1. finance
2. bank

Credit
Market
Summary
31 October
2014
Portfolio
Commentary
Yield
enhancing
diversifier
Torben Ronberg
Head of Sub-Investment Grade
The European HY universe is on a growth path - a path that has enhanced the attractiveness of the market which is now
offering a more diverse stable of names to pick from when establishing new portfolios or managing existing portfolios.
European High Yield Bond Volume
€80B
€70B
€60B
€50B
€40B
€30B
€20B
€10B
€0B
2006
2007
2008
2009
Secured
2010
2011
Unsecured
2012
2013
Subordinated
YTD
YTD
24/10/13 24/10/14
Maturity Wall: HY Bonds as of 31/08/2014
€60B
€50B
€40B
€30B
€20B
31.9
50.3
49.8
2018
2019
39.5
54.0
42.1
€10B
€0B
2016
2017
BofA MLHY
2020
2021 or
Later
Source for both graphs: S&P European High-Yield Weekly
The maturity wall above illustrates a comfortable maturity profile of bonds up for refinancing over the coming years,
leaving companies to focus on managing their fundamental business and improve profitability. Another noticeable trend in
European HY is a growing part of the market offering security, which should support higher recovery rates in situations of
ECM Credit Market Summary
2
default. Historic and expected default rates remain very low for European HY and one could argue that investors are paid
adequately for the risk taken.
European HY has faced more volatility since the summer with a sell-off during September which for Euro HY (BAML
H7PC) resulted in a negative total return of 83.9bps, and for Sterling HY (BAML HLHY) a negative total return of
325.6bps. The sell-off was driven by various aspects such as rate hike concerns, the Scottish referendum, and sector and
country specific concerns. October provided a net flat performance after having experienced volatility in the secondary
markets, but likely to have been helped by muted primary activity. This said attractive entrance points have started to
materialise with Sterling HY looking most attractive. Supported by the high level of spreads offered in European HY, more
flat and positive performance months are to be expected going forward.
High Yield presents an attractive yield in a low rate environment
Relative Yields
8%
7%
6%
Yield 6.93%
21.5%
Yield 4.66%
3.7%
5%
4%
3%
Yield 3.46%
78.5%
57.2%
96.3%
2%
0%
21.9%
Yield 1.22%
15.5%
78.1%
84.5%
Euro Corp
Euro Financial Corp
Yield 1.22%
1%
42.8%
Sterling Original Issue
High
Euro Original Issue
High Yiel d
Sterling Corp
Spread % Yield
Yield 1.07%
Yield 1.15%
47.7%
90.4%
52.3%
9.6%
Euro Govt
Global Govt Bonds G7
Rates % Yield
Source: Bloomberg, BoAML as of 30/10/2014
With the heightened annual new issue volumes experienced over the last few years the universe has broadened but also
allowed issuers who would have struggled to issue in the European HY market earlier to refinance their balance sheets.
Therefore, as is the case for any sub-investment grade investment asset class, asset selection is also key to successful
investments in the European HY market. Despite the technical support from the high spread element performance draw
down will remain a risk factor which needs close monitoring.
As mentioned above we saw a variation in performance between the Euro and Sterling markets with sub-sections such as
retail businesses having a further negative impact on performance. Despite the recent volatility both markets are showing
positive YTD total returns of 4.582% and 1.604% respectively.
Return Summary for H7PC & HLHY Tue Sep 30 2014
H7PC
HLHY
Total Return Factors
1-Month
3-Month
6-Month
Price Return (Local)
-1.304
-1.687
-0.934
0.465
1.425
2.915
-0.839
-0.263
1.981
4.582
Income Return (Local)
Total Return (Local)
YTD
1-Year
1-Month
3-Month
6-Month
YTD
1-Year
0.058
2.053
-3.761
-4.658
-4.592
-3.641
-1.702
4.523
6.282
0.505
1.638
3.376
5.245
7.287
8.335
-3.256
-3.02
-1.215
1.604
5.586
The general hunt for yield experienced recently has brought new types of investors into the European HY asset class. We
have experienced demand from domestic and global investors who would normally not go as far as sub-investment grade
credit and who are not likely to remain investors long term in the European HY market. This change in investor base is
potentially adding to the volatility and liquidity aspect of the European HY market.
Pockets of liquidity, a long term conviction investment approach and excellent and diverse access to market participants
are tools required to establish exposure in the European HY asset class. An opportunity for established investors to obtain
further diversification to their investment strategy with the added benefit of attractive spreads safe guarding returns in
times of rate hike concerns and general market volatility.
ECM Credit Market Summary
3
Investment Grade
Corporates
Duncan Warwick-Champion
Co-Head of Global Credit Research
With the week’s headlines mostly concentrated on
the banking sector (ECB’s AQR) and monetary policy
(end of US QE and increase in Japanese stimulus) the
European reporting season ground on quietly in the
background with “beats” continuing to outweigh “misses”
by a considerable margin. As we’ve seen through most
of this year, top line growth remains elusive for many
companies, but management teams remain focused on
cost control and thus earnings are repeatedly exceeding
expectations. However, what we have found interesting
within the plethora of Q3 reports and presentations is
how relaxed many management teams appear to be with
the Chinese market. We, like others, had flagged China
as a particular concern for many European companies,
but while pressures within luxury consumer goods are
undeniable, elsewhere the data appears to be holding
up better than expected. Chinese auto numbers continue
to improve, chemical manufactures reported solid (but
not spectacular) trends, and companies with exposure
to Chinese infrastructure spending also continue to
perform well irrespective of whether this exposure is via
construction or technology. Turning from Asia, and despite
being bombarded with articles about the poor state of
the European economy, European consumer data also is
holding up better than expected. Consumer confidence
numbers are up and we have seen this translated into
strong road, rail and air traffic movements. Indeed, the
main negative has been the milder than normal weather
conditions across Europe which have caught most
clothing retailers with high levels of unsold winter stock.
Moreover, as a consequence of stable/unexciting operating
conditions, a lessening of foreign currency headwinds
and improving earnings, we have seen companies start
to ratchet-up their returns to shareholders. The increased
distributions are not significant in size and therefore will
not adversely impact leverage, but you do have to wonder
if they are a sign that corporate management teams are
feeling a little more confident. Of course, the real sign
of confidence will be an increase in long-term capital
expenditure and that, sadly, still appears to be some way
away.
With corporates flying under the radar, the EN40 Corporate
BBB index tightened 2bps this week to close on Thursday
at 114, which is only 3bps off the YTD tights. The primary
market remains relatively thin with about €4bn of bonds
issued this week, including €1.5bn from Hutchison
Whampoa, a €1.2bn (dual tranche) from Novartis and
€500m from Akzo Nobel.
Interest Rates
Alastair Thomas
Head of Rates & Treasury Management
This week 10 year treasuries continued their normalisation
from the mid-October excessively overbought levels with
yields +6bps. However, bund yields were -5bps and gilts
unchanged. I expect treasuries to continue to underperform
bunds and to a lesser extent gilts in the short term with
the 10 year spread retracing towards mid-October’s levels
which are some 10 bps wider than current levels. This view
is based on the diverging monetary policy and economic
prospects.
by lower energy prices but see the risk of persistently lower
than target inflation as having “diminished somewhat since
early this year”. They finally ended QE and maintained
rates at 0-0.25% with the wording that rates will remain
close to zero for a “considerable period”. As a result 2
year yields jumped 7bps and the yield curve flattened. We
expect the flattening to continue as we approach rate hikes
in the middle of next year so long as data does not get
worse.
The statement from this week’s FOMC was slightly more
hawkish than some expected with an upgrade to their
assessment of the labour market and no reference to
increased downside risks to the economy (rather they see
the risks to the economy and labour market as “nearly
balanced”). They noted that inflation will likely be held down
Gilts outperformed treasuries partly due to the new
BoE deputy governor Shafik’s stating that she saw
“no significant evidence” of inflationary pressure in the
economy and the UK jobless rate could fall further without
generating inflationary pressure. The low inflationary
environment in Europe was highlighted by the Swedish
ECM Credit Market Summary
4
Riksbank reducing from 0.25% to 0.0% and further
lowering their inflation projection for 2015. The Eurozone’s
estimated October CPI is a low 0.4%.
US durable goods orders were weaker than expected but
Q3 GDP at 3.5% qoq was strong as was the Richmond
Fed manufacturing index and Conference Board consumer
confidence number. The last data point is particularly
relevant for the employment outlook due to the survey
questions related to employment prospects. Eurozone
data was generally weak: a fall in the IFO business climate
index, a plunge in German exports to Russia but an easing
in the Eurozone’s bank credit standards with demand for
loans up the most since 2011.
Loans
Sam McGairl
Portfolio Manager
Conditions in the new issue loan market have favoured
borrowers for most of the year, but the recent volatility
has led to pushback from investors. This week three
transactions have been moving towards a close and none
of them have been smooth rides through the primary
process, despite being names which are well known to
leveraged finance investors. Drug company AMCo has
been wrapping up a dividend recap but the payment out
to sponsor Cinven has caused investors to question the
transaction, even though the borrower has performed well
and delevered considerably in the two years since it first
came to the market. Price talk has widened to E+450-475
and L+500-525 at an issue price of 99.5. Similarly, RAC
has performed strongly in recent years but a refinancing
related to a stake sale by the sponsor to the Singaporean
GIC has also struggled in primary. Pricing there has
widened to L+475 at 98.5. Both of these two contain
large GBP tranches but the pushback has affected Euro
denominated issues as well – Styrolution’s loan backing
Ineos’ purchase of the 50% which it does not already own
looks set to price at E+550 with a 1% floor at 98. In this
case pricing has been somewhat influenced by where loan
pricing in the US currently stands.
The secondary market best reflects the differential between
the US and Europe where investors can still pick up one to
two points by switching out of EUR into USD for the same
borrower, albeit usually with a small drop in margin. The
CLO warehouse technical continues to underpin the bid
for Euro assets with most names grinding higher over the
week. A sharp drop in the price of TDF on Tuesday was
mistakenly attributed to a large seller which never was and
the loans have returned to a 96.5/97.5 market today.
High Yield
Henry Craik-White
Senior Investment Analyst
The market tried to consolidate this week but it feels like
there are trapped longs in some of the more risky names,
causing them to underperform. Also, half term holidays
exacerbated the liquidity situation in cash, leaving many
reaching for synthetic hedges to cover their cash books,
which may now be unwound following the unexpected
increase in Japanese QE. Spreads on cash bonds in the
Merrill Lynch H9PC index widened by 2bps and the iTraxx
Xover CDS index broadly matched this, with spreads
widening by 3bps.
Earnings season continues and on the whole the sentiment
was positive. In the TMT sector, Baltic telco, Bite, reported
profits which were down 11% but in-line with expectations.
ECM Credit Market Summary
Its bonds have fallen 14 points in October which reflects
the change in the way the market now views smaller,
risky credits. French cable TV operator, Numericable had
a good quarter with revenues and profits up 4% and 5%
respectively. However, this news played second fiddle to
the confirmation that’s its proposed acquisition of French
telco, SFR, had been approved. Equipment manufacturer,
Alcatel missed on the top line but handily beat at the profit
level due to recent cost cutting, driving margins up by over
200bps. Its five year CDS tightened 20bps on the news.
In the UK, regional newspaper publisher, Johnston Press,
confirmed that its plans to shift from print to digital is still
on track and profits are likely to be at a similar level to last
year. This stable profit outlook sent its bonds up two points.
5
In the autos space, Renault reported volumes which
were flat but it saw good growth in Europe, with volumes
up 7.6% driven by the UK, Spain and Italy. Its emerging
market activities are offsetting this but the company
did reaffirm its guidance for the year and remains a
possible candidate for upgrade back to investment grade.
Competitor, Fiat, also reported Q3 numbers which weren’t
as strong but these were the side show to news that it
plans to spin off Ferrari and reduce its core debt by issuing
a mandatory convertible bond. If successful, leverage
would fall to c.1x which is still at the higher end of the
sector. Its stock responded well, rising 11% but the credit
markets were less impressed with its five year CDS broadly
unchanged.
On-line travel agent, eDreams was the most volatile name
as news broke late Friday afternoon that airline group, IAG,
had withdrawn ticket sales from some of its websites due
to a disagreement on how booking fees were disclosed
to customers. The initial bond move was extreme with its
sub bonds falling fifty points. The company subsequently
hosted a conference call which confirmed IAG sales were
a very small part of its business and that some ticket sales
had resumed, which sent its bonds back up forty points.
Holders of Italian telco Wind bonds saw prices marked up
two points after news broke that its owners, Vimplecom,
were in active discussions with 3 Italia over the already
much publicised potential merger. The move was then
reversed when Vimplecom confirmed talks had broken
down due to the lack of agreement on how the deal should
be structured.
There were three deals in the primary market this week,
totalling €0.8bn equivalent. These came from Abengoa’s
listed spin off, Abengoa Yield, which issued €200m of five
year notes, Jaguar Landrover, which issued $500m of
unsecured notes and debt management agency, Arrow
Global, which issued €220m of secured notes to finance its
acquisition of competitor, Capquest.
Sovereigns & Financials
Satish Pulle
Head of Financials & ABS
Robert Montague
Senior Investment Analyst
The Big Picture from the Comprehensive Assessment
Unfortunately, regulators’ stress tests for banks are
becoming increasingly complex, with many factors being
considered – economic forecasts, NPLs, future bank
earnings, provisions, capital quality, deferred tax assets
etc. It is sometimes more instructive to step back from the
excruciating detail, and focus instead on a few simple facts
and figures:
Total Non-performing Exposures (NPE): €879 Billion
Collateral Value backing NPEs: €328 Billion
NPE provisions: €242 Billion
The key problem facing many Eurozone banking systems
is that this large volume of NPLs cannot be resolved easily.
Bankruptcy systems are archaic or in suspension in Italy,
Greece, Portugal and Ireland. For each non-performing
loan that a bank puts into default, there is a knock-on
impact on other firms. Crucially, at a system level, the
collateral value of €328bn is somewhat suspect, as most
of it is real estate, and distressed transactions have been
ECM Credit Market Summary
few and far between – if even 20% of real estate collateral
backing NPEs is forcibly sold by banks, all values would
fall sharply. This brings us to provisions, which are clearly
too low at just 27.5% of NPEs. This means banks would
have to recognise further losses on any defaults, because
collateral recoveries and provisions are insufficient. What
level of provisions would be sufficient for banks to be able
to take a strong stance with non-performing borrowers? We
suspect provisions would have to be as high as 50% - 75%
of NPEs, or €200bn - €400bn higher than current levels.
This then leaves the question of whether capital is sufficient
to absorb loan losses in excess of collateral and provisions.
Core Equity Tier 1 (CET1) Capital for the banks tested by
the ECB is roughly €1tn, which is clearly insufficient in the
context of €879bn in NPEs, with insufficient provisions
coverage. Furthermore, while most banks have passed,
many are dependent on a particularly weak form of
deferred tax assets (DTAs), which only create capital if
future profits are significant. The ECB considered this
arcane issue sufficiently important to devote three pages
to it in their report. The stock of DTAs which require future
profitability to contribute true capital is high: €26bn in
Spain, €23bn in France; €16bn in Germany, €10.5bn (15%
6
of CET1) in Greece, €7bn in Italy, €6bn Ireland, and €3bn
in Portugal.
These are the reasons behind yesterday’s comment by the
Chairman of the European Banking Authority, Andrea Enria,
as quoted by Bloomberg: …the stress test “was very robust
and very severe. Was it fool-proof? Of course not.”
Financials
The start of the week began with the market digesting
the results from the ECB’s Comprehensive Assessment.
From our perspective there was no major surprises with
an aggregate shortfall of €25bn across twenty-five banks;
however twelve of these institutions have already raised
€15bn of capital, leaving the other banks to raise €10bn. It
was also not surprising that the Italian and Greek banking
sectors were the worst performers but we were slightly
surprised at how well the German banks in particular
NordLB performed in the tests. Bonds in some of the
perceived borderline names which passed the stress tests
such as NordLB, Banco Popular and Allied Irish Banks
performed strongly on the news. Monte dei Paschi was the
major casualty of the stress test with the bank reporting
a €2.1bn shortfall and scrambling to find a private sector
solution in the next two weeks. Credit markets will now
start to focus on the deliberations of the G20 meeting
in Brisbane at the end of November on TLAC (see last
week’s Credit Market Summary for more details) and the
implications for bank issuance.
The Coco market was somewhat choppy, trying to
rally with equities, but facing headwinds from potential
issuance. The new issue market remains fairly quiet as
we are in the middle of reporting season but we expect
some smaller banks to issue AT1, having passed the ECB
Comprehensive Assessment. BBVA said that it would
look to issue more AT1 in early 2015, whilst RBS said
they would look to come to issue AT1 for the first time in
2015 once there was more regulatory clarity and their own
capital position was stronger. Greek senior bonds also
rallied initially but this proved to be short-lived as investors
focused on the continuing uncertain political backdrop
of presidential elections in early 2015. Q3 earnings from
European banks were generally positive with the notable
exception of Standard Chartered; the bank is clearly now
suffering from the hangover of several years of strong
China and commodity-related loan growth. Sentiment
toward the name was also hurt by news that the US
regulators might re-open a probe into its 2012 sanctions
agreement.
Asset-Backed Securities
Maddi Rowlatt
Asset Class Specialist, ABS
The ABS market this week was mainly focussed on a
large BWIC sale by BayernLB of US and European mixed
ABS assets. The list comprised 650 names, of varying
ratings, adding to a total size of €6.5bn. Around half of
this consisted of European bonds, of which under 20%
are eligible for the ECB ABS purchase programme, due
to commence next month. The large amount of paper was
well absorbed in the market, giving investors confidence
in sustained demand for paper. The secondary market
was very quiet outside of this BWIC execution given the
large size and work undertaken by brokers and investors.
Spreads remained steady and there was little reaction to
the ECB announcement on Thursday.
The ECB announced that four asset managers, Deutsche
Asset & Wealth Management, State Street Global Advisors,
ING IM, and Amundi have been appointed to help with the
ABS purchasing programme. Rather than directly purchase
assets, as they do for the CBPPP3, the ECB will use these
appointed managers to help with pricing and to pre-select
ECM Credit Market Summary
securities with final purchase decisions being made by
various committees comprising members of national central
banks and the ECB.
A new Paragon Mortgages UK Buy to Let RMBS was
announced this week, the third one in this year. Paragon
Mortgages No.21 is marketing three tranches with initial
price thoughts for Class A notes at 3-month Libor + 75-80
bps. Issue size is expected to be around £250mm, with
pricing due early next week. Bumper 6, a Dutch Auto
deal from LeasePlan Netherlands is also still marketing.
Volkwagen placed Private Driver 2014-4 with two tranches;
1.97-year Triple A and 2.51-year Double A notes came
at 27bp and 65bp over three-month Euribor respectively,
managing to bring VW’s spreads back to September levels
after a wider October.
7
Emerging Markets
Duncan Warwick-Champion
Co-Head of Global Credit Research
At its 31st October monetary policy meeting the Central
Bank of Russia (CBR) stepped up its efforts to support
the rouble and hiked its benchmark policy interest rate by
150bps to 9.50%. The rate hike was larger than consensus
expectations of +50bps, though is unsurprising given
the pace at which the rouble has plummeted through the
second half of 2014. In a policy statement accompanying
the rate hike the CBR noted that “significant changes in
external conditions have taken place: a considerable fall
in oil prices and stricter sanctions imposed by certain
countries” and that rouble depreciation risked “further
acceleration in inflation”.
The day prior to the policy meeting the rouble had rallied
strongly – rising by approximately 5% against the CBR’s
dollar/euro basket. The move was attributed to shorts
covering ahead of the CBR meeting as rumours circulated
that the central bank was set to intervene in the FX market
much more aggressively and unpredictably, thereby making
the rouble less of a one-way bet. Higher interest rates
will certainly be rouble-supportive, though are unlikely
to translate into a dramatic recovery in the currency –
immediately after the CBR rate hike announcement the
rouble had already given up half of the prior day’s gains.
ECM Credit Market Summary
However, the risk of a calamitous fall in the currency that
endangers financial stability has certainly reduced. Credit
default swaps on the Russian sovereign end the week
14bps tighter at 237bps.
The one-day rally in the rouble also coincided with the
signing of a gas deal between Russia, Ukraine and the
EU in which Russia agreed to resume supplies to Ukraine.
Under the deal the EU and IMF have pledged to provide
US$4.6bn in financial aid to the Ukrainian government
so that it can repay existing debts to Gazprom and make
payments for future gas supplies. European Commission
President Jose Manuel Barroso described the deal as
the “first glimmer” of hope that tensions between Russia
and the West will ease. Moscow’s insistence that it will
recognise the outcome of rebel-organised elections in the
east of Ukraine set for 2nd November suggests that such
easing may still be some way away.
8
ECM Market Monitor
As at 30 October 2014
CREDIT MARKETS*
1WK
MTD
2014 YTD
2013
Source
EURO CORPORATES
0.08%
0.25%
2.14%
2.72%
BofA ML ER00
EURO IG FINANCIALS
0.12%
0.29%
2.26%
3.24%
BofA ML EB00
EURO HIGH YIELD
0.19%
0.03%
1.63%
9.95%
BofA ML HE00
-0.03%
-0.73%
1.11%
4.63%
BofA ML UN00
STERLING IG FINANCIALS
0.16%
-0.72%
1.54%
7.47%
BofA ML UF00
US CORPORATES
0.01%
-0.50%
1.21%
2.86%
BofA ML C0A0
US IG FINANCIALS
0.06%
-0.31%
1.29%
4.07%
BofA ML CF00
US HIGH YIELD
0.12%
-0.07%
1.50%
9.19%
BofA ML H0A0
EURO LOANS
0.11%
-0.21%
2.62%
9.63%
S&P Euro denominated ELLI*
EQUITY MARKETS
1WK
MTD
YTD
2013
Source
FTSE 100
0.70%
-2.23%
-1.03%
19.05%
UKX INDEX
S&P 500
2.27%
1.25%
9.70%
32.37%
SPX INDEX
NIKKEI 225
3.43%
-3.19%
-2.43%
59.37%
NKY INDEX
1WK
MTD
YTD
2013
Source
BRENT OIL
-0.68%
-8.90%
-22.17%
-0.28%
CO1 COMDTY
GOLD
-2.69%
-0.78%
-0.57%
-28.04%
GOLDS COMDTY
1WK
MTD
YTD
2013
Source
USD
-0.26%
-0.14%
-8.22%
4.17%
EURUSD CURNCY
GBP
-0.08%
1.18%
-5.05%
2.26%
EURGBP CURNCY
JPY
0.61%
-0.53%
-4.82%
26.45%
EURJPY CURNCY
1WK
MTD
YTD
2013
Source
-0.22%
1.80%
7.44%
-5.92%
ITRR7T10 index
0.07%
1.76%
8.24%
-5.08%
QX6I index
STERLING NONGILTS
COMMODITY MARKETS
CURRENCY MARKETS VS EUR
Asset-Backed Securities
RATES MARKETS
US 10YRS
GILTS 10YRS
BUNDS 10YRS
0.35%
0.64%
10.72%
-1.60%
QW3Q index
-0.22%
2.15%
8.97%
-7.64%
U10C
EURO SWAP 10 YRS
0.63%
0.77%
13.06%
-2.81%
E10C
STERLING SWAP 10YRS
0.16%
2.04%
9.42%
-6.65%
S10C
1WK
MTD
YTD
2013
Source
ITRAXX MAIN
-0.04%
0.13%
1.44%
4.04%
ERIXITEU index
ITRAXX CROSSOVER
-0.51%
-0.38%
6.54%
17.79%
ERIXITXO index
US SWAP 10YRS
CDS MARKETS
ECM Credit Market Summary
9
ECM in the Media
Recent articles
24 October
Markets punch drunk
Investment Europe
24 October
EDreams plunges after Iberia, British Airways halt ticketing
Bloomberg
24 October
European markets show signs of stress
Wall Street Journal, NASDAQ, Capital.gr, ADFVN, Markets Spectator
22 October
European stocks jump as ECB mulls buying corporate bonds
The Wall Street Journal, NASDAQ
21 October
Test fears hit German sub bonds
International Financial Review
13 October
I should CoCo?
Portfolio Institutional
13 October
German sub bonds rocked by threat of stress test failures
International Financial Review, Reuters
10 October
ECB involvement leaves investors grappling with low returns
Capital Structure
02 October
CLOs: The Comeback Kings
International Financing Review (IFR), Hedge Fund Insight
01 October
Solvency II drives insurers into sub-bond market
Reactions
29 September
Junk-Bond rout amplified bt Gross exit as sales expected
Bloomberg
Click here to view ECM’s press archive
ECM Credit Market Summary
10
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• issued by ECM for information only;
• not investment advice;
• confidential and should not be disclosed other than to your
professional advisers; and
• directed at persons (“Investment Professionals”) having
professional experience in matters relating to investments, and
any investment or investment activity to which this document
relates is available only to and will be engaged in only with
such persons.
If you are not an Investment Professional you should not read this
document or participate in any meeting or other communication
relating to it.
ECM accepts no liability for and gives no warranty or guarantee
and makes no representation relating to the performance of any
investments referred to in this document or to the accuracy and/or
completeness of the information contained in this document. Any
information contained in this document relating to any securities
or issuer thereof is subject to the offering document relating
thereto and does not constitute an offer to sell, or a solicitation
of an offer to purchase, interests in the funds. Such an offer or
solicitation can only be made pursuant to the applicable offering
document, and any summaries contained herein are qualified
in their entirety by reference to the more detailed discussion
contained in each such offering document.
ECM and its affiliates do not provide tax advice. Please note
that: (1) any discussion of tax matters contained in this document
(including any attachments) cannot be used by you for the
purpose of avoiding tax penalties; (2) this document was written
to support the promotion or marketing of the matters addressed
herein; and (3) you should seek advice based on your particular
circumstances from an independent tax advisor.
• Investments offered in the U.S. by Wells Fargo Funds
Distributor, LLC, Member FINRA/SIPC, Wells Fargo Funds
Distributor, LLC. and ECM Asset Management Limited are
affiliates of Wells Fargo & Company.
• NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE
VALUE PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS.
ECM is authorised by the Financial Services Board of South
Africa as a Financial Service Provider.
228404 103114
Sources:
Author photographs: MeltingPot Pictures
ECM Credit Market Summary
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