This document provides a summary of the convertible bond market and macroeconomic conditions as of August 31, 2011. It notes that issuance of convertible bonds was down in August 2011 compared to the previous year, with only 5 US domestic offerings raising $1.1 billion. Interest rates across the US Treasury curve declined significantly in August, reflecting a flight to quality due to expectations of slower economic growth. Volatility in equity markets increased substantially in August driven by concerns over weakening US growth and ongoing European debt issues. The outlook for the convertible bond market is cautious given the weakness in equity markets.

1. 31 August 2011
- 1 -
Convertible New Issuance & Markets Summary:
US Domestic
Issuance
2011 YTD 89 $24.3 4.49% 25.3%
2010 86 $34.8 4.45% 25.8%
2009 103 $36.5 4.75% 22.5%
Conversion
Premium
# of
Offerings
Volume
($Bn)
Avg.
Coupon
8/30/2011 Change From 52wk From 52wk 2010
Indice Close 30 day YTD High Low % Change
S&P 500 1,212.9 -6.1% -4.5% -11.5% 16.5% 23.2%
S&P 500 VIX 32.9 30.3% 89.2% -31.5% 130.5% -7.2%
3-Month LIBOR 33 bps 7 bps 2 bps 0 bps 8 bps -13.9%
HY Credit Spreads 667 bps 174 bps 251 bps -59 bps 285 bps -18.4%
US Treasuries
2yr Yield 0.20% -16 bps -42 bps -0.7% 0.0% -0.1%
5yr Yield 0.93% -43 bps -108 bps -1.5% 0.1% 0.0%
10yr Yield 2.18% -62 bps -115 bps -1.6% 0.1% 0.3%
Commentary:
Macroeconomic backdrop:
• Bernanke gave no indication of timing for additional stimulus post Jackson Hole.
• 2
nd
quarter GDP has been revised to 1% while the 1
st
quarter reading was lowered to 0.4%.
– Personal spending increased 0.8% in July, Chicago PMI and Manufacturing New Orders were both higher than
expected – unfortunately these were some of the only positive economic indicators for the month
– one of the few positive indications for the economy during the month
– New orders of capital goods fell 1.5% while building permits fell 3.2% during the prior month
– Inflation expectations have eased in the past two months as indicated by commodity prices and Break-even rates
• Interest rates: yields are down across the curve, with the largest moves coming from the 5 year and 10 year maturities.
– The decline in Treasury yields represent a flight to quality due to expectations of slower economic growth
• High-yield (non-convertible) debt market: yields have spiked 175bps in the past 30 days, while new issuance for the
month of August has collapsed 92% from August 2010.
– Warren Buffett invested $5B in Bank of America on August 25th, supporting the financial sector at a high premium
– Only four new offerings have priced in the US in the past 30 days, raising only $1B
• The S&P Volatility Index, “VIX”, spiked to over 48% on August 8
th
, a level not seen since May 2010.
– Small cap stocks were down 7% and large caps were down 5% in August; the largest declines since August 2010
– The volatility in equities over the past 30 days was driven by two major factors:
Lower expectations of US growth in the 2
nd
half, and weak economic data
Continued European debt concerns and short selling bands in several Euro zone markets
Convertible Securities Market Outlook:
• Year to date, Semiconductors, Biotechnology, and Investment Companies/REITs have been the most active issuers.
• The month of August experienced the lowest number of offerings since August 2010.
• Only 5 US Domestic offerings were announced, raising only $1.1B over the past 30 days.
• Due to the weakness in equity markets, a number of firms have announced redemptions to take advantage of declining
convertible pricing in the secondary markets.
Additional color on convertible issuance trends
• The few offerings that were announced in August generally priced higher conversion premiums to take advantage of
higher equity volatilities.
– However, the ratio of offering size to equity market cap was lower than the 12 month average.
• Despite challenging market conditions, maturities and coupons issued in August were not indicative of market distress.

2. 31 August 2011
- 2 -
2011 Issuance
Issue Date Issuer
Equity
Ticker
Market Cap
($MM)
File to
Offer
Issue
Amount
($MM)
Coupon /
Dividend
Rate Premium Maturity Call Put
8/25/2011 Clean Energy Fuels Corp CLNE $931 0.00% $150.0 7.50% 10.00% 5.0 Years None None
8/2/2011 Mf Global Holdings Ltd MF $1,224 3.18% $325.0 3.38% 32.50% 6.9 Years None None
8/3/2011 Chart Industries Inc GTLS $1,563 -7.81% $250.0 2.00% 30.00% 6.9 Years None None
8/2/2011 Fidelity National Financial In FNF $3,636 -2.34% $300.0 4.25% 32.50% 6.9 Years None None
8/1/2011 Accuray Inc ARAY $496 -15.28% $100.0 3.75% 25.00% 4.9 Years None None
7/29/2011 Bgc Partners Inc BGCP $2,172 2.32% $160.0 4.50% 20.00% 4.9 Years None None
7/26/2011 Pow erw ave Technologies Inc PWAV $396 4.93% $100.0 2.75% 40.00% 29.9 Years 4.0 Years 7/15/2018 @
141.0877/27/2011 Horsehead Holding Corp ZINC $519 -5.19% $100.0 3.80% 35.26% 5.8 Years None None
7/26/2011 Micron Technology Inc MU $7,675 1.66% $345.0 1.50% 25.00% 19.9 Years 4.0 Years 8/1/2018 @ 100
7/26/2011 Micron Technology Inc MU $7,675 1.66% $345.0 1.88% 25.00% 19.9 Years 5.0 Years 8/1/2020 @ 100
7/25/2011 Rudolph Technologies Inc RTEC $294 -11.34% $60.0 3.75% 35.00% 4.9 Years None None
7/22/2011 Endeavour International Corp END $512 -3.09% $135.0 5.50% 30.00% 4.9 Years None None
7/1/2011 Hutchinson Technology Inc HTCH $74 40.09% $85.2 8.50% N/A 14.4 Years 4.0 Years 1/15/2015 @ 100
7/20/2011 Electronic Arts Inc ERTS $7,816 -1.67% $632.5 0.75% 35.00% 4.9 Years None None
7/19/2011 Forest City Enterprises-Cl A FCE/A $3,094 -4.29% $350.0 4.25% 20.00% 6.9 Years None None
6/30/2011 Satcon Technology Corp SATC $289 6.58% $16.0 7.00% 28.00% 1.8 Years None None
6/30/2011 Central European Media Ent-A CETV $1,272 3.08% $52.3 5.00% 25.00% 4.2 Years None None
6/29/2011 Insulet Corp PODD $947 0.54% $143.8 3.75% 32.50% 4.8 Years 4.0 Years None
7/1/2011 Oxygen Biotherapeutics Inc OXBT $70 -1.33% $4.6 15.00% -16.67% 3.0 Years None None
6/28/2011 Nuvasive Inc NUVA $1,289 -5.08% $402.5 2.75% 30.00% 5.8 Years None None
6/21/2011 Globalstar Inc GSAT $387 0.00% $50.0 5.00% 0.81% 10.0 Years None None
6/17/2011 Mgm Resorts International MGM $5,912 -5.98% $300.0 4.25% 27.50% 3.6 Years None None
6/20/2011 Atp Oil & Gas Corporation ATPG $821 0.00% $172.5 8.00% 39.00% Perpetual None None
6/20/2011 Broadsoft Inc BSFT $953 -2.40% $120.0 1.50% 17.50% 6.8 Years None None
6/15/2011 Integra Lifesciences Holding IART $1,303 -2.33% $230.0 1.63% 23.00% 5.3 Years None None
6/14/2011 Brookdale Senior Living Inc BKD $2,778 0.57% $316.3 2.75% 27.50% 6.8 Years None None
6/15/2011 Molycorp Inc MCP $4,320 -12.28% $230.0 3.25% 40.00% 4.8 Years None None
6/6/2011 Empire Resources Inc ERSO $34 0.00% $12.0 10.00% 28.81% 5.0 Years None None
5/27/2011 Wafergen Bio-Systems Inc WGBSE $28 3.03% $15.2 5.00% N/A 4.0 Years #N/A #N/A
6/1/2011 Akorn Inc AKRX $620 -2.67% $120.0 3.50% 30.00% 4.7 Years None None
5/23/2011 American Dg Energy Inc ADGE $82 0.00% $12.5 6.00% 22.22% 6.7 Years 5.0 Years None
5/24/2011 Cereplast Inc CERP $81 1.78% $12.5 7.00% 15.00% 4.7 Years None 6/15/2014 @ 100
5/24/2011 United Microelectron-Sp Adr UMC $6,884 2.32% $500.0 0.00% 39.00% 4.7 Years None 5/24/2014 @ 99.25
5/23/2011 Iconix Brand Group Inc ICON $1,745 -0.04% $300.0 2.50% 32.50% 4.7 Years None None
5/23/2011 Callidus Softw are Inc CALD $207 -9.40% $80.5 4.75% 25.00% 4.7 Years None None
6/2/2011 Neo Material Technologies In NEMFF $1,057 -11.44% $230.0 5.00% 37.00% 6.3 Years 6.0 Years None
5/18/2011 Biodel Inc BIOD $56 0.00% $3.9 0.00% 19.81% Perpetual None None
5/17/2011 Jinkosolar Holding Co-Adr JKS $617 4.49% $125.0 4.00% 22.50% 4.7 Years None 5/15/2014 @ 100
5/16/2011 Pdl Biopharma Inc PDLI $898 -1.53% $155.3 3.75% 27.50% 3.6 Years None None
5/13/2011 Vishay Intertechnology Inc VSH $2,930 4.85% $150.0 2.25% 12.50% 29.7 Years None None
5/11/2011 Lam Research Corp LRCX $6,054 2.25% $450.0 0.50% 32.50% 4.7 Years None None
5/11/2011 Lam Research Corp LRCX $6,054 2.25% $450.0 1.25% 32.50% 6.7 Years None None
5/10/2011 Novellus Systems Inc NVLS $3,163 7.58% $700.0 2.63% 20.00% 29.7 Years None None
5/10/2011 Alaska Comm Systems Group ALSK $408 -5.83% $120.0 6.25% 15.00% 6.7 Years None None
4/18/2011 Cytokinetics Inc CYTK $94 0.00% $12.1 0.00% 0.00% Perpetual None None

3. 31 August 2011
- 3 -
2011 Issuance (continued)
Issue Date Issuer
Equity
Ticker
Market Cap
($MM)
File to
Offer
Issue
Amount
($MM)
Coupon /
Dividend
Rate Premium Maturity Call Put
4/20/2011 Sunrise Senior Living Inc SRZ $518 -7.35% $86.3 5.00% 20.50% 30.0 Years None None
4/15/2011 Ppl Corporation PPL $15,513 4.63% $977.5 8.75% 22.50% 3.0 Years None None
4/12/2011 Fifth Street Finance Corp FSC $876 -1.94% $150.0 5.38% 10.00% 5.0 Years None None
4/6/2011 Ramco-Gershenson Properties RPT $478 0.00% $100.0 7.25% 15.00% Perpetual None None
3/31/2011 Amerigon Inc ARGN $337 1.60% $70.0 8.00% 5.32% 2.0 Years None None
4/5/2011 Greenbrier Companies Inc GBX $706 2.57% $230.0 3.50% 37.50% 7.0 Years None None
4/4/2011 Mentor Graphics Corp MENT $1,654 0.34% $253.0 4.00% 40.00% 20.0 Years 5.0 Years 4/1/2018 @ 100
4/4/2011 Interdigital Inc IDCC $2,174 8.16% $230.0 2.50% 32.50% 5.0 Years None None
4/6/2011 A123 Systems Inc AONE $647 -21.74% $143.8 3.75% 20.00% 5.0 Years None None
3/31/2011 Goodyear Tire & Rubber Co GT $3,581 1.17% $500.0 5.88% 25.00% 3.0 Years None None
3/28/2011 Photronics Inc PLAB $417 -1.79% $115.0 3.25% 32.50% 5.0 Years None None
3/28/2011 Ares Capital Corp ARCC $3,320 0.25% $230.0 5.13% 17.50% 5.0 Years None None
3/29/2011 James River Coal Co JRCC $810 1.57% $230.0 3.13% 30.00% 7.0 Years None None
3/23/2011 Haw aiian Holdings Inc HA $310 0.98% $86.3 5.00% 29.00% 5.0 Years None None
3/18/2011 Illumina Inc ILMN $8,192 -0.12% $920.0 0.25% 30.00% 5.0 Years None None
3/21/2011 Rait Financial Trust RAS $259 -19.10% $115.0 7.00% 10.00% 20.0 Years 5.0 Years 4/1/2016 @ 100
3/15/2011 Kohlberg Capital Corp KCAP $177 0.00% $60.0 8.75% 10.00% 5.0 Years None None
3/15/2011 Renesola Ltd-Adr SOL $759 2.09% $200.0 4.13% 22.50% 7.0 Years None 3/15/2016 @ 100
3/15/2011 Cemex Sab-Spons Adr Part Cer CX $8,680 -2.36% $977.5 3.25% 30.00% 5.0 Years None None
3/15/2011 Cemex Sab-Spons Adr Part Cer CX $8,680 -2.36% $690.0 3.75% 30.00% 7.0 Years None None
3/14/2011 Webmd Health Corp WBMD $3,335 -2.66% $400.0 2.25% 28.00% 5.0 Years None None
3/10/2011 Tivo Inc TIVO $1,043 1.83% $172.5 4.00% 27.50% 5.0 Years None None
3/9/2011 Northstar Realty Finance Cor NRF $418 -0.73% $172.5 7.50% 18.00% 20.0 Years 5.0 Years 3/15/2016 @ 100
3/8/2011 Old Republic Intl Corp ORI $3,041 0.00% $550.0 3.75% 32.50% 7.0 Years None None
3/3/2011 Metlife Inc MET $47,746 -1.72% $3,000.0 5.00% 25.00% Perpetual None None
3/7/2011 Altra Holdings Inc AIMC $562 -3.28% $85.0 2.75% 35.00% 19.0 Years 7.0 Years 3/1/2018 @ 100
3/7/2011 Health Care Reit Inc HCN $8,751 -2.62% $718.8 6.50% 20.00% Perpetual None None
3/1/2011 School Specialty Inc SCHS $274 -3.88% $157.5 3.75% 36.00% 15.0 Years 3.0 Years 11/30/2014 @ 115.9
2/22/2011 Unisys Corp UIS $1,529 -4.22% $258.8 6.25% 22.00% 2.0 Years None None
2/18/2011 Prospect Capital Corp PSEC $1,068 2.71% $172.5 5.50% 10.00% 5.0 Years None None
2/18/2011 Central European Media Ent-A CETV $1,272 3.08% $52.3 5.00% 25.00% 4.0 Years None None
2/16/2011 Molycorp Inc MCP $4,320 -12.28% $230.0 3.25% 40.00% 5.0 Years None None
2/11/2011 Mf Global Holdings Ltd MF $1,328 -2.28% $287.5 1.88% 27.50% 7.0 Years None None
2/9/2011 Hovnanian Enterprises Inc HOV $331 -2.71% $75.0 7.25% 22.00% 2.0 Years None None
2/9/2011 Jaguar Mining Inc JAG $462 -8.80% $103.5 5.50% 37.50% 5.2 Years None None
2/10/2011 Ship Finance International Ltd SFL $1,537 -3.09% $125.0 3.75% 39.29% 5.0 Years None None
2/4/2011 Avatar Holdings Inc AVTR $251 0.00% $100.0 7.50% 50.23% 5.0 Years None 2/15/2014 @ 100
2/4/2011 Savient Pharmaceuticals Inc SVNT $648 -1.60% $230.0 4.75% 25.00% 7.0 Years 4.0 Years None
1/31/2011 Nielsen Holdings NV NLSN $8,242 0.00% $287.5 6.25% 20.00% 2.0 Years None None
1/28/2011 Excel Trust Inc EXL $206 0.00% $50.0 7.00% 14.07% Perpetual None None
1/25/2011 Apollo Investment Corp AINV $2,272 0.00% $200.0 5.75% 17.50% 5.0 Years None None
1/25/2011 Ares Capital Corp ARCC $3,135 -4.75% $575.0 5.75% 17.50% 5.0 Years None None
1/20/2011 Dendreon Corp DNDN $5,282 0.00% $620.0 2.88% 40.00% 5.0 Years None None
1/11/2011 WebMD Health Corp WBMD $3,041 0.00% $400.0 2.50% 27.00% 7.1 Years None None
Average Average Total Average Average Average
$2,782 -1.11% $24,312.1 4.45% 25.4% 7.7 Years

4. 31 August 2011
- 4 -
New Issue Summary by Month
Issue Date # of Offerings
Average
Market Cap
(MM)
Common
Stock File to
Offer
Total Issue
Amount
(MM)
Coupon /
Dividend Premium
Deal Size /
Market Cap
August 11 5 $1,570 -4.45% $1,125.0 4.18% 26.00% 17.41%
July 11 11 $2,754 2.16% $2,317.3 4.74% 24.86% 22.56%
June 11 14 $1,570 -2.24% $2,395.3 4.53% 27.62% 15.57%
May 11 14 $2,086 0.84% $3,074.9 3.28% 24.31% 18.85%
April 11 9 $2,518 -1.70% $2,182.6 4.46% 22.00% 17.18%
March 11 20 $5,035 -1.56% $9,450.0 4.65% 24.69% 21.78%
February 11 10 $1,275 -2.92% $1,634.5 5.06% 29.85% 19.26%
January 11 6 $3,696 -0.79% $2,132.5 5.02% 22.68% 13.29%
December 10 11 $1,171 -7.96% $2,831.4 5.49% 22.17% 21.98%
November 10 13 $5,970 -4.40% $8,337.5 3.88% 27.50% 18.83%
October 10 8 $1,492 -2.98% $1,965.5 4.25% 28.09% 20.58%
September 10 9 $1,638 -8.27% $1,621.8 4.48% 28.90% 18.45%
August 10 3 $4,209 -10.45% $1,500.0 3.71% 20.83% 14.23%
July 10 4 $23,013 -2.58% $3,590.0 3.41% 29.38% 8.34%
June 10 6 $40,610 -2.80% $3,627.0 3.63% 22.32% 12.26%
May 10 3 $5,873 -6.55% $1,520.0 5.25% 24.17% 13.84%
April 10 8 $2,166 -7.70% $3,006.5 5.94% 29.01% 26.62%
March 10 14 $4,107 -1.79% $4,964.9 3.75% 26.60% 13.62%
February 10 3 $3,768 -2.02% $790.0 4.50% 17.67% 14.92%
January 10 5 $2,419 -7.32% $1,100.0 5.10% 21.40% 14.18%
December 09 7 $11,789 -10.73% $4,712.5 5.06% 26.99% 32.22%
November 09 7 $4,053 -9.12% $3,983.5 4.43% 26.37% 24.64%
October 09 10 $1,416 -11.03% $2,411.3 4.91% 26.76% 23.21%
September 09 12 $1,116 -9.17% $3,061.0 5.40% 26.06% 26.96%
August 09 2 $2,499 -9.56% $402.5 4.25% 25.89% 16.07%
July 09 6 $18,649 -6.09% $2,980.5 4.21% 26.23% 16.86%
Total 220 $6,018 -5.05% $76,718 4.52% 25.32% 18.60%
Balance Sheet / Liability Management
Companies with existing convertibles can take advantage of equity market dips to reduce or eliminate debt before the maturity or
call date. Companies with cash can opportunistically repurchase bonds at a discount in the open market to effectively manage
leverage. Companies with cash constraints should consider exchanging outstanding convertibles for new securities via private or
public exchange offers. Companies that have “in-the-money” convertibles may take advantage of their high stock prices by
accelerating or inducing conversions. In an accelerated conversion, the convertible issuer offers existing holders an incentive to
convert their holdings into common stock prior to the stated redemption date.

5. 31 August 2011
- 5 -
New Issue Summary by Month (continued)
$1,100
$790
$4,965
$3,007
$1,520
$3,627
$3,590
$1,500
$1,622
$1,966
$8,338
$2,831
$2,133
$1,635
$9,450
$2,183
$3,075
$2,395
$2,317
$1,125
5
3
14
8
3
6
4
3
9
8
13
11
6
10
20
9
14 14
11
5
0
5
10
15
20
25
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
#ofOfferings
AmountOffered($M)
Total Issuance
Total Issue Amount # of Offerings
New Issue Average Terms by Month
5.10%
4.50%
3.75%
5.94%
5.25%
3.63%
3.41%
3.71%
4.48%
4.25%
3.88%
5.49%
5.02%
5.06%
4.65%
4.46%
3.28%
4.53%
4.74%
4.18%
21.40%
17.67%
26.60%
29.01%
24.17%
22.32%
29.38%
20.83%
28.90%
28.09%
27.50%
22.17%
22.68%
29.85%
24.69%
22.00%
24.31%
27.62%
24.86%
26.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Average Terms
Average Coupon / Dividend Average Premium

6. 31 August 2011
- 6 -
Convertibles in the Secondary Market
Convertible arbitrage is represented by the Dow Jones / Credit Suisse AllHedge Convertible Arbitrage Index (formerly produced
by Credit Suisse/Tremont). Convertible arbitrage is typically defined as being both long a company’s convertible security and
short the underlying common stock. The long only, or “fundamental”, strategy is represented by the Jefferies Active US Index.
Due to the weakness in equities over the past month, the hedged index has outperformed the fundamental index. The arbitrage
strategy is up 0.55% year to date; however it was down -1.87% over the past 30 days. The fundamental strategy has returned -
3.81% over the past 30 days and -3.36% for the year to date. The outperformance of the AllHedge Convertible Arbitrage Index
has been driven by short selling the equity markets and the high volatility environment over the past 30 days. Note that
performance is tabulated as of August 30, 2011.
121.31
110.30
90.0
95.0
100.0
105.0
110.0
115.0
120.0
125.0
130.0
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
%Change
Indexed to January 1, 2010
Dow Jones Credit Suisse Allhed JACI US USD

7. 31 August 2011
- 7 -
Stock Volatility
The VIX is an index designed to estimate future equity market volatility and is measured by the Chicago Board Options Exchange.
The VIX has spiked to over 48% recently due to the increased risk of lower global growth, European debt concerns, and the
increased inflation risks in the world’s leading emerging markets. Lower trading volumes, which are normal for the summer
months have also contributed to the increased volatility. The last time the VIX reached these levels was during May of 2010. The
volatile markets during the summer of 2010 were eventually calmed by the QE2 announcement by the Fed.
30.23
0
10
20
30
40
50
60
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
CBOESPXVolatilityIndex
Trailing 12 Months

8. 31 August 2011
- 8 -
Inter-Bank Funding Cost
3-Month LIBOR is a key benchmark short-term funding rate for convertible investors. Since the Fed began quantitative easing in
late 2010, 3-Month LIBOR has remained steady around 30bps. The 5bps decline over the first 6 months of 2011 may be
explained by increased liquidity and confidence in the financial system. However, the large increase of 7bps over the past 30 days
may be attributed to several risk factors. European Banks have increased their demand for dollar deposits and several large
European institutions have tapped the Central Banks for swap lines. Furthermore, until the recent steps by Bank of America to
raise capital, there were signs of stress in the repo and money markets due to US financial institutions’ capital adequacy.
0.327
0.100
0.150
0.200
0.250
0.300
0.350
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
3MonthLIBOR%
Trailing 12 Months

9. 31 August 2011
- 9 -
US Treasury Yields
Treasury yields have declined across the curve since July 29th. The 2-year, 5-year, 10-year, and 30-year yields were down 16
basis points, 43 basis points, 62 basis points, and 60 basis points, respectively. Over the past 30 days, the yield curve has
flattened as investors have purchased longer maturities in response to short term risk factors domestically and in Europe. The
large declines in yields over the past 30 days, coupled with the sharp increase in volatility measured by options on Treasuries
indicate overall risk aversion in the markets.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
1 Year 2 Year 3 Year 5 Year 7 Year 10 Year 30 Year
Yield Curve
Current 30 Days Ago 180 Days Ago 1 Year Ago
`
0
20
40
60
80
100
120
140
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
MerrillLynchOptionVolatilityIndex
Trailing 12 Months

10. 31 August 2011
- 10 -
Corporate Credit
High yield credit spreads (Markit CDX NA High Yield Index) spiked to over 700 basis points in the past 30 days. Since late July
index has risen nearly 200bps. Prior to the sudden increase of the past month, the index had not been over 500bps since October
2010. HY new issuance trends slowed considerably since the end of May 2011. Over the past 60 days, new issuance trends have
returned to levels not seen since the summer of 2010 lows. Only four new offerings came to market in the month of August (See
US HY Issuance chart below).
654.3
250.00
350.00
450.00
550.00
650.00
750.00
850.00
1-Jun-11
4-Jun-11
7-Jun-11
10-Jun-11
13-Jun-11
16-Jun-11
19-Jun-11
22-Jun-11
25-Jun-11
28-Jun-11
1-Jul-11
4-Jul-11
7-Jul-11
10-Jul-11
13-Jul-11
16-Jul-11
19-Jul-11
22-Jul-11
25-Jul-11
28-Jul-11
31-Jul-11
3-Aug-11
6-Aug-11
9-Aug-11
12-Aug-11
15-Aug-11
18-Aug-11
21-Aug-11
24-Aug-11
27-Aug-11
30-Aug-11
Spread
Last 90 Days
$10.3
$18.2
$18.9
$17.7
$17.2
$16.0
$15.1
$37.4
$33.6
$7.1
$7.8
$17.0
$23.7
$17.0
$23.7
$38.3
$34.6
$31.8
$22.6
$32.2
$22.3
$37.3
$26.5
$44.2
$16.7
$18.0
$1.0
29
40
49
47
35
41
33
80 81
23
18
33
52
33
52
76
67
76
49
73
52
77
66
86
41
31
4
0
10
20
30
40
50
60
70
80
90
100
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
US HY New Issuance
Volume ($Bn) - LHS Deal Count - RHS
Please do not hesitate to call with questions.
Kind regards,
Thomas Murphy | Managing Director, Convertibles, Options, and Distressed Securities (C.O.D.S.)
Wedbush Securities | (213) 688-4465 Thomas.Murphy@Wedbush.com
1000 Wilshire Boulevard, 9th
Floor, Los Angeles, CA 90017
Allan Parks, CFA | Vice President, Convertibles, Options, and Distressed Securities (C.O.D.S.)
Wedbush Securities | (213) 688-4555 Allan.Parks@Wedbush.com
1000 Wilshire Boulevard, 9th
Floor, Los Angeles, CA 90017

11. 31 August 2011
- 11 -
The information contained in this report does not purport to be a complete description of the securities, markets or developments
referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee
that the foregoing material is accurate or complete. Any opinions are those of the Convertibles, Options, and Distressed Securities
(C.O.D.S) Division and are not necessarily those of Wedbush. Expressions of opinion are as of this date and are subject to
change without notice. The convertible securities of all the companies mentioned are not closely followed by Wedbush Equity
Research Department. Wedbush, its affiliates, officers, directors or branch offices may in the normal course of business have a
position in any securities mentioned in this report. This information is not intended as a solicitation or an offer to buy or sell any
security referred to herein. Past performance may not be indicative of future results.