Making Corporates Great Again - WPTA presentations/Making... · Corporate Debt Issuance Trends 19 The U.S. investment grade corporate bond market has continued to grow, particularly

Making Corporates Great Again

Wells Fargo Fixed Income Sales

April 2017

Stephen Bennett

WFS and its investment representatives do not act as Municipal Advisors and only provide investment advice or recommendations with respect to bond proceeds as permitted by available exemptions

Table of Contents

2

I. Corporate Bonds 101

II. Positioning on the Curve

III. The Supply Situation

IV. Cross Sector Relative Value

V. Resources

Corporate Bonds 101

� Corporate bonds are debt obligations issued by corporations for a variety of purposes including purchasing new equipment, investing in research and development, stock buybacks, paying shareholder dividends, refinancing debt and financing mergers and acquisitions, to name a few

� Corporate bonds can be described as either investment grade (high grade) or non-investment grade (high yield or junk), as distinguished by the associated bond credit rating which assesses the relative riskiness of the issuer to default

� Corporate bonds pay back principal to an investor at maturity of the obligation (bullet securities) and periodic interest (typically semi-annually) specified at initial pricing. Interest on corporate bonds is taxable

� Corporate bonds differ from corporate stock in that bonds do not represent an ownership interest in a company, whereas company stock or equity does represent an ownership interest. Bonds represent debt obligations that are paid back from company cashflows

� Corporate bond issues can be split into various industry /sector classifications including:� Telecom, Media, Technology

� Consumer discretionary

� Consumer staples

� Energy

� Financials

� Healthcare

� Industrials

� Materials

� Technology

� Utilities

4

Corporate Bonds

Source: Wells Fargo Securities, Bloomberg

� Level one

� Level two� Level three

� Level four

Moodys S&P Fitch

Aaa AAA AAA

Aa AA AA

A A A

Baa BBB BBB

Ba BB BB

B B B

Caa CCC CCC

Ca CC CC

C C C

5

Corporate Bond Ratings

There are both long and short-term bond ratings in the Corporate bond universe.

Investment grade bonds are rated Baa3/BBB- or better,

whereas non-investment grade bonds are rated Ba1/BB+ or

lower.

Long-Term Bond Ratings

Short-Term Bond Ratings

Source: Wells Fargo Securities, Moody’s, Standard & Poor’s, Fitch

Moodys S&P* Fitch*

P-1 A-1 F1

P-2 A-2 F2

P-3 A-3 F3

NP B B

*S&P & Fitch rating scales continue. S&P: B, C, D / Fitch: B, C

Investment Grade

Non-Investment Grade

Investment Grade


6

� Numbers 1-3 or + / - may accompany a bond to denote its relative riskiness within a rating category, with 1 / + as a better rating than a 2 or 3 / -

� A rating outlook indicates the direction a rating is likely to move over a one to two-year period and reflects trends that have not yet triggered a rating action, but that may do so if the trend continues

� Outlooks can be defined as

� Stable

� Positive

� Negative

� Outlooks are associated with long-term ratings

� An outlook change does not necessarily mean a bond rating will change nor does a stable outlook mean the rating will not change

Rating Watch

Rating Outlook

� A rating watch indicates a heightened probability of a rating change and the likely direction of such a change, defined as

� Positive

� Negative

� Evolving

� A rating watch is typically event-driven and generally resolved over a relatively short period of time

� A rating watch may also exist to communicate implications for certain events should they occur, or otherwise known as triggering events (i.e. shareholder or regulatory approval)

� A rating change may not always be precipitated by a rating watch change

Source: Wells Fargo Securities, Moody’s, Standard & Poor’s, Fitch


� A parent company /subsidiary relationship can take on multiple structures as demonstrated in the figures. A parent can have one or multiple operating companies associated with it in addition to varying percentages of ownership

� Parent companies and their operating companies/subsidiaries can have different ratings depending on a variety of factors, including:

� Access to liquidity (i.e. Central Banks)

� Leverage (debt and equity)

� Tax advantages (operations in multiple countries)

� Cross Guarantees / Support Agreements

� Industry Outlook

7

Parent Company

(A2 / A+)

Operating Company

(Aa3 / AA)

Parent Company

(A2/A)

Operating Company

(A3/A-)

Operating Company

(Baa/BBB)

Foreign Subsidiary Company

(A2/A)

Source: Wells Fargo Securities, Moody’s, Standard & Poor’s, Fitch, DBRS

Primary versus Secondary

8

Primary Secondary

Corporate bonds trade in both the primary and secondary

market.

� After bonds have been publicly issued, they then trade in the secondary market

� Liquidity for a corporation’s bonds can be determined by:

1. How often the bonds trade in the secondary market

2. The bid/ask spread

3. The deal size and type of investor (s) who hold the security

4. How many bonds trade in the market at any given time

� When bonds are initially offered to the public, they are brought to market via a syndicate process

� An issuer chooses a broker-dealer to price and offer its bonds to the public

� Orders are received by those investors who express interest in purchasing the bonds and the broker-dealer will then allocate bonds to investors accordingly

� Investors that are fully allocated receive the number of bonds requested

� Investors that are partially allocated receive only a portion of the bonds requested

� Investors that are unallocated do not receive any of the bonds requested

Source: Wells Fargo Securities

Coupon Structure

9

Fixed

Floating

Zero Coupon

Insert slide callout

Corporate bonds can be issued in three structures: fixed,

floating or zero coupon. The structure refers to the coupon

payment.

� A zero coupon bond does not pay any interest over the life of the bond but instead the investor purchases a security at a discount to par. With this structure, the investor receives all owed principal plus accrued interest at the bond’s final maturity

� A floating-rate bond pays a variable interest payment at a specified interval over the life of the corporate bond. This variable interest payment will consist of an underlying benchmark plus a spread

� Investment grade corporate bonds typically reset at 3-month intervals, but may reset monthly, semi-annually or annually

� A fixed-rate coupon bond pays a consistent interest payment at a specified interval over the life of the bond

� Coupon payments are usually paid on a semi-annual basis


Issuance Types

10

Commercial Paper*

Convertible Bond

Yankee Bond


Corporate bonds can be issued in a variety of sub-types beyond

traditional categories.

� A bond denominated in U.S. dollars that is issued in the U.S. by a foreign entity (bank or corporation)

� Convertible bonds can be converted into a predetermined amount of the company’s equity after a defined time period (the bond’s call date). This option can be exercised by the bond holder or the issuer, depending on the conversion structure

� Commercial paper (CP) is a negotiable, short-term promissory note issued for a specific amount and matures on a specific date. CP is flexible and can be issued with maturities ranging from 1 day to 397 days

Source: Wells Fargo Securities *For a thorough discussion on Commercial Paper, please refer to Wells Fargo’s Commercial Paper 101

Commercial paper offerings are subject to investor qualification

Corporate Bonds

11


Corporate bonds can be issued with a variety of final maturities

and described by maturity buckets (i.e. money market,

short-term, medium-term and long-term).


Long-TermExceeding 12 Years

� The parameters listed below are meant to serve as general final maturity limits.

Medium-Term5 – 12 Years

Short-Term 1 – 5 Years

Money Market0-1 Year

� This approach is more quantitative

� The objective is to identify specific companies using particular metrics, for example:

� History of earnings growth

� Ratio analysis

Top Down

� This approach is more qualitative

� The objective is to identify investment themes through looking at:

� Macroeconomic environment

� Sector/industry growth

� Geopolitical landscape

Bottom Up

12

Corporate Bond Analysis: Credit Outlook

� While both top-down and bottom-up approaches have a similar goal, their methodologies are markedly different


Corporate Bond Analysis: Credit Outlook

13

� While both top-down and bottom-up approaches have a similar goal, they approach credit analysis differently

Top Down Bottom Up

Sector/Industry Outlook

Maturity/Liquidity Profile

Geopolitical Landscape

Ratings Categories

Macroeconomic

Peer Analysis Within Sector

Outlook for Industry

Revenue / Earnings Growth Expectations

Sub / Senior / Guarantees

Cashflow, EBITDA, Debt, etc.

Relative Value


� Economic/Market risk

� Market and economic dynamics can affect new corporate bond issuance as well as trading spreads

� Credit risk

� Measured by the likelihood of default. This risk is calculated in both the bond rating as well as the spread over the appropriate Treasury rate

� Interest rate risk

� Fluctuations in interest rates can cause movements in the price and subsequently, the bonds yield and return, if sold before maturity

� Liquidity risk

� Liquidity can fluctuate based on an individual issuer dynamics. An investor should not rely on dealer liquidity as a backstop

� Call risk

� Some corporate bonds are issued with a make-whole call which gives the issuer the option to call a bond prior to maturity

� Inflation risk

� As inflation fluctuates, so will an investor’s real return

Benefits

� Diversification

� The universe of available corporate bonds is vast, encompassing different sectors of the economy as well as a range of investment objectives (interest rate, maturity, etc), for short-term investors, diversification away from financial risk is very important

� Steady income

� Most fixed income corporate bond securities pay interest semi-annually, allowing for a steady income stream to the investor

� Attractive yields

� Corporate bonds can offer a higher yield than similar-maturity government bonds

� Liquidity

� The market is very large (almost $8 trillion outstanding at the end of 2016) and secondary trading is quite active

Considerations

14

Investment Benefits and Considerations


� Level one

� Level two� Level three

� Level four

� Diversification

� Industries/Sectors

� Issuers

� Maturities

� Credit research and analysis

� There are a variety of resources for investors to acquire knowledge of a corporation and its debt such as rating agency reports, credit analyst reports, etc.

� Credit monitoring

� Ongoing monitoring of corporate bonds to analyze rating changes, spread changes as well as current news, will help investors manage risk

15

Managing Risk

Investors can manage and/or reduce risk in a variety of ways.


Largest Corporate Bond Offerings

16

� Proceeds used to finance acquisition of its wireless unit from Vodafone

� Offering was issued with the following maturities:

� 3Year, 5Year, 7Year, 10Year, 20Year and 30Year

� Proceeds used to finance acquisition of Botox maker Allergan Inc.


� 1Year, 2Year, 3Year, 5Year, 7Year, 10Year, 20Year, and 30Year

� Proceeds used to finance purchase of DirecTV


� 5Year, 7Year, 10Year, 20Year and 30Year

$49 BillionBaa1 / BBB+ / A-

Verizon Wireless

September 2013

$21 BillionBaa3 / BBB- / BBB-

Actavis PLC

March 2015

$17.5 BillionBaa1 / BBB+ / A-

AT&T

April 2015


The Supply Situation

Debt Issuance Trends

18

U.S. debt outstanding has dramatically increased over the past 20 years, but total debt outstanding has grown at a

slower pace in the last 2 years.

Treasury debt accounts for the largest sector in terms of debt

outstanding, followed by corporate debt.

Source: SIFMA, Wells Fargo Securities, LLC

U.S. Bond Market Debt Outstanding by Sector

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

40,000.0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

$ Billion

Municipal Treasury Mortgage Related

Corporate Debt Federal Agency Securities Money Markets

Asset-Backed

Corporate Debt Issuance Trends

19

The U.S. investment grade corporate bond market has

continued to grow, particularly as rates reached all-time lows.

Comparing 2006 to 2016 total debt outstanding, IG corporate debt has risen by almost $3bn.

U.S. Bond Market Debt Outstanding - Corporates

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

40,000.0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

$ Billion

Municipal Treasury Mortgage Related

Corporate Debt Federal Agency Securities Money Markets

Asset-Backed


2017 YTD IG Corporate Debt Issuance

20

2017 Corporate Investment Grade Issuance

Overall investment grade corporate bond issuance in 2017 is surpassing volume from 2016, continuing to reach new all-time

levels in terms of both par amount and number of new issues due to a strong start to

the year.

And although rates are rising, the overall rate environment is

still at historical lows.


0

10

20

30

40

50

60

70

80

90

0

20

40

60

80

100

120

140

160

180

200

January Febuary March

# of Deals

$Par (Bn)

2016 Par 2017 Par 2016 # of Deals 2017 # of Deals

Investment Landscape: Short-Term Securities

21

There are various corporate structures available for

investment one-year and in, including corporate bonds.

Fixed Income Corporates < 1 Year

Source: Wells Fargo Securities, LLC, Bloomberg , iMoneyNet, DTCC

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

O/N 1 Mo 3 Mo 6 Mo 9 Mo 1 Yr

A1/P1 CP A2/P2 CP AA Industrials AA Financials AA Consumer Staples

A2/P2 CP

A1/P1 CP

AA Consumer Staples

AA IndustrialsAA Financials

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

U.S.

Corporates

1-3 Years

5.33%

Mortgages

0-3 Years

WAL

2.80%

Asset

Backed

Securities

0-3 Years

2.60%

Asset

Backed

Securities

0-3 Years

4.73%

U.S.

Treasuries,

1-3 Years

7.32%

U.S.

Agencies

1-3 Years

7.05%

U.S.

Corporates

1-3 Years

14.69%

Mortgages

0-3 Years

WAL

5.42%

Mortgages

0-3 Years

WAL

3.15%

U.S.

Corporates

1-3 Years

4.49%

U.S.

Corporates

1-3 Years

1.78%

U.S.

Corporates

1-3 Years

1.19%

Asset

Backed

Securities

0-3 Years

2.74%

Asset

Backed

Securities

0-3 Years

2.16%

Mortgages

0-3 Years

WAL

2.15%

U.S.

Corporates

1-3 Years

4.71%

Mortgages

0-3 Years

WAL

6.95%

U.S.

Treasuries,

1-3 Years

6.61%

Asset

Backed

Securities,

0-3 Years

13.80%

U.S.

Corporates

1-3 Years

4.86%

Municipals

1-3 Years

2.37%

Asset

Backed

Securities,

0-3 Years

1.88%

Municipals

1-3 Years

1.07%

Mortgages

0-3 Years

WAL

1.10%

U.S.

Agencies,

1-3 Years

2.18%

U.S.

Corporates

1-3 Years

1.82%

U.S.

Corporates

1-3 Years

1.89%

Mortgages

0-3 Years

WAL

4.64%

U.S.

Agencies

1-3 Years

6.74%

Mortgages

0-3 Years

WAL

5.27%

Mortgages

0-3 Years

WAL

5.98%

Asset

Backed

Securities,

0-3 Years

3.35%

U.S.

Corporates,

1-3 Years

1.76%

Mortgages

0-3 Years

WAL

1.61%

Mortgages

0-3 Years

WAL

0.91%

Asset

Backed

Securities,

0-3 Years

0.89%

Municipals

1-3 Years

2.08%

Municipals

1-3 Years

1.28%

U.S.

Agencies

1-3 Years

1.77%

U.S.

Agencies

1-3 Years

4.52%

U.S.

Corporates

1-3 Years

5.67%

Municipals

1-3 Years

5.16%

Municipals

1-3 Years

4.21%

U.S.

Treasuries,

1-3 Years

2.35%

U.S.

Treasuries,

1-3 Years

1.55%

Municipals

1-3 Years

1.03%

Asset

Backed

Securities

0-3 Years

0.78%

Municipals

1-3 Years

0.72%

U.S.

Treasuries,

1-3 Years

1.90%

U.S.

Agencies

1-3 Years

1.18%

U.S.

Treasuries

1-3 Years

1.67%

U.S.

Treasuries

1-3 Years

3.96%

Asset

Backed

Securities

0-3 Years

4.84%

Asset

Backed

Securities

0-3 Years

-1.22%

U.S.

Agencies

1-3 Years

2.17%

U.S.

Agencies

1-3 Years

2.32%

U.S.

Agencies

1-3 Years

1.53%

U.S.

Agencies

1-3 Years

0.85%

U.S.

Agencies

1-3 Years

0.424%

U.S.

Agencies

1-3 Years

0.70%

Mortgages

0-3 Years

WAL

1.83%

U.S.

Treasuries,

1-3 Years

0.91%

Municipals

1-3 Years

1.41%

Municipals

1-3 Years

3.25%

Municipals

1-3 Years

4.70%

U.S.

Corporates

1-3 Years

-2.68%

U.S.

Treasuries,

1-3 Years

0.79%

Municipals

1-3 Years

1.29%

Asset

Backed

Securities,

0-3 Years

1.49%

U.S.

Treasuries

1-3 Years

0.43%

U.S.

Treasuries

1-3 Years

0.36%

U.S.

Treasuries

1-3 Years

0.62%

Source: Bloomberg, Federal Reserve, Wells Fargo Securities, LLC

Returns shown are the annual total returns of select Bank of America Merrill Lynch indices. This Table of Short Duration Returns is a comprehensive representation of relative sector

performance for a 10-year period through 12/31/2014. This material is offered compliments of Wells Capital Management to its clients. It is for your own personal information and we are not

soliciting an action based upon it. Past performance is not indicative of future results.

Investment Landscape: Annual Returns for Short Duration Sectors

0

1

2

3

4

5

6

22

Source: Bloomberg, Federal Reserve, Wells Fargo Securities, LLC

Returns shown are the annual total returns of select Bank of America Merrill Lynch indices. This Table of Short Duration Returns is a comprehensive representation of relative sector

performance for a 12-year period through 12/31/2006.

Investment Landscape: Annual Returns for Short Duration Sectors

23

6 1994 1995 1996

5

Mortgages

0-3 Years

WAL

2.184%

Mortgages

0-3 Years

WAL

12.486%

Mortgages

0-3 Years

WAL

6.156%

4

Asset Backed

Securities

0-3 Years

1.625%

U.S. Corporates

0-3 Years

11.717%

Asset Backed

Securities

0-3 Years

5.882%

3

Municipals

0-3 Years

1.311%

U.S. Treasuries

0-3 Years

10.999%

U.S. Corporates

0-3 Years

5.712%

2

U.S. Corporates

0-3 Years

1.182%

U.S. Agencies

0-3 Years

10.935%

U.S. Agencies

0-3 Years

5.377%

1

U.S. Treasuries

0-3 Years

0.569%

Asset Backed

Securities

0-3 Years

9.945%

U.S. Treasuries

0-3 Years

4.979%

0

U.S. Agencies

0-3 Years

0.267%

Municipals

0-3 Years

7.220%

Municipals

0-3 Years

4.108%

7 1999 2000 2001

6

Asset Backed

Securities

0-3 Years

4.830%

Mortgages

0-3 Years

WAL

8.992%

U.S.

Corporates

0-3 Years

9.585%

5

Mortgages

0-3 Years

WAL

4.677%

U.S. Agencies

0-3 Years

8.544%

U.S. Agencies

0-3 Years

8.635%

4

U.S.

Corporates

0-3 Years

3.904%

Asset Backed

Securities

0-3 Years

8.004%

U.S.

Treasuries

0-3 Years

8.300%

3

U.S. Agencies

0-3 Years

3.508%

U.S.

Treasuries

0-3 Years

7.995%

Asset Backed

Securities

0-3 Years

8.155%

2

U.S.

Treasuries

0-3 Years

3.063%

U.S.

Corporates

0-3 Years

7.608%

Mortgages

0-3 Years

WAL

7.792%

1

Municipals

0-3 Years

2.507%

Municipals

0-3 Years

5.678%

Municipals

0-3 Years

6.041%

6 2004 2005 2006

5

Mortgages

0-3 Years

WAL

2.802%

Asset Backed

Securities

0-3 Years

2.602%

Asset Backed

Securities

0-3 Years

4.725%

4

Asset Backed

Securities

0-3 Years

2.161%

Mortgages

0-3 Years

WAL

2.151%

U.S.

Corporates

0-3 Years

4.714%

3

U.S.

Corporates

0-3 Years

1.820%

U.S.

Corporates

0-3 Years

1.888%

Mortgages

0-3 Years

WAL

4.638%

2

U.S. Agencies

0-3 Years

1.183%

U.S. Agencies

0-3 Years

1.767%

U.S. Agencies

0-3 Years

4.515%

1

Municipals

0-3 Years

1.275%

U.S. Treasuries

0-3 Years

1.668%

U.S. Treasuries

0-3 Years

3.963%

0

U.S. Treasuries

0-3 Years

0.907%

Municipals

0-3 Years

1.406%

Municipals

0-3 Years

3.253%

24

Investment Landscape: U.S. Corporate Bonds (1-3 Years)

Corporate spreads have demonstrated stability during

the three previous rate-tightening cycles.

Source: Wells Fargo Securities, Bloomberg, Yield Book

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0.0

50.0

100.0

150.0

200.0

250.0

300.0

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Basis Points

OAS Fed Rate Hike

U.S. Corporate Bonds (1-3 Years)

25


Corporate spreads have demonstrated stability during

rate tightening cycles

Source: Wells Fargo Securities, Bloomberg, Yield Book

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0.0

50.0

100.0

150.0

200.0

250.0

300.0

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Basis Points

OAS Fed Rate Hike

U.S. Corporate Bonds (1-5 Years)

26

Short-term corporate OAS has tightened with the 1-3 Year and the 1-5 Year indices trending below their longer-term five-Year average.

Source: Bloomberg, Wells Fargo Securities, LLC

Investment Landscape: Investment Grade Corporate Bonds

1 – 5 Yr Corps and TSYs 1 – 3 Yr Corps and TSYs

70

75

80

85

90

95

0.0

0.5

1.0

1.5

2.0

2.5

3.0

12/30 1/30 2/28

Spread (RHS) Corp 1-5 Year TSY 1 - 5

65

75

85

0.0

0.5

1.0

1.5

2.0

2.5

12/30 1/30 2/28

Spread (RHS) Corp 1-3 Year TSY 1 - 3

27


1-3 Year corporate notes are mostly trading within their 4-Year median spread levels, and

pushing tighter.


2013 – 2017 1-3 Year HG OAS by Sector

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

Median - 25th 75th - Median Last

28


1-3 Year corporate note yields are very much a sector story, with materials and energy

issuers seeing sharp movements higher in yields earlier this year and then falling dramatically.

Most other issuers have been more in line with rate

movements.

While spreads are tightening, yields are still pushing higher, suggesting that rates markets are selling off more sharply.


2013 – 2017 1-3 Year Yield Dispersion

0.00

1.00

2.00

3.00

4.00

5.00

6.00Consumer Discretionary Consumer Staples Energy Financials

Health Care Industrials Information Technology Materials

Telecommunication Services Utilities

Investment Landscape: Short-Term Securities

29

There are various corporate structures available for

investment five-years and in, including corporate bonds.

Fixed Income Corporates – 5 Years

Source: Wells Fargo Securities, Bloomberg, iMoneyNet, DTCC

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

O/N 1 Mo 3 Mo 6 Mo 9 Mo 1 Yr 18Mo

2 Yr 30Mo

3 Yr 4 Yr 5 Yr

A1/P1 CP A2/P2 CP AA Industrials AA Financials AA Consumer Staples

A2/P2 CP

A1/P1 CPAA Consumer Staples

AA Industrials

AA Financials

30

Median Credit Rating Months Prior to Default

� The chart below plots more than 2,000 corporate issuers defaulting between 1983 to 2016

� Historically, issuers have been downgraded to B1 by Moody’s as early as five years prior to actually defaulting

Default Risk

Source: Moodys Investors Service, Wells Fargo Securities, LLC

31

Defaults by Sectors

� Credit quality weakened the most in 2016 within commodity sectors. Otherwise credit weakness was lower than the historical average for most sectors.

Default Risk


32

Distribution of Corporate Ratings in the S&P 500

� The majority of Corporate Issuers are rated within the A to BBB rating category based on Standard & Poors’ rating scale

Distribution of Credit Ratings in the S&P 500 Index


Resources

� Fixed Income Sales

� Strategy

� Investment policy samples

� Market trends and sector analyses’

� Research

� Analyst reports and insights

Industry Resources

� SEC Filings

� Company Press Releases

� Company Management Presentations

� Investor/Analyst Meetings

� Credit Reports

� News Publications (i.e. Wallstreet Journal, Financial Times, Reuters, etc)

Wells Fargo Resources

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Resources

� There are many resources available to investors to learn more about Corporate bonds and keep up with fixed income capital markets.

Source: Wells Fargo Securities, LLC

35

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This Commentary is a product of Wells Fargo Securities Fixed Income Sales and Trading and is not a product of Wells Fargo Securities, LLC’s Research, Economics and Strategy. The views expressed herein might differ from those of Research, Economics and Strategy.

This communication is for informational purposes only, is not an offer, solicitation, recommendation or commitment for any transaction or to buy or sell any security or other financial product, and is not intended as investment advice or as a confirmation of any transaction. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information.

WFS and its investment representatives do not act as Municipal Advisors and only provide investment advice or recommendations with respect to bond proceeds as permitted by available exemptions.

Accuracy of InformationThe information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC to be reliable, but Wells Fargo Securities, LLC does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC at this time and are subject to change without notice. Wells Fargo Securities, LLC and its affiliates may from time to time provide advice with respect to, acquire, hold or sell a position in, the securities or instruments named or described in this report.

Important Disclosures Relating to Conflicts of Interest and Potential Conflicts of InterestWells Fargo Securities, LLC may sell or buy the subject securities to/from customers on a principal basis. Wells Fargo Securities, LLC has or may have proprietary positions in the securities mentioned herein. The trading desk has or may have proprietary positions in the securities mentioned herein. The author's compensation is based on, among other things, Wells Fargo Securities, LLC's overall performance, the profitability of Wells Fargo Securities, LLC's Markets Division and the profitability of the trading desk.

About Wells Fargo SecuritiesWells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, and Wells Fargo Bank, N.A. Wells Fargo Securities, LLC and Wells Fargo Prime Services, LLC are distinct entities from affiliated banks and thrifts.

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SECURITIES: NOT FDIC:-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Disclosure Appendix

Documents

Making Corporates Great Again - WPTA presentations/Making... · Corporate Debt Issuance Trends 19 The U.S. investment grade corporate bond market has continued to grow, particularly