Investment Grade Loan Market

Market Commentary: The domestic market plugged along in May andJune, while keeping a wary eye on developments in Europe. Mostbankers anticipate an eventual impact in the investment grade loanmarket, but no tangible evidence has appeared that the market istightening. Both Wal-Mart (A2/AA) and Walt Disney (A2/A) recentlywrapped large transactions: Disney tapped the market with a $2.25billion 5-year revolver, refinancing a like-sized 3-year deal from 2010;the Facility fee was reduced from 17.5 bps to 7.0 bps, and the CDS-based floors and caps were tightened. Wal-Mart rolled its $10 billion364-day and $1.84 billion L/C facilities with no change in pricingfrom 2011. Energy holding company Integrys Energy Group completed$1 billion in revolving credit facilities. U.S. Bank and Bank of TokyoMitsubishi led the deal that refinanced existing debt. On the M&A front,Eaton Corp (A3/A-, negative outlook/pending acquisition) put in place a$6.75 billion bridge commitment to finance the cash portion of itsacquisition of Cooper Industries. Investment grade loan volume was justover $370 billion in the first half of 2011, according to ThomsonReuters LPC data. Year-to-date 2012, however, the volume ofinvestment grade deals both completed and in process is tracking at amodest $250 billion. Pricing has remained relatively flat, as has beenthe case for the last six months.

This information represents the opinion of U.S. Bancorp and is not intended to be a forecast of future events, a guarantee of future results or investment advice. It is not intended toprovide specific advice or to be construed as an offering of securities or recommendation to invest. The factual information provided has been obtained from sources believed to bereliable, but is not guaranteed as to accuracy or completeness. This report is intended for institutional investors only. Please send an email to andrew.hensel@usbank.com if youwish to be removed from the mailing list for this document.

Mid-Corporate Loan Market

Noteworthy Deal:Automatic Data Processing, Inc.Business ServicesAaa (s) / AAA (s)

Automatic Data Processing wrapped a $3.5 billion revolver that will refinance existing debt. The facility comprises a $2 billion,364-day revolver and a $1.5 billion, 5-year tranche. The loans are refinancing an existing $2 billion, 364-day revolver due June2012 and a $1.5 billion, 3-year revolver due 2013. Pricing on the 364-day facility opens at 1.75 bps undrawn. Drawn pricing is 40percent of the 5-year CDX, with a floor of 20 bps. Pricing on the 5-year tranche opens at 4 bps undrawn. Drawn pricing is 40percent of the 5-year CDX, with a floor of 30 bps. The 5-year revolver pays a flat 1.5 bps upfront fee.

U.S. Bank Loan Capital Markets – Market SnapshotJune 25, 2012Peter Kline 312-325-8983 Richard Jones 312-325-8906 Kavian Boots 312-325-8723Daniel Chapman 877-673-2258 Jeffrey Duncan 704-335-4570 Michael Mahoney 314-418-2661

Market Commentary: Pricing in the mid-corporate space has generally remainedunchanged since 4Q11, and the recent level of issuance has been low. Very strongrefinancing activity in 2011 and continued weakness in corporate M&A activity haveresulted in relatively few deals coming to market, even two months prior to the traditionalmid-summer slowdown. Those few companies that are coming to market now have beenable to lever the lack of deal flow to add structural enhancements to their deals,including, as seen in the Noteworthy Deal below, leverage covenant step-ups forpermitted acquisitions of size. As previously noted, bank groups are generally smallerthan when most deals were last reset, and there has been an increase in the number ofjoint bookrunners in most deals. Upfront fees continue to tighten overall, and feedifferentials by tier continue to be compressed.

Noteworthy Deal:Ocean Transportation Company

The new facility for this ocean transportation company consists of a 5-year $375 million unsecured revolving credit priced atL+150 drawn and 25 bps undrawn at the > 2.0x and < 2.5x level of their new pricing grid. The deal refinances and enlarges theCompany's existing 5-year $125 million revolver (priced at L+125 drawn and 15 bps undrawn at the same grid level), which hadbeen set to mature in August 2016. Leverage covenants include step-up provisions after the purchase or construction of newvessels as well as a permitted acquisition above a specified size. The Company is an active user of both long term fixed rateprivate placement and bank debt.

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L everage Unused Fee (bps) A l l - In Drawn (bps)

>3.0 35-45 200-250

<3.0 30-40 175-225

<2.5 25-35 150-200

<2.0 20-27.5 125-175

<1.5 15-22.5 100-150

Indica tive Mid-Corporate Gra de Pricing Grid

Source: U.S. Bank Nat ional Associat ion. Note: Pricing grid considers indicat ive pricing for t radit ional commercial and corporate borrowers (i.e., non-sponsored and non-leveraged) with EBITDA in excess of $50mm.

Tradit ional Gr idRating 364-day Mult i -year Drawn* Floor* Cap*

AA 2-5 4-7.5 62.5-75 10-15 75-100

A+ 4-6 6-8 75-87.5 25-30 87.5-112.5

A 5-7.5 7.5-10 87.5-100 30-35 100-125

A- N/A 10-15 100-125 N/A N/A

BBB+ N/A 12.5-17.5 112.5-125 N/A N/A

BBB N/A 15-22.5 125-150 N/A N/A

BBB- N/A 22.5-30 150-175 N/A N/A

BB+ N/A 30-37.5 175-200 N/A N/ASource: U.S. Bank National Associat ion * Spread to LIBORThis grid is subject to change and is indicat ive in nature only.

Indicative Corporate Investment Grade Pricing Grid

Undrawn Cost (bps) Drawn Cost (bps)

CDS-Based Gr id

This information represents the opinion of U.S. Bancorp and is not intended to be a forecast of future events, a guarantee of future results or investment advice. It is not intended toprovide specific advice or to be construed as an offering of securities or recommendation to invest. The factual information provided has been obtained from sources believed to bereliable, but is not guaranteed as to accuracy or completeness. This report is intended for institutional investors only. Please send an email to andrew.hensel@usbank.com if you wishto be removed from the mailing list for this document.

Leveraged Loan Market

Asset Based Finance Market

Market Commentary: The asset-based financing market continues to be relatively quiet inthe second quarter. New deals announced recently include the merger of candy companiesFerrara Pan and Farley’s & Sathers ($125mm ABL revolver), GS Capital and P2 Capital’sLBO of Interline Brands ($250mm ABL revolver), and Clayton, Dubilier & Rice’s LBO ofRoofing Supply Group ($175mm ABL revolver). Recently there has been push back in theinstitutional and high yield market for dividend recaps. In late May, CVC Capital pulled anamendment to its ABL facility to allow for a shareholder distribution for its portfoliocompany Univar because of unattractive terms offered in the institutional term loan andhigh yield market, and Harbor Freight Tools decreased the size of its dividend as a part of arecapitalization (See deal summary below).

Noteworthy Deal:Harbor Freight ToolsDiscount Tool StoresCarmarillo, California B+/B1 Sr. Debt

Harbor Freight Tools has completed a dividend recapitalization with a new $400 million 5-year ABL revolver alongside a new$750 million institutional TLB. The first time ABL revolver was well received and oversubscribed at L+175 drawn and 37.5 bpsundrawn. The company was last in the market in 2010 with a $750 million TLB and $25 million revolver also to support adividend recap. In early May 2012, the company was in the market with a $1.0 billion TLB, but because of tightening marketconditions and the opportunistic nature of the financing, the offering size was reduced to $750 million, tenor was shortenedfrom 7 years to 5.5 years, and pricing increased from the initial talk of L+400 to L+425 (although OID stayed at 99 and theLIBOR floor at 1.25%).

U.S. Bank Loan Capital Markets – Market SnapshotJune 25, 2012Peter Kline 312-325-8983 Richard Jones 312-325-8906 Kavian Boots 312-325-8723Daniel Chapman 877-673-2258 Jeffrey Duncan 704-335-4570 Michael Mahoney 314-418-3571

Market Commentary: Leveraged loan volume continued to slow in May and intoJune. With some deals finding clearing levels, arrangers pushed new business –primarily tied to M&A – into the market. The market got a shot in the arm withthe completion of another big underwrite: the M&A deal backing Zayo Group’s(B/B2) $2.2 billion acquisition of AboveNet. Eurozone concerns in recent weekshave pushed up pricing; spreads for the trailing 30 days ended June 21st arewell over 100 bps higher than they were at the beginning of the year, but thishas not killed demand. The starting point for price talk on new issues,particularly those in the middle-market space, has moved to L+500-525, with aLIBOR floor and a 99 OID. Structures and leverage multiples, however, haveremained firm -- at least to this point.

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U.S. Bank was Joint Book Runner and Joint Lead Arranger on a new $125 million senior secured set of facilities for a leadingIllinois-based communications and media company. The $40 million revolver and $85 million term loan, both 5-year facilities,were used to refinance existing debt in a moderately leveraged company for its industry. Pricing on the deal, which closed earlierin June, was L+275 and was strongly received in the market.

1.25% LIBOR floor and a 99 OID. Structures and leverage multiples, however, have remained firm -- at least to this point. Deal flow does remain thin andcould certainly use an additional helping of M&A. Overall, leveraged loan pricing as of June 21st widened considerably from levels seen in April. The BB/BB-and B+/B indices came in at 5.60% and 7.21%, respectively, from 4.85% and 6.48%, respectively, in April.

Noteworthy Deal:Communications / Media

Ratings Dec-11 Mar-12 Apr -12 Jun-12

BB/BB- 4.43% 4.55% 4.85% 5.60%

B+/B 7.20% 6.12% 6.48% 7.21%

Indica tive Levera ged PricingAverage New-Issue Pricing (YTM)

Source: Standard & Poor's LCD

L IBOR Spreads

Credit Fundamentals <$125mm > $125mm

Strong/Stable 150 - 200 175 - 225

Story Credits 225 – 275 250 - 300

to usage of the facility.

Indica tive Asset Ba sed Pricing Grid

Deal Size

Undrawn pricing typically ranges from 37.5 to 50.0 bps, with a grid that is

U.S. Bank Debt Capital Markets – Market SnapshotJune 25, 2012Terry Martin 646-935-4581 Violet Grecu 877-673-2289 David Wood 312-325-8745Michael Dullaghan 612-336-7629 Amanda Lamberti 314-325-2025

Private Placements MarketMarket Commentary: Private Placement Market issuance activity continues ata strong pace. During the month of May, there was $3.9 billion in issuance,following a softer $2.5 billion of volume in April. With the recent decline in U.S.Treasury yields to all-time record lows in recent weeks, June is off to a verystrong start and has already seen $3.5 billion in volume month-to-date. WhileU.S. Treasuries have declined as much as 50 bps since May, credit spreads haveonly modestly gapped out, allowing issuers to take advantage of tighter spreadsand near record low all-in coupons. To take advantage of these coupons, manyissuers have recently issued privates with delayed funding options to lock-intoday’s attractive rates up to 9 months prior to their actual financing needs.Given the recent decline in coupons, many investors have expressed apreference for 7-year or longer tenors in an effort to capture incremental yieldand meet minimum yield hurdles.

Investment Products and Services are available through U.S. Bancorp Investments, Inc., member of FINRA and SIPC, an investment advisor, a brokerage subsidiary of U.S. Bancorp,and an affiliate of U.S. Bank. U.S. Bank is not responsible for and does not guarantee the products, services, or performance of it affiliates and third party providers. This informationrepresents the opinion of U.S. Bancorp and is not intended to be a forecast of future events, a guarantee of future results or investment advice. It is not intended to provide specificadvice or to be construed as an offering of securities or recommendation to invest. The factual information provided has been obtained from sources believed to be reliable, but is notguaranteed as to accuracy or completeness. This report is intended for institutional investors only.

Public Debt Market

Not a Deposit ● Not FDIC Insured ● Not Guaranteed by the Bank ● May Lose Value ● Not Insured by any Federal Government Agency

High Grade Market Commentary (for the week ended June 22nd) Heading into the week, most market participants weren't exactly sure what to expect giventhe Greek elections over the weekend and the FOMC meeting in the middle of the week. Nevertheless, in a broader context the build-up in anticipationseemed a little overdone as the aftermath of the results were rather subdued. Favorable elections out of Greece only produced a brief reprieve fromEurozone jitters, as fresh data from Spain's central bank reignited talk of contagion risk and helped push Spanish and Italian yields deep into territory that iswidely viewed as unsustainable. Although the Fed expanded Operation Twist by $267 billion through year end and displayed a willingness to act whenappropriate, the broader markets reaction could almost be described as trivial. Moreover, with Italian Prime Minister Mario Monti describing next week's EUsummit as a "defining moment", this past week's events have already become an afterthought.

Undeterred by all of this background "noise,” the new issue market caught some serious momentum and more than surpassed market expectations for theweek. Over $22 billion in new issues priced in a week which most thought would be largely marred by market-moving headlines. The large influx of volumepriced this week is undoubtedly notable, but the most significant takeaway has been the market’s receptivity. What we have seen out of this week'stransactions are essentially the same technical aspects that have prevailed in the new issue market for quite some time. The depth of demand forinvestment grade corporates has proven extremely resilient to the point where this week's deals on average have come flat to secondaries and books havebeen more than 4x oversubscribed. While we have witnessed new issue concessions compress, secondary spreads have also moved in the same direction.High quality paper remains extremely well-bid while deals that have come this week continue to perform well in the secondary market.

In addition to the FOMC meeting on Wednesday, rumors started circulating on Thursday that Moody's long awaited downgrades of the big banks would beannounced that afternoon. After months of "review" and market speculation the downgrades were released and came in line with expectations, if not slightlybetter for some. This led to a strong rally in bank/finance paper today with Morgan Stanley and Goldman Sachs outperforming others (20-30 bps tighter onthe day), as market participants are clearly relieved this event is now in the past. Given the lack of surprises out of Moody's, we wouldn’t be surprised to seesome bank issuance next week as many of the serial issuers have been on the sidelines awaiting the Moody's release. We anticipate next week to be activeagain, with estimates wrapped around $15 billion as issuers will look to sneak in supply prior to July 4th week, which is historically slow, and given that theholiday falls on a Wednesday, we feel it will be extremely quiet that week.

High Yield Market Commentary (for the week ended June 22nd) It was another slow week in the high yield new issue market. Three deals priced for justover $2 billion in volume. This is the sixth week in a row that we have seen volume at levels below the year-to-date weekly average. June's volume nowstands at just over $4 billion, less than a quarter of what we have seen in each of the first five months of the year. The volume booster of the week was a$1.5 billion deal for Ally Financial (B1/B+), formerly GMAC. Despite the ratings, the deal was structured similar to an investment grade deal and marketed toboth investment grade and high yield investors. We also had one deal pulled from the market. Engility Corp (B2/BB-), which had been expected to raise$250 million 7-year non-call 3-year notes is now considering alternative financings. Proceeds were expected to fund a distribution to L-3 communications aspart of its spin-off. There is currently one deal in the pipeline for next week. WideOpenWest Finance is expected to price $1+ billion of senior notes to helpfund its acquisition of Knology Inc.

We closed out Thursday at an average spread of +652 and an average yield-to-maturity of 7.85%. Funds flows were positive again this week, with $1.197 billion in inflows. This is the second week of inflows following four weeks of heavy outflows. Year-to-date the market has seen over $12 billion of inflows.

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Noteworthy Deal: Utilities

U.S. Bancorp is serving as Joint Lead Placement Agent on $100 million of aggregate senior secured notes for two nuclear fuel trustcompanies. The two issues are being marketed to investors simultaneously. Both issues include 5-year bullet tranches. Thenuclear fuel trusts are repeat issuers in the Private Placement Market and have existing NAIC 2 rating designations in place.

NAIC

Rating5-Year (bps) 7-Year (bps) 10-Year (bps)

1 150-200 150-200 130-200

2 200-275 225-300 225-300

450-600 500-675 525-675

(if available) (if available) (if available)

Priva te Placement Spreads to U.S. Treasury

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Source: Private Placement M onitor (as of M ay 2012)

Please note that actual pricing will be sector and issuer specif ic. Given this and the market ’s volatility; drast ic spread changes could occur at anyt ime. Please contact Terry M art in at (646) 935-4581 to review and discuss potent ial individual basis.

Not a Deposit ● Not FDIC Insured ● Not Guaranteed by the Bank ● May Lose Value ● Not Insured by any Federal Government Agency

Public Debt Market – Recent High Grade New Issues

Investment Products and Services are available through U.S. Bancorp Investments, Inc., member of FINRA and SIPC, an investment advisor, a brokerage subsidiary of U.S. Bancorp,and an affiliate of U.S. Bank. U.S. Bank is not responsible for and does not guarantee the products, services, or performance of it affiliates and third party providers. This informationrepresents the opinion of U.S. Bancorp and is not intended to be a forecast of future events, a guarantee of future results or investment advice. It is not intended to provide specificadvice or to be construed as an offering of securities or recommendation to invest. The factual information provided has been obtained from sources believed to be reliable, but is notguaranteed as to accuracy or completeness. This report is intended for institutional investors only.

U.S. Bank Debt Capital Markets – Market SnapshotJune 25, 2012Terry Martin 646-935-4581 Violet Grecu 877-673-2289 David Wood 312-325-8745Michael Dullaghan 612-336-7629 Amanda Lamberti 314-325-2025

*Shaded transactions represent those in which U.S. Bank played a role.Source: Bloomberg

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Date Issuer Industry YKE / DMS Amount Securities Maturity Coupon Price Yield Spread Mdy S&P

6/22/2012 Choice Hotels Real Estate Domestic $400.0 Senior Notes 5/15/2022 5.750% 100.000 5.750% 409 Baa3 BB

6/21/2012 Odebrecht Finance Ltd Finance Yankee $600.0 Senior Notes 6/26/2022 5.200% 99.421 5.200% 356 Baa3 BBB-

6/21/2012 Odebrecht Finance Ltd Finance Yankee $400.0 Senior Notes 6/26/2042 7.250% 98.479 7.250% 455.7 Baa3 BBB-

6/21/2012 Caterpillar Inc Industrial Domestic $500.0 Senior Notes 6/26/2015 0.950% 99.979 0.957% 55 A2 A

6/21/2012 Caterpillar Inc Industrial Domestic $500.0 Senior Notes 6/26/2017 1.500% 99.880 1.525% 80 A2 A

6/21/2012 Caterpillar Inc Industrial Domestic $500.0 Senior Notes 6/26/2022 2.600% 99.581 2.648% 103 A2 A

6/21/2012 Total Capital International Energy Yankee $1,500.0 Senior Notes 6/28/2017 1.550% 99.813 1.589% 87.5 Aa1 AA-

6/21/2012 BGC Partners Inc Finance Domestic $100.0 Senior Notes 6/15/2042 8.125% 100.000 8.125% Ba1 BBB-

6/21/2012 Target Corp Retail Domestic $1,500.0 Senior Notes 7/1/2042 4.000% 97.890 4.125% 145 A2 A+

6/21/2012 Packaging Corp of America Industrial Domestic $400.0 Senior Notes 6/15/2022 3.900% 99.911 3.911% 230 Baa3 BBB

6/21/2012 Alleghany Corp Insurance Domestic $400.0 Senior Notes 6/27/2022 4.950% 99.898 4.963% 335 Baa2 BBB

6/21/2012 3M Industrial Domestic $650.0 Senior Notes 6/26/2017 1.000% 99.539 1.095% 37 Aa2 AA-

6/21/2012 3M Industrial Domestic $600.0 Senior Notes 6/26/2022 2.000% 98.515 2.166% 55 Aa2 AA-

6/21/2012 Pioneer Natural Resources Co Energy Yankee $600.0 Senior Notes 7/15/2022 3.950% 99.440 4.018% 240 Baa3 BBB-

6/21/2012 Western Gas Partners Energy Yankee $520.0 Senior Notes 7/1/2022 4.000% 99.194 4.099% 250 Baa3 BB+

6/21/2012 BioMed Realty LP Real Estate Domestic $250.0 Senior Notes 7/15/2022 4.250% 99.126 4.358% 275 Baa3 BBB-

6/20/2012 BRF-Brasil Foods SA (re-open) Food & Bev Yankee $250.0 Senior Notes 6/6/2022 5.875% 102.839 5.500% 385.3 Baa3 BBB-

6/20/2012 Wells Fargo & Co Bank Domestic $2,000.0 Senior Notes 7/1/2015 1.500% 99.804 1.567% 115 A2 A+

6/20/2012 Wells Fargo & Co Bank Domestic $750.0 Senior Notes 6/26/2015 3mL+92 100.000 3mL+92 92 A2 A+

6/19/2012 George Washington University University Domestic $168.0 Senior Notes 9/15/2017 1.827% 100.000 1.827% 112.5 A1 A

6/19/2012 American Honda Finance Finance Domestic $500.0 Senior Notes 6/25/2014 3mL+40 100.000 3mL+40 40 A1 A+

6/19/2012 Delmarva Pow er and Light Co Utility Domestic $250.0 FMB's 6/1/2042 4.000% 99.449 4.032% 130 A3 A

6/19/2012 British Telecommunications PLC Telecom Yankee $500.0 Senior Notes 12/20/2013 3mL+112.5 100.000 3mL+112.5 112.5 Baa2 BBB

6/19/2012 British Telecommunications PLC Telecom Yankee $750.0 Senior Notes 6/22/2015 2.000% 99.986 2.005% 162.5 Baa2 BBB

6/19/2012 National Bank of Canada Bank Yankee $1,000.0 Senior Notes 6/26/2015 1.500% 99.758 1.583% 120 Aa2 A

6/19/2012 Petroleos Mexicanos Energy Yankee $1,750.0 Senior Notes 6/27/2044 5.500% 99.552 5.530% 280 Baa1 BBB

6/19/2012 New field Exploration Energy Domestic $1,000.0 Senior Notes 5/15/2022 5.625% 100.000 5.625% 400.7 Ba1 BBB-

6/19/2012 Occidental Petroleum Energy Domestic $500.0 Senior Notes 2/15/2018 1.500% 99.918 1.515% 80 A1 A

6/19/2012 Occidental Petroleum Energy Domestic $1,250.0 Senior Notes 2/15/2023 2.700% 99.739 2.728% 110 A1 A

6/19/2012 CubeSmart LP Real Estate Domestic $250.0 Senior Notes 7/15/2022 4.800% 99.855 4.818% 320 Baa3 BBB-

6/19/2012 DDR Corp Real Estate Domestic $300.0 Senior Notes 7/15/2022 4.625% 98.104 4.865% 325 Baa3 BB+

6/19/2012 Detroit Edison Company Utility Domestic $250.0 FMB's 6/15/2022 2.650% 99.844 2.668% 105 A2 A

6/19/2012 Detroit Edison Company Utility Domestic $250.0 FMB's 6/15/2042 3.950% 99.565 3.975% 125 A2 A

6/18/2012 Korea Exchange Bank Bank Yankee $700.0 Senior Notes 6/26/2017 3.125% 99.455 3.244% 255 A2 A-

6/18/2012 BAA Funding Ltd Finance Yankee $500.0 Sr. Secured 6/25/2015 2.500% 99.928 2.525% 215 NR A-

6/18/2012 TCF Financial Corp Bank Domestic $150.0 Pfd Shares Perp 7.500% 25.000 7.500% NR BB+

6/18/2012 Russian Agricultural Bank Bank Yankee $500.0 Senior Notes 12/27/2017 5.298% 100.000 5.298% MS+425 Baa1 NR