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European High Yield – Rich Pickings?Mike Della VedovaT. Rowe Price European High Yield Portfolio ManagerCitywire – Montreu...
Common Misconceptions About European High Yield                   Common Misconceptions                                   ...
Fixed Income At T. Rowe Price    141 Fixed Income Professionals    As of 31 Mar 2012                                      ...
T. Rowe Price European High Yield Bond Strategy                                                              European High...
T. Rowe Price European High Yield Bond Strategy                  Investment Approach                                      ...
What We Look For In An Investment Opportunity    As market conditions improve…      A better fundamental picture today ver...
How We Uncover Investment Opportunities                                     e                                             ...
T. Rowe Price Funds SICAV – European High Yield Bond Fund:    Country Diversification    Using different T. Rowe Price per...
T. Rowe Price Funds SICAV – European High Yield Bond Fund:    Industry Diversification    Using different T. Rowe Price pe...
A Good Investment Opportunity: Ziggo     Profile:                                                                         ...
Why Choose European High Yield                     1) Increasingly Significant Market                                     ...
Why Choose European High Yield At T. Rowe Price                             History                                       ...
Appendix
Fixed Income Research At T. Rowe PriceAs of 31 March 2012  HEAD OF FIXED INCOME CREDIT RESEARCH                           ...
T. Rowe Price Funds SICAV – European High Yield Bond Fund     Portfolio Characteristics     As of 31 March 2012           ...
T. Rowe Price Funds SICAV – European High Yield Bond Fund     Portfolio Credit Quality1 And Top 10 Issues2     As of 31 Ma...
T. Rowe Price Funds SICAV – European High Yield Bond Fund:     Performance     As of 31 March 2012     Performance (NAV, t...
Fee Schedule     T. Rowe Price Funds SICAV — European High Yield Bond Fund     As of 31 March 2012     Figures Shown in Eu...
Additional Information     This document has been issued by T. Rowe Price International Ltd (“TRPIL”), 60 Queen Victoria S...
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  1. 1. European High Yield – Rich Pickings?Mike Della VedovaT. Rowe Price European High Yield Portfolio ManagerCitywire – Montreux, May 2012
  2. 2. Common Misconceptions About European High Yield Common Misconceptions RealityIt is a small market, representing only 10% of the US High Actually represents 28% of US High Yield market1Yield marketMost issuances are by small, privately owned companies 57% of the market is issued by public companiesPrimarily used for aggressive LBOs 72% in 2011 was for refinancing1 The top 6 sectors represent 54% of the market (similar toDominated by a single industry the US)2Euro-centric issuance focus Global market Annualised Return %3 1 Year 3 Year 10 YearReturns are not sufficient enough to justify the risks this BofA Merrill Lynch Europeanasset class poses Currency High Yield Constrained 6.45 24.02 8.73 (Excl. Subordinated Financials)4 Active in European High Yield market since 1999T. Rowe Price has limited European High Yield experience Dedicated European High Yield SICAV since 2011 European High Yield issuers you may recognize Ford Levis Manchester United Renault General Motors Continental Virgin Media Swissport 1 Source: Credit Suisse 2 Source: BofA European High Yield excluding subordinated financials vs. JP Morgan Global High Yield top 6 sectors (46%) 3 As at 31st March 2012 4 Hedged to Euro2
  3. 3. Fixed Income At T. Rowe Price 141 Fixed Income Professionals As of 31 Mar 2012 Number of Professionals Figures Shown in U.S. Dollars Portfolio Managers 24 Fixed Income Profile Portfolio Managers/Analysts 5 1 Established 1971—$145.7 billion fixed income Associate Portfolio Managers 2 assets under management Credit Analysts 42 Diversified range of strategies supported by broad sector expertise Economists 2 Seasoned portfolio management team supported by Traders 22 deep research resources Trading Assistants 9 Portfolio management and credit research teams Quantitative Analysts and Strategists 22 average 22 years2 and 12 years3 of investment experience, respectively Portfolio Specialists 4 Management 3 High Yield Profile Other 6 5 High Yield portfolio managers Total Fixed Income Professionals 141 14 High Yield analysts4 5 dedicated High Yield traders A strong franchise supported by a large investment platform 1 Total fixed income assets under management of the T. Rowe Price group of companies. The T. Rowe Price group of companies includes T. Rowe Price Associates, Inc., T. Rowe Price International Ltd, T. Rowe Price Hong Kong Limited, T. Rowe Price Singapore Private Ltd., and T. Rowe Price (Canada), Inc. 2 The portfolio management team average is composed of portfolio managers and associate portfolio managers. 3 The credit research team average is composed of portfolio managers/analysts and credit analysts. 4 Of the 19 High Yield portfolio managers and analysts, 3 are combined portfolio managers/analysts.3
  4. 4. T. Rowe Price European High Yield Bond Strategy European High Yield Team Portfolio Manager – Mike Della Vedova 2 credit analysts with coverage of European High Yield credit opportunities Dedicated High Yield trading desks in both London and US Supported by a Global High Yield team of 24 investment professionals Portfolio Manager: Strategy History Mike Della Vedova 18 years of investment experience European High Yield has been utilised by T. Rowe Price in its funds since 1999 14 years of experience in A dedicated European High Yield SICAV was launched in September 2011 European High Yield market The market has reached a level of depth and maturity which T. Rowe Price’s Joined T. Rowe Price in 2009 skill set can capitalise upon for clients4
  5. 5. T. Rowe Price European High Yield Bond Strategy Investment Approach Portfolio Construction The Fund’s objective is to maximise total return At least 80% of assets invested in securities through a diversified portfolio of High Yield corporate denominated in European currencies—mainly the euro bonds denominated in European currencies. and the pound. Invests in sound companies within industries expected to outperform. Up to 20% of assets invested in other currencies, including US dollar High Yield and investment-grade Invests in European currencies on a global basis. corporate bonds. Focuses on: Investment-grade exposure is limited to 20% of assets. Quantitative and qualitative fundamental research that drives an independent credit rating. Currency exposure is fully hedged back to the euro. Long-term balance sheet and external rating Target excess return: 100–150 basis points. improvements. Strict risk-management practices. Target tracking error: 300–400 basis points. Benchmark BofA Merrill Lynch European Currency High Yield Constrained Excluding Subordinated Financials Index (Hedged to EUR)5
  6. 6. What We Look For In An Investment Opportunity As market conditions improve… A better fundamental picture today versus 2008 European corporate management have markedly improve their leverage profile relative to 2008 A “wall of maturities” is a European High Yield market now has a higher wall of opportunities average rating than in 2008 European corporations now undertaking more conservative and sustainable financing than in 2008 Improving European High Yield Corporate ...companies with these characteristics Fundamentals (2008 vs. 2011/2012) Source: JP Morgan appear attractive: 2008 2011 2012E Quality company in a strong performing sector/industry Net debt/Adj. EBITDA 3.9x 3.3x 2.9x Accessible and knowledgeable management team Free cash flow, euro million -35 192 255 Strong and achievable business plan EBITDA margin 13.2% 13.6% 13.9% Deleveraging Adj. EBITDA/Interest Generating cash 3.8x 4.4x 4.9x expense6
  7. 7. How We Uncover Investment Opportunities e European iv M ct ac Perspective pe ro rs Pe Pe rs n pe ig re ct ve iv e So European High Yield Strategy: A broadly diversified portfolio with 70-150 securities Emerging US chosen through careful fundamental Market Perspective and detailed credit analysis by Perspective eliminating illiquid, unattractive securities from a universe of 1,200 Issuers e In iv ve ct pe Pe stm rs rs en Pe pe t G ct ra iv d ity id e e Equity Different perspectives qu Li Perspective give T. Rowe Price an advantage7
  8. 8. T. Rowe Price Funds SICAV – European High Yield Bond Fund: Country Diversification Using different T. Rowe Price perspectives… …helps shape the portfolio Geographic Diversification As of 31st March 2012 Fund vs. BofA Merrill Lynch European Currency High Yield European Perspective Constrained Excluding Subordinated Financials Index Hedged to EUR % of Fund 5.2 US Perspective United Kingdom Germany 18.9 16.2 0.5 Luxembourg 12.0 5.8 5.0 Macro Perspective United States France 11.9 8.7 -6.1 Netherlands 7.2 1.9 Sovereign Perspective Poland Italy 5.1 4.2 -3.6 3.9 Ireland 3.6 0.1 Belgium 2.2 1.7 Emerging Market Denmark 1.9 1.1 Perspective Czech Republic 1.9 1.2 Sweden 1.8 0.8 Switzerland 1.4 0.2 Spain 1.4 -1.2 Total 98.4 Underweight France: Overweight United Kingdom: Large concentration of fallen angels Strength of the local economy Near-term austerity concerns and strength of Bankruptcy regimes the local economy Examples: Manchester United, Virgin Media Examples: Peugeot, Pages Jaunes The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for the SICAV sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable. The securities mentioned above comprised 4.09% of the Fund as of 31st March 2012.8
  9. 9. T. Rowe Price Funds SICAV – European High Yield Bond Fund: Industry Diversification Using different T. Rowe Price perspectives… …helps shape the portfolio Industry Diversification (Top 15)1 As of 31st March 2012 European Perspective Fund vs. BofA Merrill Lynch European Currency High Yield Constrained Excluding Subordinated % of Fund Investment Grade Financials Index Hedged to EUR Perspective Container 11.3 6.3 Cable Operators 11.0 3.3 Wireless Communications 8.7 6.1 Equity Perspective Automotives 7.9 -8.0 -3.4 Financial 7.8 Healthcare 7.8 3.1 Macro Perspective Building Products 7.0 -1.8 Chemicals 5.5 1.6 Gaming 4.2 1.8 US Perspective Consumer Products 4.0 3.1 Entertainment & Leisure 3.9 3.0 Emerging Market Broadcasting Food/Tobacco 3.3 3.1 0.2 1.5 Perspective Information Technology 2.8 -2.1 1.1 Services 1.9 Subtotal 90.3 Underweight Automotives: Overweight Cable Operators: Weakening industry outlook Transparent Most are fallen angels Robust and cash-generating business models Examples: Peugeot, Fiat Country by country 1 Based on TRP industry classifications Examples: UPC, Ziggo The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for the SICAV sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable. The securities mentioned above comprised 9.05% of the Fund as of 31st March 2012.9
  10. 10. A Good Investment Opportunity: Ziggo Profile: Ziggo 400 7.00 Lead cable TV operator in the Netherlands Leverage (Net Debt / EBITDA) 350 6.00 Free Cash Flow (€ in MMs) Covers 55% of the country 300 5.00 More than 8.8m customers 250 1 4.00 Market Cap of €4.75bn 200 3.00 150 European Perspective 100 2.00 50 1.00 Equity Perspective 0 0.00 2008 2009 2 0 10 2 0 11 2 0 12 E Macro Perspective FCF Net Total Leverage Sovereign Perspective Company characteristics: Investment Grade Quality company in a strong performing Perspective sector/industry Accessible and knowledgeable management team US Perspective Strong and achievable business plan Emerging Market Deleveraging Perspective Generating cash 1As at 30th April 2012 As at 31st March 2012, Ziggo represented 2.97% of the T. Rowe Price Funds SICAV - European High Yield Fund. The security identified and described is intended to illustrate our buy discipline and does not represent all of the securities purchased for the SICAV sub-fund. No assumptions should be made that the security identified and discussed was or will be profitable. To further illustrate our buy discipline, a complete list of purchases of securities in the SICAV sub-fund during the past year is available upon request, subject to applicable law. A complete list of sales of securities in the SICAV sub-fund during the past year is also available upon request, subject to applicable law.10
  11. 11. Why Choose European High Yield 1) Increasingly Significant Market 2) Structural Growth of the Market Relative size of European High Yield market versus US European High Yield and Institutional Leveraged High Yield market (1994 – 31 Mar 2012) Loans (Dec 1999 – Dec 2011) Percent € Billion 30 400 European Inst it utional Leverage Loan M arket Size CAGR: 6% European High Yield M arket Size 20 300 200 CAGR: 32% 10 100 0 0 F 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 Source: Credit Suisse Source: Credit Suisse 3) Market Diversification 4) Attractive Valuations European High Yield market composition European High Yield Spread and Yield to Maturity 12 Automotives Yield to Maturity: 10 7.43% 8 Finanical All Other 6 Spread 4 6.38% Building Products 2 Cable Operators 1.05% 0 Heatlhcare Cont ainer 31 M arch 2012 Source: BofA Merrill Lynch Indices: European Currency High Yield Source: BofA Merrill Lynch European Currency High Yield Constrained Excluding Subordinated Financials as of 31 Mar 2012. Constrained Excluding Subordinated Financials Index.11
  12. 12. Why Choose European High Yield At T. Rowe Price History Philosophy Experienced investors in Global High Yield Superior long-term returns, with below-market volatility through: Active in European High Yield since 1999 Proprietary fundamental research Investing primarily in BB and B rated securities, with the SICAV Global High Yield Bond Fund launched in 2001 ability to invest in lower-quality High Yield bonds when compelling valuation opportunities arise Dedicated European High Yield SICAV launched in 2011 Adherence to strict risk management practices Team Process Highly tenured and experienced portfolio management Disciplined and consistent team – average 17 years of investment experience and 14 years with T. Rowe Price Holistic fundamental research as the foundation Dedicated European High Yield team since 2009 Collaborative approach – interaction between fixed income Portfolio manager, Mike Della Vedova has more than 14 and equity research analysts can provide a broad capital years of experience in European High Yield structure perspective and an information advantage Two credit analysts with coverage of European High Yield In-depth quantitative analysis – facilitates robust portfolio credit opportunities construction and effective risk management Support from dedicated High Yield trading desks in London and US12
  13. 13. Appendix
  14. 14. Fixed Income Research At T. Rowe PriceAs of 31 March 2012 HEAD OF FIXED INCOME CREDIT RESEARCH HEAD OF FIXED INCOME QUANTITATIVE RESEARCH Michael J. McGonigle Martin G. Lee CORPORATES EMERGING MARKETS HIGH YIELD MUNICIPAL SECURITIZED PRODUCTS QUANTITATIVE ANALYSISSteven E. Boothe, CFA1 Roy Adkins Jeffrey M. Anapolsky, J.D.3 Austin L. Applegate, CFA Alisa Fiumara-Yoch, CFA Anil Andhavarapu Richard Lin, CFACable, Media, Telecommunications Africa and Middle East Sovereign Distressed and Special Situations, Transportation CMBS, Structured Finance Quantitative Investment Analyst Quantitative Investment AnalystSteven G. Brooks, CFA2 Sheldon Chan Publishing R. Lee Arnold, CFA2 Jung M. Lieu Securitized Modeling & Analytics Credit Modeling & AnalyticsAerospace/Defense, Consumer Asian Corporates Jason A. Bauer, CFA Airlines, Life Care/Nursing, Structured Finance Christopher P. Brown, CFA2,6 Peggy Meckel3Products, Food, Beverage & Tobacco, Michael J. Conelius5 Broadcasting, Cable, Consumer Products, Real Estate, Tribal Gaming Theodore E. Robson, CFA4 Securitized Products Portfolio Investment AnalystLeisure, Manufacturing, Transportation Eastern Europe Sovereign Satellites, Telecommunications Patricia S. Deford CMBS Jason Collins, CFA3 High YieldMichael Lambe, CFA Carolyn Chu, CPA2 Andrew L. Cohen, CFA Housing, Life Care/Nursing, Evan S. Shay Portfolio Investment Analyst Christina Ni, FRM, CFAEuropean Energy, Automotives, Food & Tobacco, Solid Waste, Tobacco GSE Credit, Structured Finance Stable Value Quantitative Investment Analyst Asian CorporatesTelecommunications, Utilities Manufacturing, Restaurants, G. Richard Dent, J.D. Chris Copsey3 Securitized Modeling & Analytics Christopher J. Kushlis, CFA Susan G. Troll, CPA2Matthew Lawton Asia and Brazil Sovereign Supermarkets, Utilities Charter Schools, Education, Structured Finance Portfolio Investment Analyst Michael F. Reinartz, CFAHealth Care, Pharmaceuticals Michael F. Connelly, CFA Student Housing Global Portfolio Investment Strategist Christopher C. Loop, CFA2 Short-Term Bond & Stable ValueSamy B. Muaddi, CFA4 EMEA Corporates Services Charles E. Emrich Levent Demirekler, CFAGlobal Financials Michael Della Vedova1 General Obligations, Public Quantitative Investment Analyst Rebecca L. Setcavage Samy B. Muaddi, CFA4 Portfolio Investment AnalystAlex S. Obaza European High Yield Power, Transportation, Core Analytics Specialist Emerging Markets Banks Carson R. Dickson, CFA, CPA Water and Sewer Lucy Dwyer, CFA3 Core/Core PlusGlobal Insurance, Technology Michael D. Oh, CFAMiso Park, CFA Aerospace/Defense, Airlines, Kathryn A. Floyd, CFA Portfolio Investment Analyst Michael K. Sewell, CFA Latin America Sovereign Forest Products, Retail, Transportation General Obligations, Global Portfolio Investment AnalystEuropean Aerospace / Defense, Kenneth A. Orchard, CFA Stephen M. Finamore, CFA Hospitals, Water and Sewer Mike Fang MunicipalsEuropean Industrials & Services, Developed SovereignEuro Chemicals Entertainment & Leisure, Marcy M. Lash Quantitative Investment Analyst Scott D. Solomon Siby Thomas Multisector Portfolio Analytics Quantitative Investment AnalystTheodore E. Robson, CFA4 Financials, Health Care Hospitals Latin America Corporates Core/Core PlusBrokers, U.S. Money Center Banks, Justin T. Gerbereux, CFA1,2 Linda A. Murphy2 Jill HirschREITs Automotives General Obligations, Portfolio Investment Analyst Alexander StreyBrian M. Ropp, CPA Andrew P. Jamison, CFA, CPA Hotels/Conference Centers, Emerging Markets Portfolio Investment Analyst Water and Sewer Yongheon Lee, Ph.D. GlobalEnergy, U.S. Regional Banks Chemicals, Containers, EnergyKimberly A. Stokes Quantitative Investment Analyst Zhen Xia Paul M. Massaro, CFA1 Portfolio Investment AnalystElectric Utilities, Natural Gas Pipelines Wireless Communications Risk Models and Derivatives Analytics Peter D. Leiser, Jr. Investment Grade CorporatesRobert D. Thomas Jamie ShinEuropean Banks Manager, Core Analytics Benjamin T. Yeagle2 Wireless Telecommunications Greg A. Lewis, CPA3 Quantitative Investment StrategistLauren M. Wagandt Walter P. Stuart III, CFA Credit Modeling & AnalyticsChemicals, Paper, Metals & Mining, Building Products, Homebuilders, Portfolio Investment AnalystRetail High Yield Grace Zheng, Ph.D., FRM Metals & Mining, Technology Quantitative Investment AnalystHoward Woodward, CFA1 Michael J. Trivino Attribution & Credit ModelingGlobal Autos, European Consumer Gaming, Lodging, REITsProducts, European Retail David A. Yatzeck European High Yield Baltimore Associates London Associates 1 Also has portfolio management responsibilities Hong Kong Associate Team leader 69 Fixed Income Analysts worldwide7 2 3 Reports to other managers 4 Provides coverage in multiple areas 5 Portfolio Manager not counted as Research 6 Associate Portfolio Manager not counted as Research 7 Consists of 5 portfolio manager/analysts, 42 credit analysts, 22 quantitative analysts and strategists (including Martin G. Lee)14
  15. 15. T. Rowe Price Funds SICAV – European High Yield Bond Fund Portfolio Characteristics As of 31 March 2012 BofA Merrill Lynch European Currency High T. Rowe Price Funds SICAV – Yield Constrained Excluding Subordinated European High Yield Bond Fund Financials Index Average Quality B+ BB- Weighted Average Maturity 6.60 Years 4.10 Years Weighted Average Effective Duration1 4.13 Years 3.26 Years Yield to Maturity2 7.65% 7.43% Current Yield3 8.12% 7.41% Number of Issues 74 340 1 Weighted Average Effective Duration is a measure of a bond’s sensitivity to interest rates. 2 The calculation for yield to maturity includes coupon income and any capital gains or losses that would be realized by holding a bond to maturity. The timing of cash flows is considered, and it is assumed that coupon payments can be reinvested at an interest rate equal to the yield to maturity. Yield to maturity on an account is a weighted average of the yield to maturity on each bond held in the portfolio. 3 Current yield is calculated by dividing a bond’s annual coupon interest by its current market price. Current yield on an account is a weighted average of the current yield on each bond held in the portfolio. Source: BoA Merrill Lynch. All yields will vary and are not guaranteed.15
  16. 16. T. Rowe Price Funds SICAV – European High Yield Bond Fund Portfolio Credit Quality1 And Top 10 Issues2 As of 31 March 2012 % of Fund % of Index1 Holding Coupon Rate Maturity Industry BBB/BB Rated & Above 4.1% 0.6% Cable & Wireless Wireless 8.625 25/03/2019 International Finance Communications BB Rated 27.8 60.1 Cirsa Funding Luxembourg 8.750 15/05/2018 Gaming BB/B Rated 10.2 - Codere Finance Luxembourg 8.250 15/06/2015 Gaming B Rated 42.6 33.0 Conti-Gummi Finance BV 7.500 15/09/2017 Automotives B/CCC Rated 9.0 - GMAC International Finance BV 7.500 21/04/2015 Financials CCC & Below 2.6 6.3 Labco SAS 8.500 15/01/2018 Healthcare Not Rated 2.3 - Building Lafarge 6.750 16/12/2019 Products Equities 0.5 - Entertainment & Short Term 0.8 - MU Finance Plc 8.750 01/02/2017 Leisure Nordenia International AG 9.750 15/07/2017 Containers Total 100% 100% Unitymedia 9.625 01/12/2019 Cable Operators 1Sources: Moody’s Investors Service and Standard & Poor’s (S&P); split ratings (i.e., BB/B and B/CCC) are assigned when the Moody’s and S&P ratings differ. 2Top 10 issues account for 20.9% of portfolio Numbers may not total due to rounding. The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for the SICAV sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.16
  17. 17. T. Rowe Price Funds SICAV – European High Yield Bond Fund: Performance As of 31 March 2012 Performance (NAV, total return in base currency) Since Inception Inception One Month Three Months Fund Benchmark Date (%) (%) (%) (%) Class A 20 Sep 2011 0.54 9.56 12.30 14.08 Class I 20 Sep 2011 0.54 9.75 12.60 14.08 Benchmark The BofA Merrill Lynch European Currency 1.11 10.82 High Yield Constrained Excluding Subordinated Financials Index Hedged to EUR For performance calculation purposes, securities are valued with prices taken at the official NAV pricing time. Pricing sources may vary between the official NAV, the benchmark and the sub-manager. Fund shares are subject to investment risk, including possible loss of principal amount invested. Figures shown at NAV and include changes in principal value, reinvested dividends, and capital gain distributions. Investment return and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Past performance cannot guarantee future results. For availability of other classes of shares and their respective fees, expenses, and performance, please refer to the Prospectus or contact the Fund’s distributor17
  18. 18. Fee Schedule T. Rowe Price Funds SICAV — European High Yield Bond Fund As of 31 March 2012 Figures Shown in Euros Minimum Initial Minimum Sales Charge Investment Investment and Subsequent (up to) Management Fee Holding Amount1 Investment1 Class Z N/A €25,000,000 N/A 0 basis points2 Class S N/A €10,000,000 N/A 0 basis points3 (Category S & Sd) Class J N/A €10,000,000 N/A 0 basis points4 (Category J & Jd) Class I N/A €2,500,000 €100,000 60 basis points Class A 5.00% €15,000 €1,000 115 basis points (Category A & Ad) The fee schedule represents only the management fee of the SICAV sub-fund and excludes custodial and administrative fees. 1 In Euros. 2 All charges and operating and administrative expenses attributable to the ‘Z’ Class of shares will be borne by the Investment Manager. The ‘Z’ Class of shares is only available to institutional investors having a professional services arrangement with the Investment Manager. 3 No management fees are charged to the ‘S’ Class of shares. All other expenses attributable to the ‘S’ Class of shares will be borne by the Class. The ‘S’ Class of shares is only available to institutional investors having a professional services arrangement with the Investment Manager. 4 The fees attributable to the ‘J’ Class of shares, charged by the Administration Agent for its services, will be borne by the Investment Manager. All other expenses attributable to the ‘J’ Class of shares will be borne by the Class. The ‘J’ Class of shares are only available to institutional investors having a professional services arrangement with the Investment Manager. The European High Yield Bond is a sub-fund of the T. Rowe Price Funds SICAV, a Luxembourg domiciled société d’investissement à capitale variable (SICAV), which qualifies as an undertaking for collective investment in transferable securities (UCITS). Applications for shares of the fund can only be made on the basis of the current prospectus of the T. Rowe Price Funds SICAV together with the latest audited annual report (and, if published, subsequent semi-annual report). Please read the prospectus carefully prior to investing. It is the responsibility of any persons in possession of this document and any persons wishing to make applications for shares pursuant to the prospectus to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdictions. In certain jurisdictions, shares may not be available, publicly and/or otherwise, for purchase and the distribution of this document may be restricted. The T. Rowe Price Funds SICAV is currently registered for distribution only in Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.18
  19. 19. Additional Information This document has been issued by T. Rowe Price International Ltd (“TRPIL”), 60 Queen Victoria Street, London EC4N 4TZ, which is authorised and regulated by the UK Financial Services Authority (the “FSA”). This material is not intended for use by Retail Clients, as defined by the FSA. This material is provided for informational purposes only and is not intended to be a solicitation for any T. Rowe Price products or services. Recipients are advised that T. Rowe Price shall not offer any products or services without an appropriate license or exemption from such license in the relevant jurisdictions. This material may not be redistributed without prior written consent from T. Rowe Price. The contents of this material have not been reviewed by any regulatory authority in any jurisdiction where this presentation is being made or by any other regulatory authority. This material does not constitute investment advice and should not be exclusively relied upon. Investors will need to consider their own circumstances before making an investment decision. The European High Yield Bond Fund is a sub-Fund of T. Rowe Price Funds SICAV, a Luxembourg-domiciled société d’investissement à capital variable (SICAV), which qualifies as an undertaking for collective investment in transferable securities (UCITS). Applications for shares of the Fund can be made only on the basis of the current Prospectus of T. Rowe Price Funds SICAV together with the latest audited annual report (and, if published, subsequent semi-annual report). Please read the Prospectus carefully prior to investing. It is the responsibility of any persons in possession of this document and any persons wishing to make applications for shares pursuant to the Prospectus to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdictions. In certain jurisdictions, shares may not be available, publicly and/or otherwise, for purchase, and the distribution of this document may be restricted. The T. Rowe Price Funds SICAV is currently registered for distribution only in Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom. The specific securities identified and described do not represent all of the securities purchased or sold for this Fund. This information is not intended to be a recommendation to take any particular investment action and is subject to change. No assumption should be made that the securities identified and discussed were or will be profitable. T. Rowe Price, Invest With Confidence and the Bighorn Sheep logo are trademarks and/or registered trademarks of T. Rowe Price Group, Inc. in the United States, European Union, Australia, Canada, Japan, and other countries. This material was produced in the United Kingdom.19

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