As we continue to operate in a fast-moving, highly competitive market for lenders and investors in loans, understanding and staying current on trends in structure and documentation, as well as regulatory developments, has become an increasingly important and necessary competitive advantage. Topics covered in this presentation include: •State of the Loan Market •State of the CLO Market •Risk Retention •Industry/LSTA Update •Bankruptcy Update

1. © 2015 Winston & Strawn LLP
Winston & Strawn Loan and
CLO Market Update
June 10, 2015

2. © 2015 Winston & Strawn LLP
Today’s Speakers
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Jai S. Khanna
Corporate Partner
Chicago
+1 (312) 558-6357
jkhanna@winston.com
Kevin M. Ryan
Corporate Partner
Chicago
+1 (312) 558-7482
kryan@winston.com
Felton E. Parrish
Corporate Partner
Charlotte
+1 (704) 350-7820
fparrish@winston.com
Timothy J. Dable
Corporate Partner
Chicago
+1 (312) 558-6369
tdable@winston.com
James A. Snyder
Corporate Partner
Chicago
+1 (312) 558-5271
jsnyder@winston.com
Michael T. Mullins
Corporate Partner
Chicago
+1 (312) 558-7568
mmullins@winston.com

3. © 2015 Winston & Strawn LLP
Agenda
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State of the CLO Market
Cash Flow Loan Update
Asset Based Loan Update
LSTA Update
Bankruptcy Update

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State of the CLO Market

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CLO Market Update
• Recent History
• Current Market Trends and Outlook
• Obstacles: Past and Present
• Volcker Rule
• Risk Retention
• Loan Supply / Pricing Arbitrage
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CLO Market Update
• European Risk Retention
• What are managers doing now?
• “Hold periods” for retention holders/originator
• US Risk Retention
• What are managers doing now?
• Refinancings
• Majority Owned Affiliate
• Leverage
• Voting rights
• Making deals work for both US and EU risk retention
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Loan Market Update

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Cash Flow
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Overview
• Thin deal flow
• Reasons?
• Impact
• Leveraged lending guidance
• Large cap space
• Mid-market space
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Impact on Documentation
• Increased borrower sway over process generally
• Further loosening of deal terms
• Continued evolution of "sponsor technology"
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Players in the Market
• Existing names expanding, including into new markets
and considering new industries
• Lots of new names and platforms in the MM space
• Questions surrounding pending transactions
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Alternative Structures and Approaches
• Interest in seeking to gain any toehold to increase market
share
• First Out / Last Out and Unitranche
• First Lien / Second Lien
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Asset Based

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General Overview
• Similar issues surrounding deal flow as in Cash Flow
space
• More frequent use of precedent documents or provisions
• Sponsor desire to match existing terms of portfolio
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ABL Deal Specific Terms
• Reserves – creeping past general permitted discretion
• Financial Covenant/Equity Cure – increased frequency of
cure rights
• Cash Dominion Spring – extension of trigger event
• Payment Conditions – creation of sub categories and
combinations within standard requirements
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Alternate Approaches to Enhanced Availability
• Eligible equipment or fixed asset components
• Stretch portion on eligible accounts and/or eligible
inventory
• Eligible accounts of foreign subsidiaries
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LSTA Update

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LSTA Update
• Model Credit Agreement Provisions
• Disqualified Lender Lists
• LSTA approach generally followed in marketplace
• But with case-by-case negotiated deviations
• DQ list only provided to Agent not lenders
• Assignments to DQed lenders null and void
• Expansion of borrower ability to update list
• LSTA Market Advisory– deviations upset delicate balance
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19. © 2015 Winston & Strawn LLP
Bankruptcy Update

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Bankruptcy Update
• In re MPM Silicones, LLC – the worst of all worlds:
• Claim for make-whole payment denied;
• Plan confirmed that provided for below market interest rate to
secured lenders; and,
• Claims against second lienholders for breach of intercreditor
agreement dismissed.
• Unitranche Issues:
• In RadioShack bankruptcy, court interpreted and enforced
Agreement Among Lenders (AAL).
• There was no express ruling as to enforceability of AAL in
bankruptcy, but decision does provide some comfort.
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21. © 2015 Winston & Strawn LLP
Questions?
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22. © 2015 Winston & Strawn LLP
Speakers
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Jai S. Khanna
Corporate Partner
Chicago
+1 (312) 558-6357
jkhanna@winston.com
Kevin M. Ryan
Corporate Partner
Chicago
+1 (312) 558-7482
kryan@winston.com
Felton E. Parrish
Corporate Partner
Charlotte
+1 (704) 350-7820
fparrish@winston.com
Timothy J. Dable
Corporate Partner
Chicago
+1 (312) 558-6369
tdable@winston.com
James A. Snyder
Corporate Partner
Chicago
+1 (312) 558-5271
jsnyder@winston.com
Michael T. Mullins
Corporate Partner
Chicago
+1 (312) 558-7568
mmullins@winston.com

23. © 2015 Winston & Strawn LLP
Thank You