chron></p> <p style="position:absolute;top:819px;left:244px;white-space:nowrap" class="ft058">INTERCONTINENTAL&#160;EXCHANGE,&#160;<br/>INC.</p> <p style="position:absolute;top:825px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:825px;left:498px;white-space:nowrap" class="ft056">SrUnsec/CP</p> <p style="position:absolute;top:825px;left:586px;white-space:nowrap" class="ft056">7,800</p> <p style="position:absolute;top:825px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:825px;left:667px;white-space:nowrap" class="ft056">A2</p> <p style="position:absolute;top:825px;left:700px;white-space:nowrap" class="ft056">A3</p> <p style="position:absolute;top:825px;left:733px;white-space:nowrap" class="ft056">P-1</p> <p style="position:absolute;top:825px;left:767px;white-space:nowrap" class="ft056">P-2</p> <p style="position:absolute;top:825px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:854px;left:204px;white-space:nowrap" class="ft056"><chron>8/7/20</chron></p> <p style="position:absolute;top:847px;left:244px;white-space:nowrap" class="ft058">MIDAS&#160;INTERMEDIATE&#160;HOLDCO&#160;II,&#160;<br/>LLC</p> <p style="position:absolute;top:854px;left:423px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:854px;left:494px;white-space:nowrap" class="ft056">SrUnsec/PDR</p> <p style="position:absolute;top:854px;left:590px;white-space:nowrap" class="ft056">375</p> <p style="position:absolute;top:854px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:854px;left:662px;white-space:nowrap" class="ft056">Caa2&#160;Caa3</p> <p style="position:absolute;top:854px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:889px;left:202px;white-space:nowrap" class="ft056"><chron>8/11/20</chron></p> <p style="position:absolute;top:875px;left:244px;white-space:nowrap" class="ft058">PRUDENTIAL&#160;PUBLIC&#160;LIMITED&#160;<br/>COMPANY-JACKSON&#160;NATIONAL&#160;LIFE&#160;<br/>INSURANCE&#160;COMPANY</p> <p style="position:absolute;top:889px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:889px;left:513px;white-space:nowrap" class="ft056">SPN</p> <p style="position:absolute;top:889px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:889px;left:667px;white-space:nowrap" class="ft056">A3</p> <p style="position:absolute;top:889px;left:696px;white-space:nowrap" class="ft056">Baa1</p> <p style="position:absolute;top:889px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:929px;left:202px;white-space:nowrap" class="ft056"><chron>8/11/20</chron></p> <p style="position:absolute;top:916px;left:244px;white-space:nowrap" class="ft058">PRUDENTIAL&#160;PUBLIC&#160;LIMITED&#160;<br/>COMPANY-JACKSON&#160;NATIONAL&#160;LIFE&#160;<br/>GLOBAL FUNDING</p> <p style="position:absolute;top:929px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:929px;left:512px;white-space:nowrap" class="ft056">MTN</p> <p style="position:absolute;top:929px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:929px;left:661px;white-space:nowrap" class="ft056">(P)A1&#160;(P)A2</p> <p style="position:absolute;top:929px;left:801px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:970px;left:202px;white-space:nowrap" class="ft056"><chron>8/11/20</chron></p> <p style="position:absolute;top:957px;left:244px;white-space:nowrap" class="ft058">PRUDENTIAL&#160;PUBLIC&#160;LIMITED&#160;<br/>COMPANY-JACKSON&#160;NATIONAL&#160;LIFE&#160;<br/>INSURANCE&#160;CO OF&#160;NEW&#160;YORK</p> <p style="position:absolute;top:970px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:970px;left:513px;white-space:nowrap" class="ft056">IFSR</p> <p style="position:absolute;top:970px;left:637px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:970px;left:668px;white-space:nowrap" class="ft056">A1</p> <p style="position:absolute;top:970px;left:701px;white-space:nowrap" class="ft056">A2</p> <p style="position:absolute;top:970px;left:802px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:1011px;left:202px;white-space:nowrap" class="ft056"><chron>8/11/20</chron></p> <p style="position:absolute;top:997px;left:244px;white-space:nowrap" class="ft058">PRUDENTIAL&#160;PUBLIC&#160;LIMITED&#160;<br/>COMPANY-JACKSON&#160;NATIONAL&#160;LIFE&#160;<br/>GLOBAL FUNDING</p> <p style="position:absolute;top:1011px;left:424px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:1004px;left:492px;white-space:nowrap" class="ft056">SrSec/SrUnsec&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160; 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height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727019.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">19&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:65px;white-space:nowrap" class="ft011">Ratings&#160;Round-Up&#160;</p> <p style="position:absolute;top:87px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:120px;left:196px;white-space:nowrap" class="ft034">FIGURE&#160;4&#160;</p> <p style="position:absolute;top:134px;left:196px;white-space:nowrap" class="ft049">Rating Changes:&#160;Corporate&#160;&amp;&#160;Financial&#160;Institutions&#160;–&#160;Europe&#160;</p> <p style="position:absolute;top:466px;left:825px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:480px;left:196px;white-space:nowrap" class="ft050"><i>&#160;</i></p> <p style="position:absolute;top:482px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:509px;left:196px;white-space:nowrap" class="ft049">&#160;</p> <p style="position:absolute;top:172px;left:211px;white-space:nowrap" class="ft055">Date</p> <p style="position:absolute;top:172px;left:305px;white-space:nowrap" class="ft055">Company</p> <p style="position:absolute;top:172px;left:418px;white-space:nowrap" class="ft055">Sector</p> <p style="position:absolute;top:172px;left:498px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:165px;left:577px;white-space:nowrap" class="ft055">Amount&#160; &#160;</p> <p style="position:absolute;top:179px;left:571px;white-space:nowrap" class="ft055">($&#160;Million)</p> <p style="position:absolute;top:165px;left:630px;white-space:nowrap" class="ft055">Up/&#160;</p> <p style="position:absolute;top:179px;left:625px;white-space:nowrap" class="ft055">Down</p> <p style="position:absolute;top:158px;left:663px;white-space:nowrap" class="ft055">Old&#160;</p> <p style="position:absolute;top:172px;left:662px;white-space:nowrap" class="ft055">LTD&#160;</p> <p style="position:absolute;top:185px;left:657px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:158px;left:695px;white-space:nowrap" class="ft055">New&#160;</p> <p style="position:absolute;top:172px;left:696px;white-space:nowrap" class="ft055">LTD&#160;</p> <p style="position:absolute;top:185px;left:691px;white-space:nowrap" class="ft055">Rating</p> <p style="position:absolute;top:172px;left:724px;white-space:nowrap" class="ft055">IG/SG</p> <p style="position:absolute;top:172px;left:771px;white-space:nowrap" class="ft055">Country</p> <p style="position:absolute;top:211px;left:204px;white-space:nowrap" class="ft056"><chron>7/30/20</chron></p> <p style="position:absolute;top:205px;left:248px;white-space:nowrap" class="ft058">EDA&#160;-&#160;ELECTRICIDADE DOS&#160;<br/>ACORES,&#160;S.A.</p> <p style="position:absolute;top:211px;left:419px;white-space:nowrap" class="ft056">Utility</p> <p style="position:absolute;top:211px;left:500px;white-space:nowrap" class="ft056">LTCFR</p> <p style="position:absolute;top:211px;left:635px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:211px;left:663px;white-space:nowrap" class="ft056">Ba2</p> <p style="position:absolute;top:211px;left:698px;white-space:nowrap" class="ft056">Ba1</p> <p style="position:absolute;top:211px;left:732px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:211px;left:764px;white-space:nowrap" class="ft056">PORTUGAL</p> <p style="position:absolute;top:245px;left:205px;white-space:nowrap" class="ft056"><chron>7/31/20</chron></p> <p style="position:absolute;top:231px;left:248px;white-space:nowrap" class="ft058">FCT&#160;ROCADE&#160;L2&#160;MARSEILLE-<br/>SOCIETE DE LA&#160;ROCADE L2&#160;DE&#160;<br/>MARSEILLE</p> <p style="position:absolute;top:245px;left:413px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:245px;left:501px;white-space:nowrap" class="ft056">SrSec&#160;</p> <p style="position:absolute;top:245px;left:589px;white-space:nowrap" class="ft056">92</p> <p style="position:absolute;top:245px;left:635px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:245px;left:661px;white-space:nowrap" class="ft056">Baa1</p> <p style="position:absolute;top:245px;left:695px;white-space:nowrap" class="ft056">Baa2</p> <p style="position:absolute;top:245px;left:733px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:245px;left:771px;white-space:nowrap" class="ft056">FRANCE</p> <p style="position:absolute;top:285px;left:206px;white-space:nowrap" class="ft056"><chron>8/6/20</chron></p> <p style="position:absolute;top:272px;left:248px;white-space:nowrap" class="ft058">INTESA&#160;SANPAOLO S.P.A.&#160;&#160;&#160;&#160;&#160;&#160;&#160; &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<br/>-UNIONE&#160;DI&#160;BANCHE&#160;ITALIANE&#160;<br/>S.P.A.</p> <p style="position:absolute;top:285px;left:414px;white-space:nowrap" class="ft056">Financial</p> <p style="position:absolute;top:279px;left:474px;white-space:nowrap" class="ft056">SrUnsec/JrSrunsec&#160;&#160;&#160;&#160;&#160;&#160;&#160; &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; &#160;</p> <p style="position:absolute;top:292px;left:462px;white-space:nowrap" class="ft056">/LTIR/LTD/Sub/MTN/PS</p> <p style="position:absolute;top:285px;left:582px;white-space:nowrap" class="ft056">8,687</p> <p style="position:absolute;top:285px;left:635px;white-space:nowrap" class="ft056">U</p> <p style="position:absolute;top:285px;left:661px;white-space:nowrap" class="ft056">Baa3</p> <p style="position:absolute;top:285px;left:695px;white-space:nowrap" class="ft056">Baa1</p> <p style="position:absolute;top:285px;left:733px;white-space:nowrap" class="ft056">IG</p> <p style="position:absolute;top:285px;left:777px;white-space:nowrap" class="ft056">ITALY</p> <p style="position:absolute;top:322px;left:206px;white-space:nowrap" class="ft056"><chron>8/6/20</chron></p> <p style="position:absolute;top:315px;left:248px;white-space:nowrap" class="ft058">CASINO&#160;GUICHARD-PERRACHON&#160;<br/>SA</p> <p style="position:absolute;top:322px;left:413px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:315px;left:472px;white-space:nowrap" class="ft056">SrSec/SrUnsec/BCF&#160; &#160;&#160; &#160;&#160; &#160;&#160; &#160;&#160;&#160; &#160;&#160; &#160;&#160;</p> <p style="position:absolute;top:329px;left:464px;white-space:nowrap" class="ft056">/LTCFR/Sub/PDR/MTN&#160;</p> <p style="position:absolute;top:322px;left:583px;white-space:nowrap" class="ft056">7,535</p> <p style="position:absolute;top:322px;left:635px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:322px;left:666px;white-space:nowrap" class="ft056">B1</p> <p style="position:absolute;top:322px;left:700px;white-space:nowrap" class="ft056">B2</p> <p style="position:absolute;top:322px;left:732px;white-space:nowrap" class="ft056">SG</p> <p style="position:absolute;top:322px;left:771px;white-space:nowrap" class="ft056">FRANCE</p> <p style="position:absolute;top:353px;left:206px;white-space:nowrap" class="ft056">8/6/20&#160;PIZZAEXPRESS&#160;FINANCING&#160;1&#160;PLC</p> <p style="position:absolute;top:353px;left:413px;white-space:nowrap" class="ft056">Industrial</p> <p style="position:absolute;top:353px;left:501px;white-space:nowrap" class="ft056">SrSec&#160;</p> <p style="position:absolute;top:353px;left:583px;white-space:nowrap" class="ft056">1,483</p> <p style="position:absolute;top:353px;left:635px;white-space:nowrap" class="ft056">D</p> <p style="position:absolute;top:353px;left:660px;white-space:nowrap" class="ft056">Caa3</p> <p style="position:absolute;top:353px;left:700px;white-space:nowrap" class="ft056">Ca</p> 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src="http://mco.acquiremedia.com/images/PBC_1241727020.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">20&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:60px;white-space:nowrap" class="ft011">Market&#160;Data&#160;</p> <p style="position:absolute;top:88px;left:196px;white-space:nowrap" class="ft061">Market&#160;Data&#160;<br/>&#160;</p> <p style="position:absolute;top:139px;left:196px;white-space:nowrap" class="ft062">Spreads&#160;<br/>&#160;</p> <p style="position:absolute;top:452px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:475px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:767px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:420px;left:838px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:374px;left:838px;white-space:nowrap" class="ft01">200</p> <p style="position:absolute;top:328px;left:838px;white-space:nowrap" class="ft01">400</p> <p style="position:absolute;top:282px;left:838px;white-space:nowrap" class="ft01">600</p> <p style="position:absolute;top:236px;left:838px;white-space:nowrap" class="ft01">800</p> <p style="position:absolute;top:420px;left:218px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:374px;left:206px;white-space:nowrap" class="ft01">200</p> <p style="position:absolute;top:328px;left:206px;white-space:nowrap" class="ft01">400</p> <p style="position:absolute;top:282px;left:206px;white-space:nowrap" class="ft01">600</p> <p style="position:absolute;top:236px;left:206px;white-space:nowrap" class="ft01">800</p> <p style="position:absolute;top:434px;left:222px;white-space:nowrap" class="ft01">2003&#160;2004&#160;2005&#160;2006&#160;2007&#160;2008&#160;2009&#160;2010&#160;2011&#160;2012&#160;2013&#160;2014&#160;2015&#160;2016&#160;2017&#160;2018&#160;2019&#160;2020</p> <p style="position:absolute;top:217px;left:200px;white-space:nowrap" class="ft01">Spread&#160;(bp)</p> <p style="position:absolute;top:218px;left:804px;white-space:nowrap" class="ft01">Spread&#160;(bp)</p> <p style="position:absolute;top:204px;left:240px;white-space:nowrap" class="ft01">&#160;Aa2</p> <p style="position:absolute;top:204px;left:303px;white-space:nowrap" class="ft01">&#160;A2</p> <p style="position:absolute;top:204px;left:360px;white-space:nowrap" class="ft01">&#160;Baa2</p> <p style="position:absolute;top:453px;left:202px;white-space:nowrap" class="ft051"><i>Source:&#160;Moody's</i></p> <p style="position:absolute;top:186px;left:207px;white-space:nowrap" class="ft01">Figure&#160;&#160;1:&#160;5-Year&#160;&#160;Median&#160;Spreads-Global&#160;Data&#160;(High&#160;Grade)</p> <p style="position:absolute;top:736px;left:830px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:699px;left:830px;white-space:nowrap" class="ft01">400</p> <p style="position:absolute;top:663px;left:830px;white-space:nowrap" class="ft01">800</p> <p style="position:absolute;top:627px;left:830px;white-space:nowrap" class="ft01">1,200</p> <p style="position:absolute;top:591px;left:830px;white-space:nowrap" class="ft01">1,600</p> <p style="position:absolute;top:554px;left:830px;white-space:nowrap" class="ft01">2,000</p> <p style="position:absolute;top:736px;left:227px;white-space:nowrap" class="ft01">0</p> <p style="position:absolute;top:699px;left:215px;white-space:nowrap" class="ft01">400</p> <p style="position:absolute;top:663px;left:215px;white-space:nowrap" class="ft01">800</p> <p style="position:absolute;top:627px;left:209px;white-space:nowrap" class="ft01">1,200</p> <p style="position:absolute;top:591px;left:208px;white-space:nowrap" class="ft01">1,600</p> <p style="position:absolute;top:554px;left:207px;white-space:nowrap" class="ft01">2,000</p> <p style="position:absolute;top:750px;left:232px;white-space:nowrap" class="ft01">2003&#160;2004&#160;2005&#160;2006&#160;2007&#160;2008&#160;2009&#160;2010&#160;2011&#160;2012&#160;2013&#160;2014&#160;2015&#160;2016&#160;2017&#160;2018&#160;2019&#160;2020</p> <p style="position:absolute;top:540px;left:200px;white-space:nowrap" class="ft034">Spread&#160;(bp)</p> <p style="position:absolute;top:540px;left:812px;white-space:nowrap" class="ft034">Spread&#160;(bp)</p> <p style="position:absolute;top:526px;left:236px;white-space:nowrap" class="ft01">&#160;Ba2</p> <p style="position:absolute;top:526px;left:295px;white-space:nowrap" class="ft01">&#160;B2</p> <p style="position:absolute;top:526px;left:348px;white-space:nowrap" class="ft01">&#160;Caa-C</p> <p style="position:absolute;top:766px;left:198px;white-space:nowrap" class="ft051"><i>Source:&#160;Moody's</i></p> <p style="position:absolute;top:506px;left:205px;white-space:nowrap" class="ft01">Figure&#160;&#160;2:&#160;5-Year&#160;&#160;Median&#160;Spreads-Global&#160;&#160;Data&#160;(High&#160;&#160;Yield)</p> </div> <!-- Page 21 --> <a name="21"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft063{font-size:9px;font-family:Times;color:#528dd4;} .ft064{font-size:9px;font-family:Times;color:#333333;} .ft065{font-size:9px;font-family:Times;color:#333333;} .ft066{font-size:9px;line-height:17px;font-family:Times;color:#528dd4;} .ft067{font-size:9px;line-height:16px;font-family:Times;color:#528dd4;} --> </style> <div id="page21-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727021.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">21&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:60px;white-space:nowrap" class="ft011">Market&#160;Data&#160;</p> <p style="position:absolute;top:87px;left:196px;white-space:nowrap" class="ft059">CDS Movers&#160;</p> <p style="position:absolute;top:121px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:945px;left:864px;white-space:nowrap" class="ft059">&#160;</p> <p style="position:absolute;top:170px;left:199px;white-space:nowrap" class="ft066">CDS&#160;Implied&#160;Rating&#160;Rises<br/>Issuer</p> <p style="position:absolute;top:187px;left:516px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:187px;left:612px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:187px;left:687px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:202px;left:199px;white-space:nowrap" class="ft064">JPMorgan&#160;Chase&#160;Bank,&#160;N.A.</p> <p style="position:absolute;top:202px;left:527px;white-space:nowrap" class="ft064">A1</p> <p style="position:absolute;top:202px;left:620px;white-space:nowrap" class="ft064">A2</p> <p 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style="position:absolute;top:248px;left:523px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:248px;left:617px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:248px;left:715px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:263px;left:199px;white-space:nowrap" class="ft064">United&#160;Parcel&#160;Service,&#160;Inc.</p> <p style="position:absolute;top:263px;left:523px;white-space:nowrap" class="ft064">Aaa</p> <p style="position:absolute;top:263px;left:618px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:263px;left:715px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:279px;left:199px;white-space:nowrap" class="ft064">Bank&#160;of&#160;America,&#160;N.A.</p> <p style="position:absolute;top:279px;left:526px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:279px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:279px;left:712px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:294px;left:199px;white-space:nowrap" class="ft064">Conagra&#160;Brands,&#160;Inc.</p> <p style="position:absolute;top:294px;left:524px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:294px;left:617px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:294px;left:710px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:309px;left:199px;white-space:nowrap" class="ft064">Carnival&#160;Corporation</p> <p style="position:absolute;top:309px;left:520px;white-space:nowrap" class="ft064">Caa2</p> <p style="position:absolute;top:309px;left:615px;white-space:nowrap" class="ft064">Caa3</p> <p style="position:absolute;top:309px;left:713px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:324px;left:199px;white-space:nowrap" class="ft064"><org>NRG Energy,&#160;Inc</org>.</p> <p style="position:absolute;top:324px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:324px;left:618px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:324px;left:713px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:339px;left:199px;white-space:nowrap" class="ft064"><org>OneMain Finance&#160;Corporation</org></p> <p style="position:absolute;top:338px;left:524px;white-space:nowrap" class="ft064">Ba3</p> <p style="position:absolute;top:338px;left:621px;white-space:nowrap" class="ft064">B1</p> <p style="position:absolute;top:338px;left:713px;white-space:nowrap" class="ft064">Ba3</p> <p style="position:absolute;top:369px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Implied&#160;Rating&#160;Declines<br/>Issuer</p> <p style="position:absolute;top:385px;left:516px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:385px;left:612px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:385px;left:687px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:400px;left:199px;white-space:nowrap" class="ft064"><org>Verizon Communications&#160;Inc</org>.</p> <p style="position:absolute;top:400px;left:521px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:400px;left:620px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:400px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:416px;left:199px;white-space:nowrap" class="ft064">Morgan Stanley</p> <p style="position:absolute;top:416px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:416px;left:616px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:416px;left:715px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:431px;left:199px;white-space:nowrap" class="ft064">McDonald's&#160;Corporation</p> <p style="position:absolute;top:431px;left:524px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:431px;left:617px;white-space:nowrap" class="ft064">Aaa</p> <p style="position:absolute;top:431px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:446px;left:199px;white-space:nowrap" class="ft064">John&#160;Deere&#160;Capital&#160;Corporation</p> <p style="position:absolute;top:446px;left:526px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:446px;left:621px;white-space:nowrap" class="ft064">A1</p> <p style="position:absolute;top:446px;left:715px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:461px;left:199px;white-space:nowrap" class="ft064">Boeing&#160;Company&#160;(The)</p> <p style="position:absolute;top:461px;left:527px;white-space:nowrap" class="ft064">B2</p> <p style="position:absolute;top:461px;left:621px;white-space:nowrap" class="ft064">B1</p> <p style="position:absolute;top:461px;left:710px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:477px;left:199px;white-space:nowrap" class="ft064">Intel&#160;Corporation</p> <p style="position:absolute;top:477px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:477px;left:616px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:477px;left:715px;white-space:nowrap" class="ft064">A1</p> <p style="position:absolute;top:492px;left:199px;white-space:nowrap" class="ft064">HCA&#160;Inc.</p> <p style="position:absolute;top:492px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:492px;left:616px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:492px;left:713px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:507px;left:199px;white-space:nowrap" class="ft064">Enterprise&#160;Products&#160;Operating,&#160;LLC</p> <p style="position:absolute;top:507px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:507px;left:616px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:507px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:522px;left:199px;white-space:nowrap" class="ft064">Philip&#160;Morris&#160;International&#160;Inc.</p> <p style="position:absolute;top:522px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:522px;left:616px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:522px;left:715px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:537px;left:199px;white-space:nowrap" class="ft064">Capital&#160;One&#160;Financial&#160;Corporation</p> <p style="position:absolute;top:536px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:536px;left:616px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:536px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:567px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Spread&#160;Increases<br/>Issuer</p> <p style="position:absolute;top:583px;left:498px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:583px;left:610px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:583px;left:706px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:583px;left:789px;white-space:nowrap" class="ft063">Spread Diff</p> <p style="position:absolute;top:599px;left:199px;white-space:nowrap" class="ft064">Pride&#160;International,&#160;Inc.</p> <p style="position:absolute;top:599px;left:526px;white-space:nowrap" class="ft064">Ca</p> <p style="position:absolute;top:599px;left:611px;white-space:nowrap" class="ft064">22,732</p> <p style="position:absolute;top:599px;left:705px;white-space:nowrap" class="ft064">22,413</p> <p style="position:absolute;top:599px;left:806px;white-space:nowrap" class="ft064">320</p> <p style="position:absolute;top:614px;left:199px;white-space:nowrap" class="ft064"><org>Nabors Industries,&#160;Inc</org>.</p> <p style="position:absolute;top:614px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:614px;left:613px;white-space:nowrap" class="ft064">3,043</p> <p style="position:absolute;top:614px;left:708px;white-space:nowrap" class="ft064">2,989</p> <p style="position:absolute;top:614px;left:809px;white-space:nowrap" class="ft064">54</p> <p style="position:absolute;top:629px;left:199px;white-space:nowrap" class="ft064">Occidental&#160;Petroleum&#160;Corporation</p> <p style="position:absolute;top:629px;left:524px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:629px;left:617px;white-space:nowrap" class="ft064">455</p> <p style="position:absolute;top:629px;left:712px;white-space:nowrap" class="ft064">426</p> <p style="position:absolute;top:629px;left:809px;white-space:nowrap" class="ft064">30</p> <p style="position:absolute;top:644px;left:199px;white-space:nowrap" class="ft064">Ford&#160;Motor&#160;Company</p> <p style="position:absolute;top:644px;left:524px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:644px;left:617px;white-space:nowrap" class="ft064">324</p> <p style="position:absolute;top:644px;left:712px;white-space:nowrap" class="ft064">305</p> <p style="position:absolute;top:644px;left:810px;white-space:nowrap" class="ft064">19</p> <p style="position:absolute;top:659px;left:199px;white-space:nowrap" class="ft064">Navistar&#160;International&#160;Corp.</p> <p style="position:absolute;top:659px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:659px;left:618px;white-space:nowrap" class="ft064">316</p> <p style="position:absolute;top:659px;left:713px;white-space:nowrap" class="ft064">299</p> <p style="position:absolute;top:659px;left:810px;white-space:nowrap" class="ft064">18</p> <p style="position:absolute;top:675px;left:199px;white-space:nowrap" class="ft064">Mattel,&#160;Inc.</p> <p style="position:absolute;top:675px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:675px;left:618px;white-space:nowrap" class="ft064">375</p> <p style="position:absolute;top:675px;left:713px;white-space:nowrap" class="ft064">359</p> <p style="position:absolute;top:675px;left:810px;white-space:nowrap" class="ft064">16</p> <p style="position:absolute;top:690px;left:199px;white-space:nowrap" class="ft064">Avient&#160;Corporation</p> <p style="position:absolute;top:690px;left:524px;white-space:nowrap" class="ft064">Ba3</p> <p style="position:absolute;top:690px;left:618px;white-space:nowrap" class="ft064">165</p> <p style="position:absolute;top:690px;left:713px;white-space:nowrap" class="ft064">150</p> <p style="position:absolute;top:690px;left:810px;white-space:nowrap" class="ft064">15</p> <p style="position:absolute;top:705px;left:199px;white-space:nowrap" class="ft064"><org>American Axle&#160;&amp;&#160;Manufacturing,&#160;Inc</org>.</p> <p style="position:absolute;top:705px;left:527px;white-space:nowrap" class="ft064">B2</p> <p style="position:absolute;top:705px;left:617px;white-space:nowrap" class="ft064">407</p> <p style="position:absolute;top:705px;left:713px;white-space:nowrap" class="ft064">392</p> <p style="position:absolute;top:705px;left:810px;white-space:nowrap" class="ft064">14</p> <p style="position:absolute;top:720px;left:199px;white-space:nowrap" class="ft064">UDR,&#160;Inc.</p> <p style="position:absolute;top:720px;left:521px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:720px;left:618px;white-space:nowrap" class="ft064">667</p> <p style="position:absolute;top:720px;left:712px;white-space:nowrap" class="ft064">654</p> <p style="position:absolute;top:720px;left:810px;white-space:nowrap" class="ft064">13</p> <p style="position:absolute;top:735px;left:199px;white-space:nowrap" class="ft064">Unisys&#160;Corporation</p> <p style="position:absolute;top:734px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:734px;left:618px;white-space:nowrap" class="ft064">182</p> <p style="position:absolute;top:734px;left:713px;white-space:nowrap" class="ft064">172</p> <p style="position:absolute;top:734px;left:810px;white-space:nowrap" class="ft064">10</p> <p style="position:absolute;top:765px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Spread&#160;Decreases<br/>Issuer</p> <p style="position:absolute;top:781px;left:498px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:781px;left:610px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:781px;left:706px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:781px;left:789px;white-space:nowrap" class="ft063">Spread Diff</p> <p style="position:absolute;top:797px;left:199px;white-space:nowrap" class="ft064"><org>American Airlines&#160;Group&#160;Inc</org>.</p> <p style="position:absolute;top:797px;left:521px;white-space:nowrap" class="ft064">Caa1</p> <p style="position:absolute;top:797px;left:614px;white-space:nowrap" class="ft064">2,677</p> <p style="position:absolute;top:797px;left:707px;white-space:nowrap" class="ft064">3,028</p> <p style="position:absolute;top:797px;left:805px;white-space:nowrap" class="ft064">-351</p> <p style="position:absolute;top:812px;left:199px;white-space:nowrap" class="ft064">Staples,&#160;Inc.</p> <p style="position:absolute;top:812px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:812px;left:614px;white-space:nowrap" class="ft064">1,685</p> <p style="position:absolute;top:812px;left:708px;white-space:nowrap" class="ft064">1,838</p> <p style="position:absolute;top:812px;left:805px;white-space:nowrap" class="ft064">-153</p> <p style="position:absolute;top:827px;left:199px;white-space:nowrap" class="ft064"><org>K.&#160;Hovnanian Enterprises,&#160;Inc</org>.</p> <p style="position:absolute;top:827px;left:520px;white-space:nowrap" class="ft064">Caa3</p> <p style="position:absolute;top:827px;left:614px;white-space:nowrap" class="ft064">1,950</p> <p style="position:absolute;top:827px;left:707px;white-space:nowrap" class="ft064">2,084</p> <p style="position:absolute;top:827px;left:805px;white-space:nowrap" class="ft064">-135</p> <p style="position:absolute;top:842px;left:199px;white-space:nowrap" class="ft064">MGM&#160;Resorts&#160;International</p> <p style="position:absolute;top:842px;left:524px;white-space:nowrap" class="ft064">Ba3</p> <p style="position:absolute;top:842px;left:618px;white-space:nowrap" class="ft064">333</p> <p style="position:absolute;top:842px;left:712px;white-space:nowrap" class="ft064">427</p> <p style="position:absolute;top:842px;left:807px;white-space:nowrap" class="ft064">-94</p> <p style="position:absolute;top:858px;left:199px;white-space:nowrap" class="ft064">Pitney&#160;Bowes&#160;Inc.</p> <p style="position:absolute;top:858px;left:527px;white-space:nowrap" class="ft064">B1</p> <p style="position:absolute;top:858px;left:617px;white-space:nowrap" class="ft064">441</p> <p style="position:absolute;top:858px;left:713px;white-space:nowrap" class="ft064">527</p> <p style="position:absolute;top:858px;left:807px;white-space:nowrap" class="ft064">-86</p> <p style="position:absolute;top:873px;left:199px;white-space:nowrap" class="ft064">Talen&#160;Energy&#160;Supply,&#160;LLC</p> <p style="position:absolute;top:873px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:873px;left:615px;white-space:nowrap" class="ft064">1,336</p> <p style="position:absolute;top:873px;left:709px;white-space:nowrap" class="ft064">1,416</p> <p style="position:absolute;top:873px;left:807px;white-space:nowrap" class="ft064">-80</p> <p style="position:absolute;top:888px;left:199px;white-space:nowrap" class="ft064"><org>Avis&#160;Budget Car&#160;Rental,&#160;LLC</org></p> <p style="position:absolute;top:888px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:888px;left:617px;white-space:nowrap" class="ft064">550</p> <p style="position:absolute;top:888px;left:712px;white-space:nowrap" class="ft064">624</p> <p style="position:absolute;top:888px;left:807px;white-space:nowrap" class="ft064">-74</p> <p style="position:absolute;top:903px;left:199px;white-space:nowrap" class="ft064">Carnival&#160;Corporation</p> <p style="position:absolute;top:903px;left:524px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:903px;left:617px;white-space:nowrap" class="ft064">873</p> <p style="position:absolute;top:903px;left:712px;white-space:nowrap" class="ft064">946</p> <p style="position:absolute;top:903px;left:808px;white-space:nowrap" class="ft064">-73</p> <p style="position:absolute;top:918px;left:199px;white-space:nowrap" class="ft064">Royal&#160;Caribbean&#160;Cruises&#160;Ltd.</p> <p style="position:absolute;top:918px;left:524px;white-space:nowrap" class="ft064">Ba2</p> <p style="position:absolute;top:918px;left:615px;white-space:nowrap" class="ft064">1,162</p> <p style="position:absolute;top:918px;left:708px;white-space:nowrap" class="ft064">1,228</p> <p style="position:absolute;top:918px;left:808px;white-space:nowrap" class="ft064">-66</p> <p style="position:absolute;top:933px;left:199px;white-space:nowrap" class="ft064">United&#160;Airlines&#160;Holdings,&#160;Inc.</p> <p style="position:absolute;top:932px;left:524px;white-space:nowrap" class="ft064">Ba3</p> <p style="position:absolute;top:932px;left:618px;white-space:nowrap" class="ft064">953</p> <p style="position:absolute;top:932px;left:708px;white-space:nowrap" class="ft064">1,006</p> <p style="position:absolute;top:932px;left:807px;white-space:nowrap" class="ft064">-54</p> <p style="position:absolute;top:949px;left:199px;white-space:nowrap" class="ft065"><i>Source:&#160;Moody's,&#160;CMA</i></p> <p style="position:absolute;top:765px;left:691px;white-space:nowrap" class="ft063">CDS&#160;Spreads&#160;</p> <p style="position:absolute;top:171px;left:532px;white-space:nowrap" class="ft063">CDS&#160;Implied Ratings</p> <p style="position:absolute;top:369px;left:532px;white-space:nowrap" class="ft063">CDS&#160;Implied Ratings</p> <p style="position:absolute;top:567px;left:691px;white-space:nowrap" class="ft063">CDS&#160;Spreads&#160;</p> <p style="position:absolute;top:149px;left:199px;white-space:nowrap" class="ft01">Figure&#160;3.&#160; CDS&#160;Movers&#160;-&#160;US&#160;(<chron>August&#160;5,&#160;2020</chron>&#160;–&#160;August&#160;12,&#160;2020)</p> </div> <!-- Page 22 --> <a name="22"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page22-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727022.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">22&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:60px;white-space:nowrap" class="ft011">Market&#160;Data&#160;</p> <p style="position:absolute;top:886px;left:864px;white-space:nowrap" class="ft059">&#160;</p> <p style="position:absolute;top:109px;left:199px;white-space:nowrap" class="ft066">CDS&#160;Implied&#160;Rating&#160;Rises<br/>Issuer</p> <p style="position:absolute;top:127px;left:515px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:127px;left:611px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:127px;left:687px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:142px;left:199px;white-space:nowrap" class="ft064">Credit&#160;Agricole&#160;S.A.</p> <p style="position:absolute;top:142px;left:524px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:142px;left:617px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:142px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:157px;left:199px;white-space:nowrap" class="ft064">Electricite&#160;de&#160;France</p> <p style="position:absolute;top:157px;left:523px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:157px;left:617px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:157px;left:714px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:172px;left:199px;white-space:nowrap" class="ft064"><org>Svenska&#160;Handelsbanken AB</org></p> <p style="position:absolute;top:172px;left:524px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:172px;left:617px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:172px;left:711px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:188px;left:199px;white-space:nowrap" class="ft064">Total&#160;SE</p> <p style="position:absolute;top:188px;left:523px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:188px;left:617px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:188px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:203px;left:199px;white-space:nowrap" class="ft064">Bayerische Motoren&#160;Werke Aktiengesellschaft</p> <p style="position:absolute;top:203px;left:527px;white-space:nowrap" class="ft064">A1</p> <p style="position:absolute;top:203px;left:620px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:203px;left:714px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:218px;left:199px;white-space:nowrap" class="ft064">UniCredit&#160;Bank&#160;Austria&#160;AG</p> <p style="position:absolute;top:218px;left:526px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:218px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:218px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:233px;left:199px;white-space:nowrap" class="ft064">ENEL&#160;S.p.A.</p> <p style="position:absolute;top:233px;left:526px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:233px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:233px;left:710px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:249px;left:199px;white-space:nowrap" class="ft064">Heineken&#160;N.V.</p> <p style="position:absolute;top:249px;left:523px;white-space:nowrap" class="ft064">Aaa</p> <p style="position:absolute;top:249px;left:618px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:249px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:264px;left:199px;white-space:nowrap" class="ft064"><org>Telia Company&#160;AB</org></p> <p style="position:absolute;top:264px;left:523px;white-space:nowrap" class="ft064">Aaa</p> <p style="position:absolute;top:264px;left:618px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:264px;left:710px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:278px;left:199px;white-space:nowrap" class="ft064">Credit&#160;Suisse&#160;AG</p> <p style="position:absolute;top:277px;left:526px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:277px;left:615px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:277px;left:715px;white-space:nowrap" class="ft064">A1</p> <p style="position:absolute;top:309px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Implied&#160;Rating&#160;Declines<br/>Issuer</p> <p style="position:absolute;top:325px;left:515px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:325px;left:611px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:325px;left:687px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:340px;left:199px;white-space:nowrap" class="ft064">Bank&#160;of&#160;Scotland&#160;plc</p> <p style="position:absolute;top:340px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:340px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:340px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:355px;left:199px;white-space:nowrap" class="ft064">Santander&#160;UK&#160;plc</p> <p style="position:absolute;top:355px;left:521px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:355px;left:615px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:355px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:371px;left:199px;white-space:nowrap" class="ft064">Nordea Bank&#160;Abp</p> <p style="position:absolute;top:371px;left:523px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:371px;left:618px;white-space:nowrap" class="ft064">Aa1</p> <p style="position:absolute;top:371px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:386px;left:199px;white-space:nowrap" class="ft064"><org>Standard Chartered PLC</org></p> <p style="position:absolute;top:386px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:386px;left:615px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:386px;left:714px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:401px;left:199px;white-space:nowrap" class="ft064">Bayerische Landesbank</p> <p style="position:absolute;top:401px;left:521px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:401px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:401px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:416px;left:199px;white-space:nowrap" class="ft064">Swedbank&#160;AB</p> <p style="position:absolute;top:416px;left:523px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:416px;left:617px;white-space:nowrap" class="ft064">Aa2</p> <p style="position:absolute;top:416px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:432px;left:199px;white-space:nowrap" class="ft064">Landesbank&#160;Baden-Wuerttemberg</p> <p style="position:absolute;top:432px;left:521px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:432px;left:620px;white-space:nowrap" class="ft064">A3</p> <p style="position:absolute;top:432px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:447px;left:199px;white-space:nowrap" class="ft064">Fresenius&#160;SE&#160;&amp;&#160;Co.&#160;KGaA</p> <p style="position:absolute;top:447px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:447px;left:615px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:447px;left:710px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:462px;left:199px;white-space:nowrap" class="ft064">Santander&#160;Financial&#160;Services&#160;plc</p> <p style="position:absolute;top:462px;left:521px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:462px;left:615px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:462px;left:711px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:477px;left:199px;white-space:nowrap" class="ft064">BAWAG&#160;P.S.K.</p> <p style="position:absolute;top:476px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:476px;left:615px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:476px;left:714px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:507px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Spread&#160;Increases<br/>Issuer</p> <p style="position:absolute;top:523px;left:498px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:523px;left:609px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:523px;left:706px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:523px;left:789px;white-space:nowrap" class="ft063">Spread Diff</p> <p style="position:absolute;top:538px;left:199px;white-space:nowrap" class="ft064">Valaris&#160;plc</p> <p style="position:absolute;top:538px;left:526px;white-space:nowrap" class="ft064">Ca</p> <p style="position:absolute;top:538px;left:610px;white-space:nowrap" class="ft064">25,927</p> <p style="position:absolute;top:538px;left:705px;white-space:nowrap" class="ft064">24,331</p> <p style="position:absolute;top:538px;left:803px;white-space:nowrap" class="ft064">1,596</p> <p style="position:absolute;top:554px;left:199px;white-space:nowrap" class="ft064">PizzaExpress&#160;Financing&#160;1&#160;plc</p> <p style="position:absolute;top:554px;left:528px;white-space:nowrap" class="ft064">C</p> <p style="position:absolute;top:554px;left:610px;white-space:nowrap" class="ft064">38,501</p> <p style="position:absolute;top:554px;left:706px;white-space:nowrap" class="ft064">37,163</p> <p style="position:absolute;top:554px;left:802px;white-space:nowrap" class="ft064">1,338</p> <p style="position:absolute;top:569px;left:199px;white-space:nowrap" class="ft064">Vue&#160;International&#160;Bidco&#160;plc</p> <p style="position:absolute;top:569px;left:520px;white-space:nowrap" class="ft064">Caa2</p> <p style="position:absolute;top:569px;left:614px;white-space:nowrap" class="ft064">1,103</p> <p style="position:absolute;top:569px;left:712px;white-space:nowrap" class="ft064">979</p> <p style="position:absolute;top:569px;left:807px;white-space:nowrap" class="ft064">124</p> <p style="position:absolute;top:584px;left:199px;white-space:nowrap" class="ft064"><org>Casino&#160;Guichard-Perrachon SA</org></p> <p style="position:absolute;top:584px;left:521px;white-space:nowrap" class="ft064">Caa1</p> <p style="position:absolute;top:584px;left:618px;white-space:nowrap" class="ft064">851</p> <p style="position:absolute;top:584px;left:711px;white-space:nowrap" class="ft064">783</p> <p style="position:absolute;top:584px;left:809px;white-space:nowrap" class="ft064">68</p> <p style="position:absolute;top:600px;left:199px;white-space:nowrap" class="ft064">Bankinter,&#160;S.A.</p> <p style="position:absolute;top:600px;left:521px;white-space:nowrap" class="ft064">Baa1</p> <p style="position:absolute;top:600px;left:618px;white-space:nowrap" class="ft064">106</p> <p style="position:absolute;top:600px;left:715px;white-space:nowrap" class="ft064">99</p> <p style="position:absolute;top:600px;left:812px;white-space:nowrap" class="ft064">8</p> <p style="position:absolute;top:615px;left:199px;white-space:nowrap" class="ft064">Swedbank&#160;AB</p> <p style="position:absolute;top:615px;left:523px;white-space:nowrap" class="ft064">Aa3</p> <p style="position:absolute;top:615px;left:621px;white-space:nowrap" class="ft064">39</p> <p style="position:absolute;top:615px;left:715px;white-space:nowrap" class="ft064">36</p> <p style="position:absolute;top:615px;left:813px;white-space:nowrap" class="ft064">3</p> <p style="position:absolute;top:630px;left:199px;white-space:nowrap" class="ft064">Severn&#160;Trent&#160;Plc</p> <p style="position:absolute;top:630px;left:521px;white-space:nowrap" class="ft064">Baa2</p> <p style="position:absolute;top:630px;left:621px;white-space:nowrap" class="ft064">67</p> <p style="position:absolute;top:630px;left:714px;white-space:nowrap" class="ft064">64</p> <p style="position:absolute;top:630px;left:813px;white-space:nowrap" class="ft064">3</p> <p style="position:absolute;top:645px;left:199px;white-space:nowrap" class="ft064"><org>Standard Chartered PLC</org></p> <p style="position:absolute;top:645px;left:526px;white-space:nowrap" class="ft064">A2</p> <p style="position:absolute;top:645px;left:620px;white-space:nowrap" class="ft064">58</p> <p style="position:absolute;top:645px;left:715px;white-space:nowrap" class="ft064">56</p> <p style="position:absolute;top:645px;left:813px;white-space:nowrap" class="ft064">2</p> <p style="position:absolute;top:661px;left:199px;white-space:nowrap" class="ft064">Fresenius&#160;SE&#160;&amp;&#160;Co.&#160;KGaA</p> <p style="position:absolute;top:661px;left:521px;white-space:nowrap" class="ft064">Baa3</p> <p style="position:absolute;top:661px;left:621px;white-space:nowrap" class="ft064">59</p> <p style="position:absolute;top:661px;left:715px;white-space:nowrap" class="ft064">57</p> <p style="position:absolute;top:661px;left:813px;white-space:nowrap" class="ft064">2</p> <p style="position:absolute;top:675px;left:199px;white-space:nowrap" class="ft064">Heathrow&#160;Finance&#160;plc</p> <p style="position:absolute;top:674px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:674px;left:620px;white-space:nowrap" class="ft064">83</p> <p style="position:absolute;top:674px;left:715px;white-space:nowrap" class="ft064">81</p> <p style="position:absolute;top:674px;left:813px;white-space:nowrap" class="ft064">2</p> <p style="position:absolute;top:705px;left:199px;white-space:nowrap" class="ft067">CDS&#160;Spread&#160;Decreases<br/>Issuer</p> <p style="position:absolute;top:722px;left:498px;white-space:nowrap" class="ft063">Senior&#160;Ratings</p> <p style="position:absolute;top:722px;left:609px;white-space:nowrap" class="ft063"><chron>Aug.&#160;12</chron></p> <p style="position:absolute;top:722px;left:706px;white-space:nowrap" class="ft063"><chron>Aug.&#160;5</chron></p> <p style="position:absolute;top:722px;left:789px;white-space:nowrap" class="ft063">Spread Diff</p> <p style="position:absolute;top:737px;left:199px;white-space:nowrap" class="ft064">Selecta&#160;Group&#160;B.V.</p> <p style="position:absolute;top:737px;left:520px;white-space:nowrap" class="ft064">Caa3</p> <p style="position:absolute;top:737px;left:613px;white-space:nowrap" class="ft064">4,526</p> <p style="position:absolute;top:737px;left:708px;white-space:nowrap" class="ft064">5,170</p> <p style="position:absolute;top:737px;left:804px;white-space:nowrap" class="ft064">-643</p> <p style="position:absolute;top:752px;left:199px;white-space:nowrap" class="ft064">Vedanta&#160;Resources&#160;Limited</p> <p style="position:absolute;top:752px;left:527px;white-space:nowrap" class="ft064">B3</p> <p style="position:absolute;top:752px;left:613px;white-space:nowrap" class="ft064">1,009</p> <p style="position:absolute;top:752px;left:708px;white-space:nowrap" class="ft064">1,387</p> <p style="position:absolute;top:752px;left:804px;white-space:nowrap" class="ft064">-378</p> <p style="position:absolute;top:767px;left:199px;white-space:nowrap" class="ft064"><org>TUI AG</org></p> <p style="position:absolute;top:767px;left:521px;white-space:nowrap" class="ft064">Caa1</p> <p style="position:absolute;top:767px;left:613px;white-space:nowrap" class="ft064">1,097</p> <p style="position:absolute;top:767px;left:709px;white-space:nowrap" class="ft064">1,451</p> <p style="position:absolute;top:767px;left:804px;white-space:nowrap" class="ft064">-354</p> <p style="position:absolute;top:783px;left:199px;white-space:nowrap" class="ft064">Jaguar&#160;Land&#160;Rover&#160;Automotive&#160;Plc</p> <p style="position:absolute;top:783px;left:527px;white-space:nowrap" class="ft064">B1</p> <p style="position:absolute;top:783px;left:617px;white-space:nowrap" class="ft064">750</p> <p style="position:absolute;top:783px;left:711px;white-space:nowrap" class="ft064">830</p> <p style="position:absolute;top:783px;left:807px;white-space:nowrap" class="ft064">-80</p> <p style="position:absolute;top:798px;left:199px;white-space:nowrap" class="ft064"><org>Iceland&#160;Bondco plc</org></p> <p style="position:absolute;top:798px;left:520px;white-space:nowrap" class="ft064">Caa2</p> <p style="position:absolute;top:798px;left:617px;white-space:nowrap" class="ft064">624</p> <p style="position:absolute;top:798px;left:711px;white-space:nowrap" class="ft064">674</p> <p style="position:absolute;top:798px;left:807px;white-space:nowrap" class="ft064">-50</p> <p style="position:absolute;top:813px;left:199px;white-space:nowrap" class="ft064">thyssenkrupp AG</p> <p style="position:absolute;top:813px;left:527px;white-space:nowrap" class="ft064">B1</p> <p style="position:absolute;top:813px;left:617px;white-space:nowrap" class="ft064">264</p> <p style="position:absolute;top:813px;left:712px;white-space:nowrap" class="ft064">295</p> <p style="position:absolute;top:813px;left:808px;white-space:nowrap" class="ft064">-31</p> <p style="position:absolute;top:828px;left:199px;white-space:nowrap" class="ft064">Piraeus&#160;Bank&#160;S.A.</p> <p style="position:absolute;top:828px;left:520px;white-space:nowrap" class="ft064">Caa2</p> <p style="position:absolute;top:828px;left:617px;white-space:nowrap" class="ft064">865</p> <p style="position:absolute;top:828px;left:711px;white-space:nowrap" class="ft064">894</p> <p style="position:absolute;top:828px;left:808px;white-space:nowrap" class="ft064">-29</p> <p style="position:absolute;top:844px;left:199px;white-space:nowrap" class="ft064"><org>CMA&#160;CGM S.A.</org></p> <p style="position:absolute;top:844px;left:521px;white-space:nowrap" class="ft064">Caa1</p> <p style="position:absolute;top:844px;left:617px;white-space:nowrap" class="ft064">700</p> <p style="position:absolute;top:844px;left:712px;white-space:nowrap" class="ft064">729</p> <p style="position:absolute;top:844px;left:808px;white-space:nowrap" class="ft064">-29</p> <p style="position:absolute;top:859px;left:199px;white-space:nowrap" class="ft064">Marks&#160;&amp;&#160;Spencer&#160;p.l.c.</p> <p style="position:absolute;top:859px;left:524px;white-space:nowrap" class="ft064">Ba1</p> <p style="position:absolute;top:859px;left:617px;white-space:nowrap" class="ft064">258</p> <p style="position:absolute;top:859px;left:711px;white-space:nowrap" class="ft064">287</p> <p style="position:absolute;top:859px;left:808px;white-space:nowrap" class="ft064">-29</p> <p style="position:absolute;top:873px;left:199px;white-space:nowrap" class="ft064">Novafives&#160;S.A.S.</p> <p style="position:absolute;top:872px;left:520px;white-space:nowrap" class="ft064">Caa2</p> <p style="position:absolute;top:872px;left:613px;white-space:nowrap" class="ft064">1,037</p> <p style="position:absolute;top:872px;left:708px;white-space:nowrap" class="ft064">1,060</p> <p style="position:absolute;top:872px;left:807px;white-space:nowrap" class="ft064">-24</p> <p style="position:absolute;top:889px;left:199px;white-space:nowrap" class="ft065"><i>Source:&#160;Moody's,&#160;CMA</i></p> <p style="position:absolute;top:705px;left:691px;white-space:nowrap" class="ft063">CDS&#160;Spreads&#160;</p> <p style="position:absolute;top:110px;left:531px;white-space:nowrap" class="ft063">CDS&#160;Implied Ratings</p> <p style="position:absolute;top:309px;left:531px;white-space:nowrap" class="ft063">CDS&#160;Implied Ratings</p> <p style="position:absolute;top:507px;left:691px;white-space:nowrap" class="ft063">CDS&#160;Spreads&#160;</p> <p style="position:absolute;top:88px;left:199px;white-space:nowrap" class="ft01">Figure&#160;4.&#160; CDS&#160;Movers&#160;-&#160;Europe&#160;(<chron>August&#160;5,&#160;2020</chron>&#160;–&#160;August&#160;12,&#160;2020)</p> </div> <!-- Page 23 --> <a name="23"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft068{font-size:9px;font-family:Times;color:#000000;} .ft069{font-size:12px;font-family:Times;color:#333333;} .ft070{font-size:11px;font-family:Times;color:#333333;} .ft071{font-size:14px;font-family:Times;color:#000000;} --> </style> <div id="page23-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727023.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">23&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:60px;white-space:nowrap" class="ft011">Market&#160;Data&#160;</p> <p style="position:absolute;top:87px;left:196px;white-space:nowrap" class="ft059">Issuance&#160;</p> <p style="position:absolute;top:116px;left:196px;white-space:nowrap" class="ft068"><i>&#160;</i></p> <p style="position:absolute;top:437px;left:864px;white-space:nowrap" class="ft068"><i>&#160;</i></p> <p style="position:absolute;top:453px;left:196px;white-space:nowrap" class="ft068"><i>&#160;</i></p> <p style="position:absolute;top:773px;left:864px;white-space:nowrap" class="ft068"><i>&#160;</i></p> <p style="position:absolute;top:386px;left:827px;white-space:nowrap" class="ft069">0</p> <p style="position:absolute;top:344px;left:827px;white-space:nowrap" class="ft069">600</p> <p style="position:absolute;top:302px;left:827px;white-space:nowrap" class="ft069">1,200</p> <p style="position:absolute;top:260px;left:827px;white-space:nowrap" class="ft069">1,800</p> <p style="position:absolute;top:218px;left:827px;white-space:nowrap" class="ft069">2,400</p> <p style="position:absolute;top:386px;left:224px;white-space:nowrap" class="ft069">0</p> <p style="position:absolute;top:344px;left:209px;white-space:nowrap" class="ft069">600</p> <p style="position:absolute;top:302px;left:200px;white-space:nowrap" class="ft069">1,200</p> <p style="position:absolute;top:260px;left:199px;white-space:nowrap" class="ft069">1,800</p> <p style="position:absolute;top:218px;left:198px;white-space:nowrap" class="ft069">2,400</p> <p style="position:absolute;top:405px;left:259px;white-space:nowrap" class="ft069">Jan&#160;Feb&#160;Mar</p> <p style="position:absolute;top:405px;left:368px;white-space:nowrap" class="ft069">Apr</p> <p style="position:absolute;top:405px;left:410px;white-space:nowrap" class="ft069">May</p> <p style="position:absolute;top:405px;left:468px;white-space:nowrap" class="ft069">Jun</p> <p style="position:absolute;top:405px;left:514px;white-space:nowrap" class="ft069">Jul</p> <p style="position:absolute;top:405px;left:554px;white-space:nowrap" class="ft069">Aug</p> <p style="position:absolute;top:405px;left:610px;white-space:nowrap" class="ft069">Sep</p> <p style="position:absolute;top:405px;left:665px;white-space:nowrap" class="ft069">Oct</p> <p style="position:absolute;top:405px;left:708px;white-space:nowrap" class="ft069">Nov</p> <p style="position:absolute;top:405px;left:764px;white-space:nowrap" class="ft069">Dec</p> <p style="position:absolute;top:188px;left:203px;white-space:nowrap" class="ft069">Issuance&#160;($B)</p> <p style="position:absolute;top:186px;left:783px;white-space:nowrap" class="ft069">Issuance&#160;($B)</p> <p style="position:absolute;top:187px;left:410px;white-space:nowrap" class="ft069">2017</p> <p style="position:absolute;top:187px;left:497px;white-space:nowrap" class="ft069">2018</p> <p style="position:absolute;top:187px;left:584px;white-space:nowrap" class="ft069">2019</p> <p style="position:absolute;top:187px;left:671px;white-space:nowrap" class="ft069">2020</p> <p style="position:absolute;top:427px;left:203px;white-space:nowrap" class="ft070"><i>Source:&#160;&#160;</i></p> <p style="position:absolute;top:428px;left:246px;white-space:nowrap" class="ft065"><i>Moody's&#160; /&#160;Dealogic</i></p> <p style="position:absolute;top:140px;left:210px;white-space:nowrap" class="ft071">Figure&#160;5.&#160;Market&#160;Cumulative Issuance&#160;-&#160;Corporate &amp;&#160;Financial&#160;Institutions:&#160;USD&#160;Denominated</p> <p style="position:absolute;top:727px;left:829px;white-space:nowrap" class="ft069">0</p> <p style="position:absolute;top:690px;left:829px;white-space:nowrap" class="ft069">200</p> <p style="position:absolute;top:653px;left:829px;white-space:nowrap" class="ft069">400</p> <p style="position:absolute;top:617px;left:829px;white-space:nowrap" class="ft069">600</p> <p style="position:absolute;top:580px;left:829px;white-space:nowrap" class="ft069">800</p> <p style="position:absolute;top:543px;left:829px;white-space:nowrap" class="ft069">1,000</p> <p style="position:absolute;top:727px;left:223px;white-space:nowrap" class="ft069">0</p> <p style="position:absolute;top:690px;left:208px;white-space:nowrap" class="ft069">200</p> <p style="position:absolute;top:653px;left:207px;white-space:nowrap" class="ft069">400</p> <p style="position:absolute;top:617px;left:207px;white-space:nowrap" class="ft069">600</p> <p style="position:absolute;top:580px;left:207px;white-space:nowrap" class="ft069">800</p> <p style="position:absolute;top:543px;left:198px;white-space:nowrap" class="ft069">1,000</p> <p style="position:absolute;top:746px;left:258px;white-space:nowrap" class="ft069">Jan&#160;Feb&#160;Mar</p> <p style="position:absolute;top:746px;left:368px;white-space:nowrap" class="ft069">Apr</p> <p style="position:absolute;top:746px;left:411px;white-space:nowrap" class="ft069">May</p> <p style="position:absolute;top:746px;left:470px;white-space:nowrap" class="ft069">Jun</p> <p style="position:absolute;top:746px;left:517px;white-space:nowrap" class="ft069">Jul</p> <p style="position:absolute;top:746px;left:558px;white-space:nowrap" class="ft069">Aug</p> <p style="position:absolute;top:746px;left:615px;white-space:nowrap" class="ft069">Sep</p> <p style="position:absolute;top:746px;left:670px;white-space:nowrap" class="ft069">Oct</p> <p style="position:absolute;top:746px;left:714px;white-space:nowrap" class="ft069">Nov</p> <p style="position:absolute;top:746px;left:771px;white-space:nowrap" class="ft069">Dec</p> <p style="position:absolute;top:514px;left:206px;white-space:nowrap" class="ft069">Issuance&#160;($B)</p> <p style="position:absolute;top:514px;left:783px;white-space:nowrap" class="ft069">Issuance&#160;($B)</p> <p style="position:absolute;top:517px;left:416px;white-space:nowrap" class="ft069">2017</p> <p style="position:absolute;top:517px;left:502px;white-space:nowrap" class="ft069">2018</p> <p style="position:absolute;top:517px;left:589px;white-space:nowrap" class="ft069">2019</p> <p style="position:absolute;top:517px;left:677px;white-space:nowrap" class="ft069">2020</p> <p style="position:absolute;top:763px;left:202px;white-space:nowrap" class="ft070"><i>Source:&#160;&#160;</i></p> <p style="position:absolute;top:764px;left:245px;white-space:nowrap" class="ft065"><i>Moody's&#160;/&#160;Dealogic</i></p> <p style="position:absolute;top:479px;left:209px;white-space:nowrap" class="ft071">Figure&#160;6.&#160;Market&#160;Cumulative Issuance&#160;-&#160;Corporate&#160;&amp;&#160;Financial&#160;Institutions:&#160;Euro&#160;&#160;Denominated</p> </div> <!-- Page 24 --> <a name="24"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft072{font-size:13px;font-family:Times;color:#333333;} .ft073{font-size:13px;font-family:Times;color:#4aacc5;} --> </style> <div id="page24-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727024.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">24&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:61px;left:60px;white-space:nowrap" class="ft011">Market&#160;Data&#160;</p> <p style="position:absolute;top:399px;left:864px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:403px;left:1080px;white-space:nowrap" class="ft068"><i>&#160;</i></p> <p style="position:absolute;top:144px;left:394px;white-space:nowrap" class="ft072">Investment-Grade</p> <p style="position:absolute;top:144px;left:588px;white-space:nowrap" class="ft072">High-Yield</p> <p style="position:absolute;top:144px;left:774px;white-space:nowrap" class="ft072">Total*</p> <p style="position:absolute;top:164px;left:423px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:164px;left:596px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:164px;left:768px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:181px;left:440px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:181px;left:613px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:181px;left:786px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:201px;left:265px;white-space:nowrap" class="ft072">Weekly</p> <p style="position:absolute;top:201px;left:425px;white-space:nowrap" class="ft072">39.074</p> <p style="position:absolute;top:201px;left:599px;white-space:nowrap" class="ft072">22.090</p> <p style="position:absolute;top:201px;left:773px;white-space:nowrap" class="ft072">62.279</p> <p style="position:absolute;top:221px;left:247px;white-space:nowrap" class="ft072">Year-to-Date</p> <p style="position:absolute;top:221px;left:418px;white-space:nowrap" class="ft072">1,436.351</p> <p style="position:absolute;top:221px;left:595px;white-space:nowrap" class="ft072">345.049</p> <p style="position:absolute;top:221px;left:763px;white-space:nowrap" class="ft072">1,842.316</p> <p style="position:absolute;top:276px;left:394px;white-space:nowrap" class="ft072">Investment-Grade</p> <p style="position:absolute;top:276px;left:588px;white-space:nowrap" class="ft072">High-Yield</p> <p style="position:absolute;top:276px;left:774px;white-space:nowrap" class="ft072">Total*</p> <p style="position:absolute;top:296px;left:423px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:296px;left:596px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:296px;left:768px;white-space:nowrap" class="ft072">Amount</p> <p style="position:absolute;top:313px;left:440px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:313px;left:613px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:313px;left:786px;white-space:nowrap" class="ft072">$B</p> <p style="position:absolute;top:333px;left:265px;white-space:nowrap" class="ft072">Weekly</p> <p style="position:absolute;top:333px;left:431px;white-space:nowrap" class="ft072">0.118</p> <p style="position:absolute;top:333px;left:601px;white-space:nowrap" class="ft072">0.000</p> <p style="position:absolute;top:333px;left:776px;white-space:nowrap" class="ft072">0.177</p> <p style="position:absolute;top:353px;left:247px;white-space:nowrap" class="ft072">Year-to-Date</p> <p style="position:absolute;top:353px;left:423px;white-space:nowrap" class="ft072">560.113</p> <p style="position:absolute;top:353px;left:600px;white-space:nowrap" class="ft072">72.373</p> <p style="position:absolute;top:353px;left:768px;white-space:nowrap" class="ft072">655.130</p> <p style="position:absolute;top:373px;left:199px;white-space:nowrap" class="ft069">*&#160;Difference&#160;represents issuance&#160;with&#160;pending&#160;ratings.</p> <p style="position:absolute;top:394px;left:199px;white-space:nowrap" class="ft070"><i>Source:&#160;Moody's/&#160;Dealogic</i></p> <p style="position:absolute;top:123px;left:560px;white-space:nowrap" class="ft073">USD&#160;Denominated</p> <p style="position:absolute;top:256px;left:560px;white-space:nowrap" class="ft073">Euro&#160;Denominated</p> <p style="position:absolute;top:100px;left:200px;white-space:nowrap" class="ft071">Figure 7.&#160;Issuance:&#160;Corporate &amp;&#160;Financial&#160;Institutions</p> </div> <!-- Page 25 --> <a name="25"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft074{font-size:13px;font-family:Times;color:#1256c5;} .ft075{font-size:13px;font-family:Times;color:#4471c4;} .ft076{font-size:13px;line-height:26px;font-family:Times;color:#4471c4;} .ft077{font-size:13px;line-height:26px;font-family:Times;color:#1256c5;} --> </style> <div id="page25-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727025.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">25&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:90px;left:196px;white-space:nowrap" class="ft074">Moody’s&#160;Capital&#160;Markets&#160;Research recent&#160;publications&#160;&#160;</p> <p style="position:absolute;top:108px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:135px;left:196px;white-space:nowrap" class="ft076"><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1240102">Unprecedented&#160;Stimulus&#160;Lessens&#160;the&#160;Blow&#160;from&#160;Real&#160;GDP’s&#160;Record&#160;Dive&#160;(Capital&#160;Markets&#160;Research)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1239249">Ultra-Low&#160;Bond Yields&#160;Buoy&#160;Corporate&#160;Borrowing&#160;(<org>Capital Markets Research</org>)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1237222">Record-High&#160;Savings&#160;Rate&#160;and&#160;Ample&#160;Liquidity&#160;May&#160;Fund&#160;an Upside&#160;Surprise&#160;(<org>Capital Markets&#160;Research</org>)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1235538">Unprecedented&#160;Demographic&#160;Change&#160;Will&#160;Shape&#160;Credit&#160;Markets&#160;Through&#160;2030&#160;(Capital&#160;Markets&#160;Research)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1234558">Net&#160;High-Yield&#160;Downgrades Drop&#160;from&#160;Dreadful&#160;Readings of&#160;March&#160;and April&#160;(<org>Capital&#160;Markets Research</org>)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1232454">Long&#160;Stay&#160;by&#160;Low&#160;Rates&#160;Fuels&#160;Corporate Debt and&#160;Equity&#160;Rallies&#160;(Capital&#160;Markets&#160;Research)&#160;<br/></a><a href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1234794">Why&#160;Industrial&#160;(Warehouse)&#160;Will&#160;(Likely)&#160;Fare&#160;Better&#160;</a>(Capital&#160;Markers&#160;Research)&#160;<br/><a 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href="http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1203100">Corporate&#160;Bond Issuance&#160;Reflects&#160;Business&#160;Activity’s&#160;Heightened&#160;Sensitivity&#160;to&#160;Rates&#160;(Capital&#160;Markets&#160;Research)&#160;</a></p> <p style="position:absolute;top:1076px;left:196px;white-space:nowrap" class="ft07">&#160;</p> <p style="position:absolute;top:1076px;left:412px;white-space:nowrap" class="ft074">&#160;</p> </div> <!-- Page 26 --> <a name="26"></a> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page26-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727026.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">26&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:99px;left:153px;white-space:nowrap" class="ft054">To order&#160;reprints&#160;of&#160;this&#160;report&#160;(100&#160;copies&#160;minimum), 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.ft080{font-size:9px;line-height:17px;font-family:Times;color:#000000;} --> </style> <div id="page27-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241727027.png" alt="background image"/> <p style="position:absolute;top:31px;left:223px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:31px;left:250px;white-space:nowrap" class="ft00">&#160;</p> <p style="position:absolute;top:1136px;left:196px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:1144px;left:55px;white-space:nowrap" class="ft030">27&#160;&#160;</p> <p style="position:absolute;top:1144px;left:109px;white-space:nowrap" class="ft030"><chron>AUGUST&#160;13,&#160;2020</chron>&#160;</p> <p style="position:absolute;top:1144px;left:568px;white-space:nowrap" class="ft030">CAPITAL MARKETS&#160;RESEARCH&#160;&#160;/ &#160;MARKET&#160;OUTLOOK&#160;&#160;/ &#160;<a href="http://MOODYS.COM">MOODYS.COM</a>&#160;</p> <p style="position:absolute;top:26px;left:687px;white-space:nowrap" class="ft04"><b>CAPITAL&#160;MARKETS&#160;RESEARCH&#160;</b></p> <p style="position:absolute;top:40px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:55px;left:524px;white-space:nowrap" class="ft01">&#160;</p> <p style="position:absolute;top:87px;left:61px;white-space:nowrap" class="ft038">©&#160;2020&#160;Moody’s Corporation,&#160;Moody’s <org>Investors Service,&#160;Inc</org>.,&#160;Moody’s Analytics,&#160;Inc.&#160;and/or&#160;their&#160;licensors and affiliates (collectively, “MOODY’S”). All&#160;rights&#160;reserved.&#160;<br/><b>CREDIT RATINGS&#160;ISSUED BY&#160;MOODY'S&#160;INVESTORS&#160;SERVICE,&#160;INC.&#160;AND ITS&#160;RATINGS&#160;AFFILIATES&#160;(“MIS”)&#160;ARE&#160;MOODY’S&#160;CURRENT OPINIONS&#160;OF&#160;THE&#160;RELATIVE&#160;</b></p> <p style="position:absolute;top:117px;left:61px;white-space:nowrap" class="ft078"><b>FUTURE&#160;CREDIT RISK&#160;OF ENTITIES,&#160;CREDIT COMMITMENTS,&#160;OR&#160;DEBT OR&#160;DEBT-LIKE&#160;SECURITIES,&#160;AND&#160;MOODY’S&#160;PUBLICATIONS&#160;MAY&#160;INCLUDE&#160;MOODY’S&#160;CURRENT&#160;</b></p> <p style="position:absolute;top:130px;left:61px;white-space:nowrap" class="ft078"><b>OPINIONS&#160;OF THE&#160;RELATIVE&#160;FUTURE&#160;CREDIT RISK&#160;OF ENTITIES,&#160;CREDIT COMMITMENTS,&#160;OR&#160;DEBT OR&#160;DEBT-LIKE&#160;SECURITIES.&#160;MOODY’S&#160;DEFINES&#160;CREDIT RISK&#160;AS&#160;</b></p> <p style="position:absolute;top:143px;left:61px;white-space:nowrap" class="ft078"><b>THE&#160;RISK&#160;THAT AN&#160;ENTITY&#160;MAY&#160;NOT MEET ITS&#160;CONTRACTUAL&#160;FINANCIAL&#160;OBLIGATIONS&#160;AS&#160;THEY&#160;COME&#160;DUE&#160;AND ANY&#160;ESTIMATED FINANCIAL&#160;LOSS&#160;IN&#160;THE&#160;</b></p> <p style="position:absolute;top:156px;left:61px;white-space:nowrap" class="ft078"><b>EVENT OF DEFAULT OR&#160;IMPAIRMENT.&#160;SEE&#160;MOODY’S&#160;RATING&#160;SYMBOLS&#160;AND DEFINITIONS&#160;PUBLICATION&#160;FOR&#160;INFORMATION&#160;ON&#160;THE&#160;TYPES&#160;OF CONTRACTUAL&#160;</b></p> <p style="position:absolute;top:169px;left:61px;white-space:nowrap" class="ft078"><b>FINANCIAL&#160;OBLIGATIONS&#160;ADDRESSED BY&#160;MOODY’S&#160;RATINGS.&#160;CREDIT RATINGS&#160;DO&#160;NOT&#160;ADDRESS&#160;ANY&#160;OTHER&#160;RISK,&#160;INCLUDING&#160;BUT NOT&#160;LIMITED TO:&#160;</b></p> <p style="position:absolute;top:182px;left:61px;white-space:nowrap" class="ft078"><b>LIQUIDITY&#160;RISK,&#160;MARKET VALUE&#160;RISK,&#160;OR&#160;PRICE&#160;VOLATILITY.&#160;CREDIT RATINGS&#160;AND MOODY’S&#160;OPINIONS&#160;INCLUDED IN&#160;MOODY’S&#160;PUBLICATIONS&#160;ARE&#160;NOT&#160;</b></p> <p style="position:absolute;top:194px;left:61px;white-space:nowrap" class="ft078"><b>STATEMENTS&#160;OF CURRENT OR&#160;HISTORICAL&#160;FACT.&#160;MOODY’S&#160;PUBLICATIONS&#160;MAY&#160;ALSO INCLUDE&#160;QUANTITATIVE&#160;MODEL-BASED ESTIMATES&#160;OF CREDIT RISK&#160;AND&#160;</b></p> <p style="position:absolute;top:207px;left:61px;white-space:nowrap" class="ft078"><b>RELATED OPINIONS&#160;OR&#160;COMMENTARY&#160;PUBLISHED&#160;BY&#160;MOODY’S&#160;ANALYTICS,&#160;INC.&#160;CREDIT RATINGS&#160;AND MOODY’S&#160;PUBLICATIONS&#160;DO NOT CONSTITUTE&#160;OR&#160;</b></p> <p style="position:absolute;top:220px;left:61px;white-space:nowrap" class="ft078"><b>PROVIDE&#160;INVESTMENT OR&#160;FINANCIAL&#160;ADVICE,&#160;AND&#160;CREDIT RATINGS&#160;AND MOODY’S&#160;PUBLICATIONS&#160;ARE&#160;NOT AND DO NOT PROVIDE&#160;RECOMMENDATIONS&#160;TO&#160;</b></p> <p style="position:absolute;top:233px;left:61px;white-space:nowrap" class="ft078"><b>PURCHASE,&#160;SELL,&#160;OR&#160;HOLD PARTICULAR&#160;SECURITIES.&#160;NEITHER&#160;CREDIT&#160;RATINGS&#160;NOR&#160;MOODY’S&#160;PUBLICATIONS&#160;COMMENT ON&#160;THE&#160;SUITABILITY&#160;OF AN&#160;</b></p> <p style="position:absolute;top:246px;left:61px;white-space:nowrap" class="ft078"><b>INVESTMENT FOR&#160;ANY&#160;PARTICULAR&#160;INVESTOR.&#160;MOODY’S&#160;ISSUES&#160;ITS&#160;CREDIT RATINGS&#160;AND&#160;PUBLISHES&#160;MOODY’S&#160;PUBLICATIONS&#160;WITH&#160;THE&#160;EXPECTATION&#160;AND&#160;</b></p> <p style="position:absolute;top:259px;left:61px;white-space:nowrap" class="ft078"><b>UNDERSTANDING&#160;THAT EACH&#160;INVESTOR&#160;WILL,&#160;WITH&#160;DUE&#160;CARE,&#160;MAKE&#160;ITS&#160;OWN&#160;STUDY&#160;AND EVALUATION&#160;OF EACH&#160;SECURITY&#160;THAT IS&#160;UNDER&#160;CONSIDERATION&#160;</b></p> <p style="position:absolute;top:272px;left:61px;white-space:nowrap" class="ft080"><b>FOR&#160;PURCHASE,&#160;HOLDING,&#160;OR&#160;SALE.&#160;&#160;<br/></b>MOODY’S&#160;CREDIT&#160;RATINGS&#160;AND&#160;MOODY’S&#160;PUBLICATIONS&#160;ARE NOT&#160;INTENDED&#160;FOR&#160;USE BY&#160;RETAIL INVESTORS&#160;AND&#160;IT&#160;WOULD&#160;BE&#160;RECKLESS&#160;AND&#160;INAPPROPRIATE FOR&#160;</p> <p style="position:absolute;top:302px;left:61px;white-space:nowrap" class="ft01">RETAIL INVESTORS&#160;TO&#160;USE MOODY’S&#160;CREDIT&#160;RATINGS&#160;OR MOODY’S&#160;PUBLICATIONS&#160;WHEN MAKING&#160;AN INVESTMENT&#160;DECISION.&#160;IF&#160;IN DOUBT&#160;YOU SHOULD&#160;CONTACT&#160;</p> <p style="position:absolute;top:315px;left:61px;white-space:nowrap" class="ft038">YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.&#160;<br/>ALL INFORMATION&#160;CONTAINED&#160;HEREIN IS&#160;PROTECTED&#160;BY&#160;LAW,&#160;INCLUDING&#160;BUT&#160;NOT&#160;LIMITED&#160;TO,&#160;COPYRIGHT&#160;LAW,&#160;AND&#160;NONE&#160;OF&#160;SUCH&#160;INFORMATION&#160;MAY&#160;BE&#160;COPIED&#160;</p> <p style="position:absolute;top:345px;left:61px;white-space:nowrap" class="ft01">OR OTHERWISE REPRODUCED,&#160;REPACKAGED,&#160;FURTHER TRANSMITTED,&#160;TRANSFERRED,&#160;DISSEMINATED,&#160;REDISTRIBUTED&#160;OR RESOLD,&#160;OR STORED&#160;FOR SUBSEQUENT&#160;USE FOR&#160;</p> <p style="position:absolute;top:358px;left:61px;white-space:nowrap" class="ft01">ANY&#160;SUCH&#160;PURPOSE,&#160;IN&#160;WHOLE OR IN&#160;PART,&#160;IN ANY&#160;FORM&#160;OR MANNER OR BY&#160;ANY&#160;MEANS&#160;WHATSOEVER,&#160;BY&#160;ANY&#160;PERSON&#160;WITHOUT&#160;MOODY’S&#160;PRIOR&#160;WRITTEN&#160;</p> <p style="position:absolute;top:371px;left:61px;white-space:nowrap" class="ft038">CONSENT.&#160;<br/>CREDIT&#160;RATINGS&#160;AND&#160;MOODY’S&#160;PUBLICATIONS&#160;ARE NOT&#160;INTENDED&#160;FOR USE BY&#160;ANY&#160;PERSON&#160;AS&#160;A&#160;BENCHMARK&#160;AS&#160;THAT&#160;TERM&#160;IS&#160;DEFINED&#160;FOR REGULATORY&#160;PURPOSES&#160;</p> <p style="position:absolute;top:401px;left:61px;white-space:nowrap" class="ft038">AND&#160;MUST&#160;NOT&#160;BE&#160;USED&#160;IN ANY&#160;WAY&#160;THAT&#160;COULD&#160;RESULT&#160;IN THEM&#160;BEING&#160;CONSIDERED&#160;A&#160;BENCHMARK.&#160;<br/>All&#160;information&#160;contained&#160;herein&#160;is&#160;obtained&#160;by&#160;MOODY’S&#160;from&#160;sources&#160;believed&#160;by&#160;it&#160;to&#160;be accurate&#160;and&#160;reliable. Because of&#160;the&#160;possibility of&#160;human or&#160;mechanical error&#160;as&#160;well as&#160;</p> <p style="position:absolute;top:431px;left:61px;white-space:nowrap" class="ft01">other&#160;factors,&#160;however,&#160;all&#160;information&#160;contained herein&#160;is&#160;provided “AS IS”&#160;without warranty&#160;of&#160;any&#160;kind.&#160;MOODY'S adopts all&#160;necessary&#160;measures so&#160;that the&#160;information&#160;it uses&#160;</p> <p style="position:absolute;top:444px;left:61px;white-space:nowrap" class="ft01">in&#160;assigning&#160;a&#160;credit&#160;rating&#160;is&#160;of&#160;sufficient&#160;quality&#160;and&#160;from&#160;sources&#160;MOODY'S&#160;considers&#160;to&#160;be reliable including, when&#160;appropriate, independent&#160;third-party&#160;sources. However,&#160;</p> <p style="position:absolute;top:457px;left:61px;white-space:nowrap" class="ft038">MOODY’S&#160;is&#160;not&#160;an&#160;auditor&#160;and&#160;cannot&#160;in every instance&#160;independently verify or&#160;validate&#160;information received&#160;in&#160;the&#160;rating process&#160;or&#160;in&#160;preparing&#160;the&#160;Moody’s&#160;publications.&#160;&#160;<br/>To&#160;the&#160;extent permitted by&#160;law,&#160;MOODY’S and&#160;its&#160;directors,&#160;officers,&#160;employees,&#160;agents,&#160;representatives,&#160;licensors and suppliers&#160;disclaim&#160;liability&#160;to&#160;any person or&#160;entity&#160;for&#160;any&#160;</p> <p style="position:absolute;top:487px;left:61px;white-space:nowrap" class="ft01">indirect,&#160;special,&#160;consequential,&#160;or&#160;incidental losses&#160;or&#160;damages&#160;whatsoever&#160;arising from or&#160;in connection with&#160;the&#160;information contained&#160;herein or&#160;the&#160;use&#160;of&#160;or&#160;inability&#160;to&#160;use&#160;any&#160;</p> <p style="position:absolute;top:500px;left:61px;white-space:nowrap" class="ft01">such&#160;information, even&#160;if&#160;MOODY’S&#160;or&#160;any&#160;of&#160;its&#160;directors, officers, employees, agents, representatives, licensors or&#160;suppliers is advised in&#160;advance&#160;of&#160;the&#160;possibility&#160;of&#160;such&#160;losses&#160;</p> <p style="position:absolute;top:513px;left:61px;white-space:nowrap" class="ft01">or&#160;damages,&#160;including but&#160;not&#160;limited&#160;to:&#160;(a)&#160;any loss&#160;of&#160;present&#160;or&#160;prospective&#160;profits&#160;or&#160;(b)&#160;any loss&#160;or&#160;damage&#160;arising&#160;where&#160;the&#160;relevant financial&#160;instrument is not the&#160;subject&#160;of&#160;</p> <p style="position:absolute;top:526px;left:61px;white-space:nowrap" class="ft038">a&#160;particular&#160;credit rating&#160;assigned&#160;by&#160;MOODY’S.&#160;<br/>To&#160;the&#160;extent permitted by&#160;law,&#160;MOODY’S and&#160;its&#160;directors,&#160;officers,&#160;employees,&#160;agents,&#160;representatives,&#160;licensors and suppliers&#160;disclaim&#160;liability for&#160;any direct&#160;or&#160;compensatory&#160;</p> <p style="position:absolute;top:556px;left:61px;white-space:nowrap" class="ft01">losses or&#160;damages caused to&#160;any person&#160;or&#160;entity,&#160;including&#160;but&#160;not&#160;limited&#160;to&#160;by any negligence&#160;(but&#160;excluding&#160;fraud,&#160;willful misconduct&#160;or&#160;any other&#160;type&#160;of&#160;liability&#160;that,&#160;for&#160;the&#160;</p> <p style="position:absolute;top:569px;left:61px;white-space:nowrap" class="ft01">avoidance&#160;of&#160;doubt,&#160;by law cannot&#160;be&#160;excluded)&#160;on&#160;the&#160;part&#160;of,&#160;or&#160;any contingency within&#160;or&#160;beyond&#160;the control&#160;of, MOODY’S&#160;or&#160;any&#160;of&#160;its&#160;directors, officers, employees, agents,&#160;</p> <p style="position:absolute;top:581px;left:61px;white-space:nowrap" class="ft038">representatives,&#160;licensors&#160;or&#160;suppliers,&#160;arising&#160;from&#160;or&#160;in&#160;connection&#160;with&#160;the&#160;information&#160;contained&#160;herein&#160;or&#160;the&#160;use&#160;of&#160;or&#160;inability to&#160;use&#160;any&#160;such&#160;information.&#160;<br/>NO&#160;WARRANTY,&#160;EXPRESS&#160;OR IMPLIED,&#160;AS&#160;TO&#160;THE ACCURACY,&#160;TIMELINESS,&#160;COMPLETENESS,&#160;MERCHANTABILITY&#160;OR FITNESS&#160;FOR ANY&#160;PARTICULAR PURPOSE OF&#160;ANY&#160;</p> <p style="position:absolute;top:612px;left:61px;white-space:nowrap" class="ft038">CREDIT&#160;RATING&#160;OR&#160;OTHER OPINION&#160;OR INFORMATION&#160;IS&#160;GIVEN OR MADE BY&#160;MOODY’S&#160;IN ANY&#160;FORM&#160;OR MANNER WHATSOEVER.&#160;<br/>Moody’s <org>Investors Service, Inc.</org>, a&#160;wholly-owned credit rating&#160;agency&#160;subsidiary&#160;of&#160;Moody’s Corporation&#160;(“MCO”),&#160;hereby&#160;discloses&#160;that most&#160;issuers of&#160;debt&#160;securities (including&#160;</p> <p style="position:absolute;top:642px;left:61px;white-space:nowrap" class="ft01">corporate&#160;and municipal&#160;bonds,&#160;debentures,&#160;notes and&#160;commercial&#160;paper)&#160;and preferred stock&#160;rated&#160;by&#160;Moody’s&#160;<org>Investors&#160;Service, Inc.</org> have, prior&#160;to&#160;assignment&#160;of&#160;any&#160;rating,&#160;</p> <p style="position:absolute;top:655px;left:61px;white-space:nowrap" class="ft01">agreed to&#160;pay&#160;to&#160;Moody’s <org>Investors Service,&#160;Inc</org>.&#160;for&#160;ratings opinions and services&#160;rendered by&#160;it&#160;fees ranging&#160;from&#160;<money>$1,000</money>&#160;to&#160;approximately&#160;<money>$2,700,000</money>.&#160;MCO&#160;and&#160;MIS&#160;also&#160;</p> <p style="position:absolute;top:668px;left:61px;white-space:nowrap" class="ft01">maintain policies and procedures to&#160;address the&#160;independence&#160;of&#160;MIS’s ratings and rating&#160;processes.&#160;Information&#160;regarding&#160;certain&#160;affiliations that may&#160;exist between&#160;directors of&#160;</p> <p style="position:absolute;top:681px;left:61px;white-space:nowrap" class="ft01">MCO&#160;and rated entities,&#160;and between&#160;entities&#160;who&#160;hold ratings from&#160;MIS and&#160;have&#160;also&#160;publicly&#160;reported to&#160;the&#160;SEC&#160;an&#160;ownership&#160;interest in&#160;MCO&#160;of&#160;more&#160;than&#160;5%,&#160;is posted&#160;</p> <p style="position:absolute;top:693px;left:61px;white-space:nowrap" class="ft01">annually a<a href="http://www.moodys.com/">t&#160;</a></p> <p style="position:absolute;top:693px;left:113px;white-space:nowrap" class="ft079"><a href="http://www.moodys.com/"><a href="http://www.moodys.com">www.moodys.com</a></a></p> <p style="position:absolute;top:693px;left:197px;white-space:nowrap" class="ft01"><a href="http://www.moodys.com/">&#160;u</a>nder&#160;the&#160;heading&#160;“Investor&#160;Relations&#160;—&#160;Corporate Governance&#160;—&#160;Director&#160;and&#160;Shareholder&#160;Affiliation&#160;Policy.”&#160;</p> <p style="position:absolute;top:711px;left:61px;white-space:nowrap" class="ft01">Additional&#160;terms&#160;for&#160;Australia&#160;only:&#160;Any&#160;publication&#160;into&#160;Australia&#160;of&#160;this document is pursuant&#160;to&#160;the&#160;Australian&#160;Financial&#160;Services License&#160;of&#160;MOODY’S affiliate,&#160;Moody’s Investors&#160;</p> <p style="position:absolute;top:724px;left:61px;white-space:nowrap" class="ft01">Service&#160;Pty&#160;Limited&#160;ABN&#160;61&#160;003&#160;399&#160;657AFSL&#160;336969&#160;and/or&#160;Moody’s Analytics Australia&#160;Pty&#160;Ltd ABN&#160;94 105&#160;136&#160;972&#160;AFSL&#160;383569&#160;(as applicable).&#160;This document is&#160;intended&#160;to&#160;</p> <p style="position:absolute;top:736px;left:61px;white-space:nowrap" class="ft01">be&#160;provided&#160;only to&#160;“wholesale&#160;clients”&#160;within the&#160;meaning&#160;of&#160;section 761G&#160;of&#160;the&#160;Corporations&#160;Act&#160;2001.&#160;By continuing&#160;to&#160;access this document from&#160;within&#160;Australia,&#160;you&#160;</p> <p style="position:absolute;top:749px;left:61px;white-space:nowrap" class="ft01">represent to&#160;MOODY’S that&#160;you&#160;are,&#160;or&#160;are&#160;accessing&#160;the&#160;document as a&#160;representative&#160;of,&#160;a&#160;“wholesale&#160;client”&#160;and that&#160;neither&#160;you&#160;nor&#160;the&#160;entity&#160;you&#160;represent&#160;will&#160;directly or&#160;</p> <p style="position:absolute;top:762px;left:61px;white-space:nowrap" class="ft01">indirectly&#160;disseminate&#160;this&#160;document or&#160;its contents&#160;to&#160;“retail&#160;clients”&#160;within&#160;the&#160;meaning&#160;of&#160;section&#160;761G&#160;of&#160;the&#160;Corporations Act 2001.&#160;MOODY’S credit&#160;rating&#160;is an&#160;opinion&#160;as to&#160;</p> <p style="position:absolute;top:775px;left:61px;white-space:nowrap" class="ft038">the&#160;creditworthiness&#160;of&#160;a&#160;debt obligation&#160;of&#160;the&#160;issuer,&#160;not on&#160;the&#160;equity&#160;securities of&#160;the&#160;issuer&#160;or&#160;any&#160;form&#160;of&#160;security&#160;that is available&#160;to&#160;retail&#160;investors.&#160;<br/>Additional terms&#160;for&#160;Japan only:&#160;Moody's&#160;Japan K.K.&#160;(“MJKK”)&#160;is&#160;a&#160;wholly-owned&#160;credit&#160;rating&#160;agency&#160;subsidiary&#160;of&#160;Moody's&#160;Group&#160;Japan&#160;G.K.,&#160;which&#160;is&#160;wholly-owned by&#160;Moody’s&#160;</p> <p style="position:absolute;top:805px;left:61px;white-space:nowrap" class="ft01">Overseas&#160;Holdings&#160;Inc.,&#160;a&#160;wholly-owned subsidiary&#160;of&#160;MCO.&#160;Moody’s SF&#160;Japan&#160;K.K.&#160;(“MSFJ”) is&#160;a&#160;wholly-owned&#160;credit&#160;rating agency&#160;subsidiary of&#160;MJKK.&#160;MSFJ&#160;is&#160;not&#160;a&#160;Nationally&#160;</p> <p style="position:absolute;top:818px;left:61px;white-space:nowrap" class="ft01">Recognized Statistical&#160;Rating&#160;Organization&#160;(“NRSRO”).&#160;Therefore,&#160;credit ratings&#160;assigned by&#160;MSFJ&#160;are&#160;Non-NRSRO&#160;Credit Ratings.&#160;Non-NRSRO&#160;Credit&#160;Ratings&#160;are&#160;assigned&#160;by an&#160;</p> <p style="position:absolute;top:831px;left:61px;white-space:nowrap" class="ft01">entity&#160;that is&#160;not a&#160;NRSRO&#160;and,&#160;consequently,&#160;the&#160;rated obligation&#160;will&#160;not qualify&#160;for&#160;certain&#160;types&#160;of&#160;treatment under&#160;U.S.&#160;laws. MJKK&#160;and&#160;MSFJ&#160;are credit&#160;rating&#160;agencies&#160;</p> <p style="position:absolute;top:844px;left:61px;white-space:nowrap" class="ft038">registered&#160;with&#160;the&#160;Japan&#160;Financial&#160;Services Agency&#160;and&#160;their&#160;registration&#160;numbers are&#160;FSA Commissioner&#160;(Ratings)&#160;No.&#160;2&#160;and 3&#160;respectively.&#160;<br/>MJKK&#160;or&#160;MSFJ&#160;(as applicable)&#160;hereby&#160;disclose&#160;that most issuers of&#160;debt securities&#160;(including&#160;corporate&#160;and municipal&#160;bonds,&#160;debentures, notes&#160;and&#160;commercial&#160;paper)&#160;and&#160;preferred&#160;</p> <p style="position:absolute;top:874px;left:61px;white-space:nowrap" class="ft01">stock&#160;rated&#160;by&#160;MJKK&#160;or&#160;MSFJ&#160;(as&#160;applicable)&#160;have,&#160;prior&#160;to&#160;assignment&#160;of&#160;any&#160;rating,&#160;agreed&#160;to&#160;pay&#160;to&#160;MJKK&#160;or&#160;MSFJ&#160;(as&#160;applicable)&#160;for&#160;ratings opinions and services rendered by&#160;its&#160;</p> <p style="position:absolute;top:887px;left:61px;white-space:nowrap" class="ft038">fees&#160;ranging&#160;from&#160;<money>JPY125,000</money> to&#160;approximately&#160;<money>JPY250,000,000</money>.&#160;<br/>MJKK&#160;and&#160;MSFJ&#160;also&#160;maintain&#160;policies and procedures to&#160;address Japanese&#160;regulatory&#160;requirements.&#160;<br/>For&#160;Publications Issued by&#160;Moody’s <org>Capital&#160;Markets Research,&#160;Inc</org>.&#160;only:&#160;<br/>The&#160;statements contained in&#160;this research&#160;report are&#160;based&#160;solely&#160;upon&#160;the&#160;opinions of&#160;Moody’s <org>Capital&#160;Markets Research,&#160;Inc</org>.&#160;and the&#160;data&#160;and information&#160;available&#160;to&#160;the&#160;</p> <p style="position:absolute;top:952px;left:61px;white-space:nowrap" class="ft038">authors at the&#160;time&#160;of&#160;publication&#160;of&#160;this report.&#160;There&#160;is no&#160;assurance&#160;that any&#160;predicted results will&#160;actually&#160;occur.&#160;Past&#160;performance&#160;is no&#160;guarantee&#160;of&#160;future&#160;results.&#160;<br/>The&#160;analysis&#160;in&#160;this report has not been&#160;made&#160;available&#160;to&#160;any&#160;issuer&#160;prior&#160;to&#160;publication.&#160;<br/>When&#160;making&#160;an&#160;investment&#160;decision,&#160;investors should use&#160;additional&#160;sources of&#160;information&#160;and consult&#160;with&#160;their&#160;investment&#160;advisor.&#160;Investing&#160;in&#160;securities&#160;involves&#160;certain&#160;risks&#160;</p> <p style="position:absolute;top:1000px;left:61px;white-space:nowrap" class="ft038">including possible&#160;fluctuations&#160;in investment&#160;return and&#160;loss&#160;of&#160;principal.&#160;Investing in bonds&#160;presents&#160;additional risks,&#160;including&#160;changes in&#160;interest rates and&#160;credit risk.&#160;<br/><org>Moody's&#160;Capital&#160;Markets&#160;Research, Inc.</org>, is&#160;a&#160;subsidiary&#160;of&#160;MCO. Please note&#160;that Moody’s Analytics,&#160;Inc.,&#160;an&#160;affiliate&#160;of&#160;Moody’s <org>Capital&#160;Markets Research,&#160;Inc</org>.&#160;and a&#160;subsidiary&#160;of&#160;</p> <p style="position:absolute;top:1030px;left:61px;white-space:nowrap" class="ft01">MCO,&#160;provides&#160;a wide&#160;range&#160;of&#160;research&#160;and&#160;analytical&#160;products&#160;and&#160;services&#160;to&#160;corporations&#160;and&#160;participants&#160;in&#160;the&#160;financial&#160;markets. Customers&#160;of&#160;Moody’s Analytics,&#160;Inc.&#160;may&#160;</p> <p style="position:absolute;top:1043px;left:61px;white-space:nowrap" class="ft01">include&#160;companies&#160;mentioned in&#160;this&#160;report.&#160;Please&#160;be&#160;advised that a&#160;conflict&#160;may&#160;exist and that any&#160;investment&#160;decisions you&#160;make&#160;are&#160;your&#160;own responsibility.&#160;The&#160;Moody’s&#160;</p> <p style="position:absolute;top:1055px;left:61px;white-space:nowrap" class="ft01">Analytics logo&#160;is&#160;used on&#160;certain&#160;Moody’s <org>Capital&#160;Markets Research,&#160;Inc</org>.&#160;products&#160;for&#160;marketing&#160;purposes only.&#160;Moody’s&#160;Analytics,&#160;Inc.&#160;is a&#160;separate&#160;company&#160;from&#160;Moody’s Capital&#160;</p> <p style="position:absolute;top:1068px;left:61px;white-space:nowrap" class="ft01"><org>Markets&#160;Research, Inc.</org>&#160;</p> </div> </body> </html>