Special Situation, Debt Fund, Fixed Income, Hedge Fund, Private Debt Fund, Leveraged Loans, High Yield, Distressed Debt, Energy, Oil & Gas

1. Eclipse Capital Partners
Special Situations Discussion
Presentation
June 2015
Confidential – For Discussion Purposes Only
Ronald Hoplamazian
312.560.1003
ron.hoplamazian@eclipsecappartners.com

2. Executive Summary
 Growing Special Situations Market Opportunities
 Historical distressed precursors are present today indicating near term
growth in the number of distressed investment opportunities
 Over $100B pool of lower rated loans executed at high leverage levels
will produce substantial opportunities
 Eclipse Capital Partners believes the current market offers significant
opportunities and that this market will grow materially over the short
term providing attractive high yielding, risk-adjusted returns
 Investment Characteristics and Strategies to Deploy Capital
 Investing in companies with strong core competencies and leading
market positions that are experiencing distress due to over-leveraged
balance sheets, poor operating performance and/or are apart of out-of-
favor industries (ex. Oil & Gas)
 Target dislocated and stressed special situation secured debt in middle
market companies (revenues of $100MM to $750MM) trading at a
discount in the secondary market
 Direct origination of rescue financing and DIP lending solutions
 Opportunistic debt-for-control acquisitions
2

3. Executive Summary
3
 Key Market Drivers
 Regulatory Changes creating opportunity and restricting typical buyers
– Dodd-Frank Act and Basel III Accords are restricting typical buyers and
will create more forced selling due to onerous capital requirements
– 2015 regulatory implementation is reshaping systemically important
financial institutions’ (SIFI) portfolios and traditional capabilities
 Market Volatility leading to dislocation and forced selling
– Increased volatility as dealers hold smaller amounts of credit asset
inventories
– Oil & Gas commodity price declines have exposed BDC and other
institutional credit portfolio weaknesses
 Growing Illiquidity coupled with specialized fund investor exposure is setting
up “perfect storm”
– Low trading desk inventories creating headwinds for market execution
– Specialized managers (CLOs, loan & HY funds), holding ~75% of loans, will
not be able to liquidate in a normal fashion without severe discounts
 Distressed Indicators are present today
– Energy market distress preceded general market declines in the 2007
crisis
– Leverage levels have reached 2007-crisis and 1997-dotcom levels
– B rated loans are now 21.3% of the total market vs 17.1% in 2007

4. Regulatory Changes…Leading to
Opportunity
4
Timeline Overview Impact
Leveraged
Lending Guidance
Guidance Effective May 2013
Annual reviews expected to
begininMay 2014
Wider definitionof leveraged loan
Establishes minimum lending standards
"No exceptions policy" onnew issuances
Risk Retention
Rules
Expected inend of 2015
Requires CLO managers to retaina 5% interest without selling or
hedging for the life of the securitization
Risk-based
Capital Ratios 2015-2019
Higher risk weightings onnon-investment grade securities
Capital surcharge for SIFI's
The VolckerRule
July 2017
Implementation
Prohibits banks from sponsoring and conducting certainactivities with
a covered fund (e.g., private equity fund)
Restricts banks' fund ownership and lowers returns oninvestment
Supplementary
Leverage Ratio
January 2018
Implementation
Focuses oncapturing many off balance sheet exposures including
unfunded commitments and derivatives
Capital surcharge for U.S. globally systemically important banks and
their U.S. insured depository institutions
Higher loanpricing
Reduced bank lending and higher pricing
Reduced bank lending and higher pricing
Reduced bank lending and higher pricing
Reduce CLO issuance and higher pricing
CLO's comprise 58% of the non-bank leveraged loan
market

5. Growing Illiquidity…
5
…Creating Market
Volatility

6. 6
 Energy Market Distress
 As of March 2015, a record 25 U.S. energy firms, accounting for 13.6%, made
Moody’s watch list of 184 companies with the lowest debt ratings (<B3/B-),
which has increased 16% Y/Y
 Oil-and-gas issuers make up 4.5% of the S&P/LSTA Index vs 16% for the BAML
HY index. The share of oil-and-gas index loans trading below 90 has jumped
to 39%, from just under 1% with 0.95% of energy loans trading at 80 or less
(Avg. secondary bid for oil-and-gas loans is ~92 cents)
Subsector
'
YTW
(%)
Avg Price
($)
% Trading at
Distressed
Levels
Services & Equip. 12.0 79.18 48.9
E & P 11.3 78.25 35.4
Midstream/Pipeline 6.1 97.86 0.4
Refining 7.0 88.13 0.0
All Energy 10.0 85.86 29.8
Market Opportunity…Today

7. Market Opportunity…Coming
7
Source: S&P Capital IQ
Leverage levels have now reached 2007 (pre-crisis) and 1997 (pre-
dotcom) levels – Historical distress precursor
Source: S&P Capital IQ

8. Market Opportunity
Specialized vehicles, fueling activity back to 2007 levels, are less
suited to or restricted from holding stressed debt
8
Source: S&P Capital IQ – 4Q14

9. Market Opportunity
Lower rated loans make up a greater part of the market today than
in 2007 when B rated assets were only 17.1%
9
Source: S&P Capital IQ
Source: S&P Capital IQ – 4Q14
$832.4 billion
Source: S&P Capital IQ

10. Market Opportunity
$105B pool of lower rated loans executed at high leverage levels will
produce substantial distressed targets during soft economic times
10
Source: S&P Capital IQ
Source: S&P Capital IQ – 4Q14
$105 billion
Source: S&P Capital IQ

11. Market Opportunity
11
$832B
Leveraged
Loan Market
$339B
B/B+ Rated
Assets
$105B
>=6x,B/B+
Rated Assets
$21B
Special
Situation
Universe
20% conversion of the $105B highly levered loans = $21 Billion
special situations investment universe
($s in MM) 3-Year 2015 2016 2017
Total 20% 35% 45%
Market Share
1% $210 $42 $74 $95
2% $420 $84 $147 $189
3% $630 $126 $221 $284
Avg. Cash Yield* 14.3% 14.3% 14.3% 14.3%
Avg. Discount** 10.0% 10.0% 10.0% 10.0%
Total Annual Yield 24.3% 24.3% 24.3% 24.3%
Net Income***
1% 47.9 9.6 16.8 21.5
2% 95.7 19.1 33.5 43.1
3% 143.6 28.7 50.3 64.6
*implied yield based on purchasing 10% interest rate loans for 70% of Par
**30% purchase discount accretion over a 3 year duration
***assumes 1.5% of expenses (origination/asset management)
in the $21B Special Situations Universe
36-Month Special Situations Investment Cycle

12. 12
Competitive Landscape
Banking and
Financial Service
Institutions have
reduced traditional
distressed investing
due to regulations
and capital
requirements
Market “Sweet
Spot” for special
Situations Investors
seeking dislocated
or stressed (over-
levered, good
companies) assets
Distressed Hedge
Funds and Loan-to-
Own Institutions
focused only on
debt-for-control
investing
Historical Paradigm Shifting as Onerous Regulations Reduce
Traditional Investor Appetite, Creating a Large Opportunity for a
Relationship-Based Approach

13. Exhibit 1:
Transaction and
Performance Summaries
13

14. Project Star – Eclipse Capital Partners acted as an advisor to the buyer and seller in the sale of a special
situations corporate portfolio. The transaction closed in 2013.
Eclipse Capital Partners Transaction
%
Energy and Energy Svcs 25%
Financial Services 17%
Business Services 18%
Media 17%
Pharmaceuticals 7%
manufacturing 9%
Food & Beverage 3%
Leisure 3%
Real Estate 1%
Construction 1%
Telecom 1%
100%
Portfolio Breakdown by Industry
Commitment Outstanding
% of Debt
Assets All-in rate
First Lien $175,966,478 $172,866,478 39% 11.1%
Second Lien 181,073,360 180,319,947 40% 14.9%
Unsecured 94,083,532 94,083,532 21% 15.4%
Total Debt $451,123,369 $447,269,956 100% 13.5%
Warrants $8,286 $8,286
Current Yield Pref. Stock 10,005,000 10,005,000
Equity Co-Invests 17,454,735 17,454,735
Preferred Stock 86,097,028 81,069,528
Common Stock 131,503,345 131,503,345
Total Equity $245,068,394 $240,040,894
Total $696,191,764 $687,310,851
Portfolio Summary
14

15. 2008-2011 Portfolio Statistics ($’s MM’s)
Mr. Hoplamazian served as the head of GE Capital’s Special Situations / Portfolio Acquisition Group, a 6
member team started in 2007 which grew to over $900 million in assets under management generating a 30%
return on equity. During his tenure he was responsible for originating, trading, underwriting and asset
management functions and sourced opportunities from a broad range of clients including hedge funds, private
equity sponsors, asset managers, banking institutions and financial services companies. Prior to that, he was
part of GE Capital’s Private Equity Sponsor Finance Restructuring Group and Global Energy Business investing
in structured equity investments and other corporate finance transactions. He has served as a board member
in GE Capital's portfolio companies and partnered with management teams and operating partners in a
variety of industries to assist with value creation activities, operational and financial restructuring and
refocusing business strategies.
Performance Record
30%
$922
94 / $9.8
$289
$10.0 / 27 bps
$22.9 / 250 bps
Weighted Average ROE
AUM
# of Investments / Average Size
Cumulative Income
Cumulative Losses / Annual Avg.
Average Annual Defaults
15

16. Exhibit 2:
Transaction Watchlists
16

17. 17
Energy Loans Watchlist

18. 18
Issuer Industry Action pending Details
21st Century Oncology RTSX Healthcare services distressed securities
July 21, 2014: Bonds plumb low at 55 on reports of a
capital raise to avoid a covenant breach.
Allen Systems / ASG Software Software services skips coupon May 16, 2014: Skips May 15 bond coupon, cut to D.
American Apparel Retail seeks default waiver June 19, 2014: Co. seeks default waiver after firing CEO.
Caesars Entertainment Gaming restructuring negotiations July 29, 2014: TL slides despite cutting 2015 maturities.
Deluxe Entertainment Svcs. Movie production services downgrades
Sept. 2, 2014: Co cut to CCC, from B, on concerns about
a near-term covenant breach; TL slips to 88.
Dex Media Marketing downgrades May 13, 2014: Co. cut to CCC+ on tight covenants.
Education Management For-profit education restructuring negotiations Aug. 27, 2014: Co. unveils restructuring plan.
Endeavour International Energy E&P skips coupon
Sept. 2, 2014: Co. skips Aug. 30, Sept. 1 coupon amid
restructuring negotiations. 2L notes fall to 45.
EveryWare Consumer products in forbearance July 16, 2014: TL lenders extend forbearance to July 22.
FleetPride/FPC Holdings Wholesale distributor downgrades Nov. 26, 2013: Loan cut to B3 on weak performance.
Getty Images Multimedia distressed securities
July 21, 2014: Bonds recover to 90 since reaching record
lows at 72 after 3Q’13 report in November.
Gymboree Retail distressed securities July 14, 2014: Bonds fall to 62 after CFO quits.
iPayment Business services downgrades
June 13, 2014: Co. cut to CCC, from B-, on possible
covenant violation. Outlook is negative.
J.C. Penney Company Retail distressed securities May 15, 2014: Long bonds still in 80s despite 1Q gains.
Logan’s Roadhouse Restaurants downgrades
Aug. 1, 2014: Bonds trade at 73 after downgrade to
Caa3.
MidWest Vanadium Mining skipped coupon Feb. 15, 2014: Enters 30-day grace after skipped coupon.
Milagro Oil & Gas Energy E&P in default Dec. 30, 2013: Cut to D after skipping 2nd-lien interest.
NII Holdings Wireless telecom skipped coupon Aug. 16, 2014: Bonds fall after co skips Aug. 15 coupon.
Preferred Sands Energy services in default Dec. 12, 2013: Cut to D, tripping default rate.
RAAM Global Energy Energy E&P in forbearance Aug. 4, 2014: Enters forbearance through Sept. 30.
RadioShack Retail distressed securities June 23, 2014: Bonds trade at record low 33.82.
Rue 21 Retail distressed securities
June 11, 2014: Buyout bonds recover to 80 after results
meet expectations, following test of record low 59 in
May.
Sotera Defense Solutions Security technology covenant violations Nov. 26, 2013: Loan cut to CCC on covenant breach.
UniTek Global Services IT services hires advisors June 6, 2013: Co. hires Miller Buckfire amid forbearance.
Walter Energy Coal mining downgrades Aug. 14, 2014: Co. cut to SD after distressed exchange.
Waterford Gaming Gaming downgrades Apr. 23, 2014: Co. cut to CC on weakened cash flow.
Xinergy Coal mining hires advisors Nov. 13, 2013: DB is advisor for strategic alternatives.
Verso Paper Paper products distressed securities
July 17, 2014: Bonds fall after co. reveals inadequate
participation in debt swap. Final deadline is July 30.Source: S&P Capital IQ LCD
LCD Loans & Bonds Watchlist