…Expect to see similar trends during the balance of 2015.

Sources: S&P LCD, TM Capital

…M&A and pro rata activity remained relatively strong while opportunistic and institutional volume lagged…

• New-issue volume was $112.3 billion during Q3 2015, including $67 billion of institutional tranches, down from

$140.2 billion/$85.3 billion during Q2 2015 and $133.6 billion/$92.1 billion during Q3 2014

• Second-lien volume grew to a one-year high of $4.3 billion during Q3 from $3.4 billion during Q2

• Rising share of higher quality paper – loans rated at least BB- or Ba3 remained elevated at 37% of total during Q3

• S&P/LSTA Index of loans outstanding expanded by $13.9 billion, or 1.7% during YTD 2015, a significant decline

from 2014 which had expanded $149 billion, or 22%

– Downshift reflects falling institutional volume and a sharp rise in loan repayments, largely from corporate M&A

• High-yield market was impacted by volatility in the capital markets, uncertainty around rate increases and

weakness in the energy sector

– With prices down and clearing yields up, volume fell to a 3.75-year low of $39.8 billion during Q3, from $94.1

billion in Q2 and $68.9 billion through 3Q in 2014

• CLO formation dropped to $77.6 billion during YTD 2015, from $93.4 billion during YTD 2014

• Many of the themes seen during 1H15 continued into Q3

• Shift from institutional to pro rata financing – pro rata facilities accounted for 40% of new-issue paper in the Q3

– Pro rata volume fell to $45.3 billion in Q3, from $54.8 billion in Q2, but it exceeded Q2 2014 total of $41.5

billion

• M&A related loan activity climbed to a one-year high of $82.6 billion during Q3, up from $60.1 billion during Q2

• LBO loan volume increased modestly to $20.5 billion during Q3, up from $19.3 billion during Q2 and $16.9 billion

during Q3 2014

• Traditional banker-led M&A loan market continues to face headwinds due to historically high purchase price

multiples and regulatory pressures

• Private-equity-backed issuers accounted for 43.4% of new leveraged loan volume during YTD 2015 (and 46.9%

during Q3) down from 2014’s multiyear high of 54.5% and marking the lowest reading since 2009

• Add-on activity dropped to $9.2 billion during Q3 from $17.7 billion during Q2 and $12.1 billion during Q3 2014

• Falling opportunistic volume during Q3 – significant downshift in refinancing/recap volume this year

Leveraged Lending Market ReportQuarterly Commentary

Q3 2015

Leveraged loan volume declined in Q3 versus Q2 and year-over-year…

• Q4 volume expected to continue at moderate pace set during Q3

– Leverage lending guidelines will continue to impact LBO and recap activity

– Technical conditions, while solid, are far from the levels generally associated with strong refinancing and

repricing activity

– Weakness in the high-yield market is expected to put downward pressure on leveraged M&A activity

• If the current pace continues through year-end, new-issue activity will gain some ground on 2014

Key Themes

Sources: S&P LCD, CapitalIQ, TM Capital

• High-yield spreads have been surging – Energy sector (roughly 15% of total HY market)

impacted significantly by depressed oil prices• The issues facing the junk bond market could cause

problems in the economy and the rest of the markets – Issues in the bond market could cause tighter bank

lending – Trend toward conservatism results in less bank

liquidity available for businesses• Tighter financial conditions could make it less likely that the

Federal Reserve will increase interest rates

High-Yield Market Showing Signs of Disruption

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

Jul-2015 Aug-2015 Sep-2015 Oct-2015

Merrill Lynch High Yield Master II Constrained (Total Return) Index

Barclays High Yield Energy Index

High-Yield Market Indices Performance

• Middle market M&A and financing conditions remain favorable despite market volatility and uncertainty

• We are still seeing aggressive bidders and lenders on a variety of transactions

• Uncertain how long the current attractive deal environment will persist

• Corporate issuers should be proactive about managing liquidity

• Market continues to be frothy for borrowers, though benign workout environment could end abruptly if the economy weakens

Observations from the Front Line

LBO Purchase Price Multiples – Middle Market

1850

1900

1950

2000

2050

2100

2150

Jul-2015 Aug-2015 Sep-2015 Oct-2015

4.1x5.4x

3.6x 2.6x 3.3x 3.8x 3.8x 4.5x 5.1x 5.1x 5.8x

0.6x0.4x

0.9x0.7x

1.0x 0.6x 0.8x 0.1x0.1x 0.3x

0.1x3.3x3.4x

3.8x3.4x

4.1x 3.7x 3.3x 4.1x4.3x 5.3x

6.2x8.1x

9.3x8.3x

6.6x

8.4x 8.2x 7.9x8.8x

9.6x10.7x

12.1x

—

2x

4x

6x

8x

10x

12x

14x

2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q-3Q15

3Q15

Senior Debt/EBITDA Sub Debt/EBITDA Equity/EBITDA Others

S&P500 Index

Significant Market Volatility During Q3 Amidst Uncertainty

• Slowing global growth – primary concern being China’s economy and the Shanghai exchange downturn

• Greek debt crisis and arduous negotiations with creditors• Uncertainty around Federal Reserve policy regarding

tightening given market volatility, low inflation rate and global economy risks due to China’s slowdown

• While there has clearly been significant volatility in the markets, it has been more muted in loans than for high-yield bonds

2015 Sep 2015 SepSep Aug Jul Jun 2014 Sep Aug Jul Jun 2014

Indices Commodities10-Year Treasury 2.06% 2.21% 2.20% 2.35% 2.52% Crude Oil $45.09 $49.20 $47.12 $59.47 $91.16DJIA 16,285 16,528 17,690 17,620 17,043 Natural Gas $2.52 $2.69 $2.72 $2.83 $4.12S&P 500 1,920 1,972 2,104 2,063 1,972 Gold $1,115 $1,132 $1,095 $1,172 $1,212NASDAQ 4,620 4,777 5,128 4,987 4,493iShares HY Corporate Bond Fund 82.8 85.8 87.8 88.7 91.0 CurrenciesiShares Barclays Aggregate 109.5 108.9 109.4 108.8 109.0 GBP in USD $1.51 $1.54 $1.56 $1.57 $1.62

Bond Index EUR in USD $1.12 $1.12 $1.10 $1.11 $1.26Total Return*10-Year Treasury 1.31% (0.24%) 2.66% (1.35%) (1.24%) USD in JPY 119.74 121.30 123.88 122.30 109.70DJIA 1.51% (6.20%) (0.31%) (2.22%) (0.23%) USD in CNY 6.36 6.38 6.21 6.20 6.14S&P 500 0.49% (6.03%) 1.37% (2.15%) (1.40%)NASDAQ (0.27%) (6.70%) 2.33% (1.82%) (1.82%) Average New-Issue Pricing - B+/BiShares HY Corporate Bond Fund (2.68%) (1.52%) (0.51%) (2.05%) (1.98%) Total Spread 542.0 484.6 501.8 489.0 520.6iShares Barclays Aggregate 0.51% (0.34%) 1.12% (0.80%) 2.51% YTM 5.72% 5.13% 5.30% 5.21% 5.43%

Bond Index

Leveraged Lending Market ReportOctober 2015

Key Market Indicators

Sources: S&P LCD, Bloomberg, TM Capital

New-Issue Loan Volume by Month Default Rates of Leveraged Loans

$22 $30

$15

$34

$22

$38

$48 $42

$50

$63

$15

$36

—$10$20$30$40$50$60$70

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2014 2015Institutional Pro Rata

($ in billions)

1.27%

—

2%

4%

6%

8%

10%

12%

Average Debt Multiples of Highly Leveraged Loans (% of Total) LBO Purchase Price Multiples - All (% of Total)

53%57%

45%39%

48% 52% 56% 59% 59% 54% 53% 54%

36%36%

44%

49%45% 42% 40% 39%

40% 42% 43%45%

8.4x

9.7x9.1x

7.7x8.5x 8.8x 8.7x 8.8x

9.7x 10.1x 10.3x11.2x

—

2x

4x

6x

8x

10x

12x

2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q152Q153Q15

Senior Debt/EBITDA Sub Debt/EBITDA Equity/EBITDA Others

83% 81% 82% 77% 82% 75% 80% 85% 73% 77% 75% 79%

11% 11% 9% 13% 11%9% 13% 8%

6% 9% 8% 10%

5% 7% 7% 9% 5%13% 7% 6% 21% 11% 13% 7%

4.9x 5.1x 5.2x 5.2x 5.2x 5.1x 4.9x 4.8x5.0x 5.0x 5.1x

4.7x

—

1x

2x

3x

4x

5x

6x

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2014 2015

77% 82% 75% 80% 85% 73% 77% 75% 79% 82% 72% 75%

13% 11%9% 13% 8%

6% 9% 8% 10%12%

12% 15%9% 5%

13% 7% 6% 21% 11% 13% 7%6% 13% 9%

5.2x 5.2x 5.1x 4.9x 4.8x 5.0x 5.0x 5.1x4.7x 5.0x 5.1x 5.1x

—

1x

2x

3x

4x

5x

6x

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2015

FLD / EBITDA SLD / EBITDA

Other Sr Debt / EBITDA Sub Debt / EBITDA

53%57%

45%39%

48% 52% 56% 59% 59% 54% 53%

36%36%

44%

49%45% 42% 40% 39%

40% 42% 43%

8.4x

9.7x9.1x

7.7x8.5x 8.8x 8.7x 8.8x

9.7x 10.1x 10.3x

—

2x

4x

6x

8x

10x

12x

2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 2Q15

(6%)

(4%)

(2%)

—

2%

4%

—

20

40

60

80

100

120

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug Sep

2012 2013 2014 2015

Consumer Confidence % Change in Disposable Income

(50%)

(40%)

(30%)

(20%)

(10%)

—

10%

20%

30%

Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

S&P GSCI Agriculture Index S&P GSCI All Metals Index

S&P GSCI Energy Index Dow Jones FXCM Dollar Index

0.3%

2.1%

2.9%

—

1%

2%

3%

4%

Jan-14 Jul-14 Jan-15 Jul-15

1 Mon 10 Yr 30 Yr

—

10

20

30

40

50

(10%)

(5%)

—

5%

10%

15%

20%

25%

Sep-14 Nov-14 Jan-15 Mar-15 Jun-15 Aug-15

Volatility (VIX)Mar

ket I

ndic

es

S&P 500 NASDAQ VIX

www.tmcapital.com

New York641 Lexington Avenue30th FloorNew York, NY 10022Tel: 212.809.1360

Boston201 Washington Street32nd FloorBoston, MA 02108Tel: 617.259.2200

Atlanta3575 Piedmont Rd NE Suite 1010Atlanta, GA 30305 Tel: 404.995.6230

TM Capital’s Leveraged Finance ContactsRecent TM Capital Financing Experience

Jerome Romano Managing Director

jromano@tmcapital.com 617-259-2206

Robert Grien Managing Director

rgrien@tmcapital.com 212-809-1434

Stock Market Indices U.S. Treasury Yields

Commodities Prices U.S. Trade Deficit & Dollar Index

$100

$105

$110

$115

$120

$125

—

$50

$100

$150

$200

$250

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

2014 2015

U.S. D

ollar Index

Trad

e D

olla

rs in

Bill

ions

Series1 Series2 Series3

(50%)

(40%)

(30%)

(20%)

(10%)

—

10%

20%

30%

Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

S&P GSCI Agriculture Index S&P GSCI All Metals Index

S&P GSCI Energy Index Dow Jones FXCM Dollar IndexConsumer Confidence Index & % Change in DPI Housing Starts & Mortgage Rates

—

2%

4%

6%

8%

—

500

1,000

1,500

2,000

Aug-2007 Aug-2009 Aug-2011 Aug-2013 Aug-2015

Housing Starts 30 Year Fixed Mortgage Rate

Sources: S&P LCD, Capital IQ, US Census Bureau, TM Capital

$95

$100

$105

$110

$115

$120

$50

$100

$150

$200

$250

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

2014 2015

U.S. D

ollar Index

Trad

e D

olla

rs in

Bill

ions

Exports Imports Nominal Broad Dollar Index