Nothing in this document constitutes an offer or a solicitation of an offer to buy or sell any security or other financial instrument or constitutes any investment advice or recommendation of any security or other financial instrument. BLOOMBERG TRADEBOOK believes that the information herein was obtained from reliable sources but does not guarantee its accuracy.

• Panellists:• Charlotte Wall, Data Explorers• Alexander Hofmann, Data Explorers• Lucinda Guthrie, DealReporter• Yanita Morris, DealReporter

• Moderator: Elaine Mulcahy, DealReporter

List of speakersIntroduction: David Masulo, Bloomberg Tradebook

European bond pipeline

• European corporates with additional borrowing needs that are expected to come to market

Utilities Autos Other

EDP VW K+S

E.on Peugeot BHP

RWE Renault Xstrata

Iberdrola Rio Tinto

Gas de France Holcim

Raw data on potential new issuance

• Anheuser-Busch InBev NV: a brewing company with production in America, Europe and Asia. Inbev needed to raise capital to help finance the purchase of Anheuser-Busch (Bud). This was a $52billion transaction making Inbev the top brewer in the world’s five biggest beer markets.

• Details of Rights Issue:

Rights Trading period 25th Nov 08 to 9th December 08

Terms; 8 shares for every 5 Rights received / bought.

Subscription Price = 6.45 Euro.

InBev

Stock borrowing in InBev

Copyright: Data Explorers

• 100k shares borrowed at 25% fee over a 21 day period for example. (Prices taken from 26th November 08). Cash Flows;

• SELL 100,000 shares at 17.72 Euros = 1,772,000 (cash-in)

• Note; 8/5 = 1.6. (Number of Rights to BUY) so 100,000 / 1.6 = 62,500 Rights

• BUY 62,500 Rights at 11.01 (Rights Price) = 688,125 (cash-out)

• BUY 100,000 shares at 6.45 (subscription price) = 645,000 (cash-out)

• Borrow Costs. 100,000 shares x 25% / 360 x 21 = 25,841.67

• Total P&L = 413,033.33 (Euros)

• Or

• 4.13 Euro per share.

Details of the InBev Trade

• 05-Jan-09   Infineon planning EUR 450m capital increase, acquisitions possible

• 05-Jan-09   Infineon capital raising unlikely in immediate short term (dealReporter)

• 05-May-09   Infineon intends to repurchase convertible and exchangeable notes

• 05-May-09   Infineon Dutch auction orders expected at around 75, as hedge funds bet on rights issue (dealReporter)

• 12-May-09   Infineon: EUR 45.1m takeup on 5% convertible; EUR 7.3m takeup on 1.375% exchangeable

• 26-Jun-09   Infineon poised for capital raise; wireless business seen as potential disposal candidate, bankers say (dealReporter)

• 10-Jul-09   Infineon announces EUR 725m rights issue

• 22-Jul-09   Infineon share price makes take up logical option for shareholders; strong off market rights trading - source sdealReporter)

• 04-Aug-09   Infineon places 322m shares in capital increase (Boersen-Zeitung)

Infineon

Copyright: Data Explorers

ArcelorMittal• 26-Feb-09 ArcelorMittal in talks to extend

2010 maturities(dealReporter)•

17-Mar-09   ArcelorMittal shares dip on rumours of EUR 5bn rights issue - report (Financial Times)

• 17-Mar-09   ArcelorMittal says no eed to raise capital through rights issue at this time (Company Press Release(s))

• 24-Mar-09 ArcelorMittal plans EUR 750m convertible

• 02-Apr-09 ArcelorMittal secures further USD 1.2bn refinancing

• 29-April 09 ArcelorMittal announces c.USD 3bn stock and convertible note offerings

• 29-Apr-09 ArcelorMittal equity/CB deal cushions 3.5x net debt/EBITDA covenant sources (dealReporter)

• 14-May-09  ArcelorMittal USD 2.25bn bond

• 09-Jul-09 ArcelorMittal seeking covenant rise to 4.5x, source says (dealReporter) Copyright: Data Explorers

Expected rights issue candidatesCompany Catalyst % stock on loan (change

on week)

Bilfinger Berger (NR) To fund acquisitions 2.15% (-2.19%)

Immofinanz Awaiting AGM results- first step towards merger with

ImmoEast

8.57% (+9.0%)

RSA Insurance Targeting AIG LatAM assets – leading

shareholder expecting EUR 1bn deal

0.71 (+156%)

Barratts EUR 500m deal expected- second wave of UK

housebuilders exp end September- advisers

appointed

5.30% (+18.5% )

Alstria Pitched - planning to cut debt without rights issue, could use proceeds for

acquisitions. Not short term

0.47% (+3.2%)

In June 2009, the gap between US 3m swap rates and Libor increased dramatically as risk aversion temporarily returned and banks restricted lending to corporates.

Predicting future rights issues

The companies that would be hardest hit by the higher spread would be those with the highest net debt to equity or net debt to ebitda ratio. Typically, a ratio of 3x net debt to ebitda is used as a rule of thumb to indicate trouble ahead.

Rights issues in the UKWe identified the UK and European largecap universe by net debt to equity ratio and then sorted by the rank of the Data Explorers Negative Sentiment Indicator (DNS), which identifies where utilisation is high and has been rising rapidly. Utilisation is a measure of supply: a utilisation ratio of 50% means that half the available supply from lending agents has been borrowed.

Rights issues in Europe• In Europe, the most heavily indebted non-financial companies are

concentrated in the Capital Goods and Transportation sectors, with emphasis on infrastructure companies.

• Grupo Ferrovial (owner of BAA in UK) has 7% of its shares outstanding on loan; but Itinere Infraestructuras has only 0.1%, despite being ranked 8th for Negative Sentiment. Utilisation is 45% so the demand for shorting is constrained by almost non-existent supply. Borrow fees in Sacyr are >12%.

Investors’ risk appetite looking ahead

Source: Data Explorers; FactSet

The SPX is up 12% YTD and fund managers will be looking to lock-in profits.One of the best proxies for investor sentiment is the borrow level in the SPDR ETF (Ticker: SPY). Since September 7th, short interest in the SPDR as measured by the quantity of shares on loan has risen by 24% from 60.8m shares to 80.0m shares. The USSI data which will be published later this week will back this up.

Big new borrows in the SPY since 7th Sept.

Appendix 1

The DNS indicator is based on the normalized sum of the moving average of utilization (a DX measure of supply vs. demand in the securities lending market) and the change in utilization. This indicator is based on a relative scale (normalized) from 0 to 100. A relatively high DNS generally reflects negative sentiment (an increasing amount of shorts relative to longs) while a low number shows relatively less negative sentiment. This measure is best viewed over a time series. A rising DNS signifies an increase in negative sentiment for the security which represents a potential risk for long positions and may indicate a signal for going short or underweight. A falling DNS signifies decreasing negative sentiment and may signal a move to close shorts or to go overweight.DNS (Data Explorers Negative Sentiment)Calculation DNS = a1 *(Previous 8 working day moving average of Utilisation) + a2*(Absolute Change in Utilisation over previous 7 working days) Wherea1 = 1 a2 = 1ExampleUtilization for previous 8 days = 25, 26, 27, 29, 30, 32, 33, 358 day Moving average = (25+26+27+29+30+32+33+35)/8 = 29.6Current Utilisation = 36Absolute Change = 36 – 26 = +10Indicator = 1* 29.6 + 1*(+10) = 39.6This is then normalized with the other indicators in the sample so that it lies in the range between 0 and 100.

Calculation of the DNS Indicator

Appendix 2

List of companies which show signs of pre-borrowing

We analysed DealReporters’ universe of 121 announced or potential rights issues candidates and compared cash equity volumes 1 month before the announcement date and 1 day before announcement. If the cash equity volumes had not risen, but the quantity of stock on loan had risen, there was potentially pre-borrowing in these names.

Obama elected President of USA

Lehman's files for Bankruptcy

Chrysler files for Bankruptcy

GM files for Bankruptcy

JPM Buys Bear Sterns

UK Lifts short sale ban

UK Implements Short Sale ban US Implements short sale ban

US lifts short sale ban

S&P 500 52 Week Low

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

3.00

3.50

4.00

4.50

5.00

5.50

6.00

Sep -06

Oct -06

Nov -06

Dec -06

Jan -07

Feb -07

Mar -

07

Apr -07

May -07

Jun -07

Jul -07

Aug -07

Sep -07

Oct -07

Nov -07

Dec -07

Jan -08

Feb -08

Mar -

08

Apr -08

May -08

Jun -08

Jul -08

Aug -08

Sep -08

Oct -08

Nov -08

Dec -08

Jan -09

Feb -09

Mar -

09

Apr -09

May -09

Jun -09

Jul -09

Aug -09

Long

-Sh

ort

Rati

o

Global Inventory Value Global Loan Value Global Long-Short Ratio

Appendix 3: Global Long/Short Ratio

Alex.hofmann@dataexplorers.com

Charlotte.wall@dataexplorers.com

Elaine Mulcahy: em@dealreporter.com

Yanita Morris: ym@dealreporter.com

Lucinda Guthrie: lg@dealreporter.com

Contact Details

Nothing in this document constitutes an offer or a solicitation of an offer to buy or sell any security or other financial instrument or constitutes any investment advice or

recommendation of any security or other financial instrument. BLOOMBERG TRADEBOOK believes that the information herein was obtained from reliable sources but does not

guarantee its accuracy.

Bloomberg Tradebook FX is offered in the U.S. by Bloomberg Tradebook Services LLC, a non-regulated entity.

Communicated by Bloomberg Tradebook Europe Limited, registered in England & Wales No. 3556095, authorized and regulated by the UK Financial Services Authority No.

187492. This communication is directed only at persons who have professional experience in the investments which may be traded over the systems and certain high net

worth organizations. Available in

all countries and is only offered where clearance been obtained.

Bloomberg Tradebook LLC member of FINRA (www.finra.org)/ SIPC/NFA. Bloomberg Tradebook do Brasil is the representative of Bloomberg Tradebook LLC in Brazil registered

with the BACEN. Bloomberg Tradebook Services LLC, Bloomberg Tradebook Australia PTY LTD ABN 36 091 542 077 ACN 091 542 077, Bloomberg Tradebook Do Brasil LTDA.,

Bloomberg Tradebook Canada Company Member of CIPF, Bloomberg Tradebook Limited, Bloomberg Tradebook Hong Kong Limited the first ATS authorized by the SFC–AFU 977,

Bloomberg Tradebook Japan Limited member of JSDA/JIPF, Bloomberg Trading Services Japan LTD, Bloomberg Tradebook Singapore Pte Ltd Company No. 200104338R,

Bloomberg Trading Services (Singapore) Pte Ltd Company

No. 200101232G. Bloomberg Tradebook Bermuda LTD, licensed to conduct Investment Business by the Bermuda Monetary Authority.

BLOOMBERG, BLOOMBERG PROFESSIONAL, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG ANYWHERE, BLOOMBERG TRADEBOOK, BLOOMBERG POWERMATCH

and BLOOMBERG.COM are trademarks and service marks of Bloomberg Finance L.P.(“BFLP”), a Delaware limited partnership, or its subsidiaries. BLOCK HUNTER, BWAP,

DEFINING LIQUIDITY, LIQUIDITY DOME and TRIGGER TRADING are trademarks and service marks of Bloomberg L.P. (“BLP”), a Delaware limited partnership. The BLOOMBERG

PROFESSIONAL service (the “BPS”)

is owned and distributed locally by BFLP and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan and Korea (the “BLP Countries”). BFLP is a

wholly- owned subsidiary of BLP. BLP provides BFLP with all global marketing and operational support and service for these products and distributes the BPS either directly or

through a non-BFLP subsidiary in

the BLP Countries. Bloomberg Tradebook is provided by a BLP subsidiary, Bloomberg Tradebook LLC, and its affiliates and is available on the BPS.

US EUROPE ASIA

+1 212 617 7070 +44 20 7330 7099 +65

6212 9798

bloombergtradebook.com