Private Equity Special Report June 2014

5/24/2018 Private Equity Special Report June 2014

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SPECIAL COMMENT

CORPJUNE 17, 2014

Table of Contents:

PRIVATE EQUITY DEALS DEFAULT AT ASIMILAR PACE 2MEGA-DEALS PERFORMED MUCH

WORSE 4DEFAULT RATES VARY AMONG PE FIRMS 5BETTER-PERFORMING COMPANIESLEVER UP AGAIN VIA DIVIDENDS 8IPOS AUGUR HIGHER RATINGS 9PRIVATE EQUITY DEALS GET MOREDOWNGRADES AND FEWER UPGRADESIN THE RECOVERY 9PRIVATE EQUITY DEFAULTS HAVESIMILAR FIRM-WIDE ULTIMATERECOVERY RATES 12DEFAULTS LIKELY AHEAD FOR A COREGROUP OF WEAK COMPANIES 13COVENANT-LITE LOANS AND BONDSWITH WEAK PROTECTIONS 13EXITS FROM PRE-CRISIS DEALS HAVEBEEN SLOW 14APPENDIX A: COMPANIES OWNED BYTHE TOP 14 PRIVATE EQUITY FIRMS 15ABBREVIATIONS: 21MOODYS RELATED RESEARCH 22Analyst Contacts:

NEW YORK +1.212.553.1653

John Rogers +1.212.553.4481

Senior Vice President

[email protected]

David Keisman +1.212.553.1487

Senior Vice President

[email protected]

Tom Marshella +1.212.553.4668

Managing Director - US and Amer Corporate Fin

[email protected]

contacts continued on the last page

US Private Equity - Tracking the Largest Sponsors

Defaults Contained in the Recessionbut Downgrades Continue Long AfterRatings trends suggest a modest weakening of credit quality

Private equity deals default at nearly the same rate as a benchmark portfolio of otheUS speculative-grade companies. The high leverage common in big US private equit

backed buyouts prior to the credit crisis did not translate into disproportionately high

default rates over the past six years. From 2008-13, the average annual default rate fo

companies backed by the 14 largest private equity firms was 6.0%, compared with 6.

for a benchmark portfolio.1

Mega-deals performed much worse. The average annual default rate for the 10 megadeals from the top 14 firms deals involving more than $10 billion of debt was

17.8%2from 2008-13, compared with 6.4% for the benchmark portfolio.

Default rates vary among private equity (PE) firms. Portfolio companies ofCerberuand Apollo had the highest average annual default rates among the top 14 PE firms fr

2008-13, while those of Madison Dearborn, KKR, Blackstone and Providence Equity

Partners had the lowest. Although TPG and Providence had low default rates, a largenumber of their companies are currently rated B3 with a negative outlook or below, s

their default rates could ultimately increase.

Top 14 private equity firm deals experienced more downgrades than upgrades durinthe recovery. Due to the combination of a weak economic recovery and a lax credit

environment, companies owned by the top 14 sponsors received more downgrades th

upgrades from 2010-13. Almost 25% of the firms owned by these sponsors have

underperformed expectations, resulting in downgrades. Others have increased leverag

to finance dividends or acquisitions, limiting any upside to their ratings and leaving

them at greater risk of default in the event of a future tightening of market liquidity.

Private equity defaulters have firm-wide recovery rates similar to those of non-sponsored defaulters.The high leverage of LBOs, on average, does not translate into

lower investor recoveries in the event of default. We plan to publish more detailed

research on this topic in the near future.

1 All US speculative-grade nonfinancial companies with an estimated senior unsecured rating of B1 or lower, excluding companies owned by the top 14 private equity

firms. The estimated senior unsecured rating is typically one notch below the corporate family rating.2 This default rate is not controlled for ratings relative to the benchmark portfolio; the differences in default rates are not statistically significant largely due to sample siz

See additional comments in the About this report box on page 2.
http://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=170039


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2 JUNE 17, 2014 SPECIAL COMMENT: US PRIVATE EQUITY - TRACKING THE LARGEST SPONDEFAULTS CONTAINED IN THE RECESSION BUT DOWNGRADES CONTINUE LONG A

About this report

As part of our continuing effort to provide transparency on the behavior of 14 of the largest private

equity firms3and the performance of the companies they own, we have analyzed 336 companies fro

2008-13. One hundred eighty eight of these deals were structured in the bubble years prior to the

financial crisis (2004-07) and were still owned by private equity sponsors at the start of 2008. Theremaining 148 transactions were initially rated over the past six years. Our analysis focuses on the

default and ratings performance of these deals and compares them to a benchmark portfolio4.We al

comment on how the low interest rate environment and investors willingness to accept minimalcovenants in the debt they purchase has affected ratings and defaults over this timeframe. In thisreport, we outline the major conclusions from our analysis. Appendix A contains a list of thecompanies included in this analysis.

On average, each of the of the top 14 private equity firms has 24 companies in this study. Given thsmall sample size, differences in each companys initial rating, differences in the time span of each das well as the studys short time frame (2008-13), it is extremely difficult to generate data that can bdeemed statistically significant to any reasonably high threshold (a 95% confidence interval or a t-

statistic of 2.0 or greater). This is especially true for smaller groupings like the mega-deals, where evan 11 percentage point differential in the default rate versus the benchmark portfolio is not statisticsignificant. To determine statistical significance, we used a standard regression analysis using monthdata and controlled for the companys rating. (This is important because the average rating of thecompanies in this study is lower than the average rating for high yield companies.)

Nevertheless, differences between the performance of these firms and the benchmark portfolio appeto be reasonable and consistent with the behaviors we have observed. We also place greater emphason the performance of these firms relative to each other, as each firm is responsible for structuring tdeals it participates in, irrespective of the ratings we assign.

Private equity deals default at a similar pace

Despite the high leverage associated with private equity-backed US corporate buyouts prior to thecredit crisis, companies owned by the top 14 private equity firms have defaulted at nearly the samepace as a benchmark portfolio over the past six years. During 2008-13, the annual default rate5forcompanies backed by these top 14 private equity firms was 6.0%, compared with 6.4% for thebenchmark portfolio. There were 55 defaults among companies owned by the top 14 firms, of whic37, or 67%, occurred during 2008-09, while the remaining 18 occurred during 2010-13. Nearly althe defaults (53 of 55) occurred among the 188 companies structured during the bubble years priorthe financial crisis.

3 In 2008, we examined companies that were financed during 2004-07 and were owned by private equity sponsors. We then ranked the private equity firms by the

amount of their Moodys-rated debt. These 14 firms were the largest and there was a substantial drop-off in the rated debt for next largest sponsor. As a result, we

limited our analysis to the 14 largest firms.4 The benchmark portfolio consists of all US speculative-grade nonfinancial companies with an estimated senior unsecured rating of B1 or lower, excluding companies

owned by the top 14 private equity firms. The estimated senior unsecured rating is typically one notch below the corporate family rating. Companies owned by these

firms comprise roughly 15% of all companies rated B1 or below.5 Unless noted otherwise, average annual default rates refer to trailing 12-month default rates calculated using monthly ratings data and adjusted for rating withdraw

See Measuring Corporate Default Rates, November 2006.

This publication does not announcea credit rating action. For anycredit ratings referenced in thispublication, please see the ratingstab on the issuer/entity page onwww.moodys.comfor the mostupdated credit rating actioninformation and rating history.
http://www.moodys.com/http://www.moodys.com/http://www.moodys.com/


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Covenant-lite loan structures, low interest rates and the availability of credit enabled these privateequity sponsors to delay bankruptcy or out-of-court restructuring for some of their sponsoredcompanies during the recession, which pushed some of the defaults into the subsequent years. Of th18 companies that defaulted during 2010-13, only two were initially rated after 2009.

Taking a closer look at the recession period 2008-09, it would have been reasonable to assume a higdefault rate for LBO companies owing to their high leverage. Were it not for covenant-lite loans, wbelieve the default rate for companies owned by the top 14 private equity sponsors likely would havbeen higher. But among companies owned by these private equity sponsors, the average annual defarate in 2008-09 was 12.8%. This was slightly better than the 13.9% default rate for the benchmarkportfolio. While these default rates are high by historical standards for US non-financial companiesthe similarity between the two default rates suggests that private equity involvement has not putsponsored companies at greater risk of default relative to similarly rated companies.

When we calculated the default rates by whole-letter rating category for the period 2008-09, thedifferences were larger, with the benchmark portfolio having a lower default rate than companiesowned by the top 14 PE firms in the B-category and higher rates for the Caa-category (see Exhibit below). However, regression analysis indicates that these differences in default rates are not statisticasignificant. Nevertheless, a higher default rate in the B-category for companies owned by these top PE firms would be consistent with more aggressive use of distressed exchanges, while the lower defarate in the Caa-category would be consistent with greater use of covenant-lite loans by the PE firmshelp their lower-rated companies survive through the recession. We are undertaking additionalresearch on LBO defaults to determine if the empirical data supports these suppositions.

During the recovery period, 2010-13, the average annual default rate for companies owned by thesefirms and rated B1 or below declined to 3.1%, which is equivalent to the 3.3% rate for the benchmportfolio. Again, we believe that these large firms have taken advantage of the lax credit environmento keep all but the weakest companies afloat. The market has been searching for yield over the pastthree years, which has allowed these companies to refinance maturing obligations despite, in somecases, extremely weak credit metrics. For example,Momentive Performance Materials LLC(ratings

withdrawn) was able to refinance its entire capital structure in 2012 and 2013, despite totaldebt/EBITDA of over 12x throughout that period. Momentive filed for bankruptcy protection in

April 2014. The same is true forEnergy Future Holdings Corp.(ratings withdrawn), which also filfor bankruptcy in April 2014. Other companies owned by these 14 PE firms have been able torefinance their debt and avoid default despite being rated Caa1 or below.

During the six-year period 2008-13, the annualized and cumulative default rates for companies owby the top 14 PE firms are very similar to those for the benchmark portfolio. Larger differences in tdefault rate by rating category are also noted. This data is summarized in Exhibit 1.

EXHIBIT 1

Average Annual Default Rates*Top 14 PE Firms versus Benchmark**

2008-09 2010-13 2008-13

Rating*** Benchmark Top 14 Benchmark Top 14 Benchmark Top

B 5.5% 8.7% 0.5% 0.1% 1.8% 2.

Caa-C 31.9% 18.3% 9.8% 6.5% 16.4% 9.

B1 or below 13.9 12.8 3.3 3.1 6.4 6.Notes:

*Average annual default rates using monthly data for ratings and withdrawals; **All US speculative grade nonfinancial issues rated B1 and below

excluding companies owned by the top 14 PE firms;**Estimated senior unsecured rating, typically one notch below the corporate family ratin

Source: Moodys Investors Service
https://www.moodys.com/credit-ratings/Momentive-Performance-Materials-Inc-credit-rating-815006131https://www.moodys.com/credit-ratings/Momentive-Performance-Materials-Inc-credit-rating-815006131https://www.moodys.com/credit-ratings/Momentive-Performance-Materials-Inc-credit-rating-815006131https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Momentive-Performance-Materials-Inc-credit-rating-815006131


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What is a default?

Moodys declaration of a default for a corporate issuer can be triggered by one of three events:

a. a failure to make an interest or principal payment within the grace period allowed under thdebt agreement or indenture;b. a bankruptcy filing or legal receivership by the obligor that will likely cause an interruptionor delay in future interest or principal payments; or

c. a distressed exchange where creditors are offered restructured debt, new debt or a package securities (combination of cash, debt or assets) that materially diminishes the value of theoriginal obligation, and where the execution of this exchange allows the obligor to avoid abankruptcy or a future payment default.

In addition, companies can have several defaults (missed payments or distressed exchanges) beforeeventually filing for or winding up in bankruptcy, liquidation or in an out-of-court restructuring. Wuse the first such event as the default date for that company. For example, if a company has a paymdefault or distressed exchange in 2009 and files for bankruptcy in 2010, we would define it as havin

defaulted in 2009 and only include it with companies that have defaulted in 2009 and not with thothat defaulted in 2010.

Mega-deals performed much worse

While default rates for companies owned by the top 14 sponsors have been in line with those ofsimilarly rated companies, they have been higher for the larger top 14 PE-backed deals that wereinitiated prior to the financial crisis when valuations were elevated and leverage in the capital struct

was high. Specifically, we examined 10 mega-deals, each involving more than $10 billion of debt awhose ownership typically included more than one of the largest 14 PE firms. These mega-deals ha

defaulted at an average annual rate of 17.8% (50% cumulative rate), compared with 6.4% for thebenchmark portfolio, over the past six years. Of the five mega-deal companies that defaulted, Chryswent through bankruptcy,Energy Future Holdings Corp.recently filed for bankruptcy,CaesarsEntertainment Operating Company, Inc.(Caa3 negative) is executing internal asset sales so that onor more parts may survive,Clear Channel Communications Inc.(Caa3 negative) remains highlyleveraged and we believe its capital structure is unsustainable andFreescale Semiconductor Inc.(B2stable) has recovered after a distressed exchange that eliminated a significant portion of its debt. Wehave not found a similar relationship between size and default frequency for non-LBO companies.

During the recovery (2010-13), only four rated LBO transactions exceeded $5 billion in debt. Thesdeals Charter Communications Inc.(Ba3 stable; 2010),Hilton Worldwide Finance LLC(B1 stab2013),Samson Investment Company(B1 stable; 2011) andBMC Software Finance Inc.(B3 stable

2013) continue to perform well. However, we note that BMC was recently downgraded to B3 afits sponsor took a large debt financed dividend in April 2014.

Several of the 10 pre-crisis mega-deals performed quite well during the recession, despite their leverAlltel Communications Inc.(ratings withdrawn) andHCA Holdings Inc.(B1 positive) were notdowngraded in 2008 or 2009. Alltel was sold to a strategic buyer in 2009 and HCA was upgraded tB1 a few months after its IPO in 2011.Hertz Corp.(B1 stable),First Data Corp.(B3 stable) andUnivision Communications Inc.(B3 stable) were negatively affected during the recession, but avoidfalling into distress. Univision and First Data continue to be rated B3 due to high leverage.
https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Clear-Channel-Communications-Inc-credit-rating-820757743https://www.moodys.com/credit-ratings/Clear-Channel-Communications-Inc-credit-rating-820757743https://www.moodys.com/credit-ratings/Clear-Channel-Communications-Inc-credit-rating-820757743https://www.moodys.com/credit-ratings/Freescale-Semiconductor-Inc-credit-rating-809953118https://www.moodys.com/credit-ratings/Freescale-Semiconductor-Inc-credit-rating-809953118https://www.moodys.com/credit-ratings/Freescale-Semiconductor-Inc-credit-rating-809953118https://www.moodys.com/credit-ratings/Charter-Communications-Inc-credit-rating-600045365https://www.moodys.com/credit-ratings/Charter-Communications-Inc-credit-rating-600045365https://www.moodys.com/credit-ratings/Charter-Communications-Inc-credit-rating-600045365https://www.moodys.com/credit-ratings/Hilton-Worldwide-Finance-LLC-credit-rating-823545793https://www.moodys.com/credit-ratings/Hilton-Worldwide-Finance-LLC-credit-rating-823545793https://www.moodys.com/credit-ratings/Hilton-Worldwide-Finance-LLC-credit-rating-823545793https://www.moodys.com/credit-ratings/Samson-Investment-Company-credit-rating-823075113https://www.moodys.com/credit-ratings/Samson-Investment-Company-credit-rating-823075113https://www.moodys.com/credit-ratings/Samson-Investment-Company-credit-rating-823075113https://www.moodys.com/credit-ratings/BMC-Software-Finance-Inc-credit-rating-823523571https://www.moodys.com/credit-ratings/BMC-Software-Finance-Inc-credit-rating-823523571https://www.moodys.com/credit-ratings/BMC-Software-Finance-Inc-credit-rating-823523571https://www.moodys.com/credit-ratings/Alltel-Communications-Inc-credit-rating-820637483https://www.moodys.com/credit-ratings/Alltel-Communications-Inc-credit-rating-820637483https://www.moodys.com/credit-ratings/HCA-Inc-credit-rating-809885877https://www.moodys.com/credit-ratings/HCA-Inc-credit-rating-809885877https://www.moodys.com/credit-ratings/HCA-Inc-credit-rating-809885877https://www.moodys.com/credit-ratings/Hertz-Corporation-The-credit-rating-809026435https://www.moodys.com/credit-ratings/Hertz-Corporation-The-credit-rating-809026435https://www.moodys.com/credit-ratings/Hertz-Corporation-The-credit-rating-809026435https://www.moodys.com/credit-ratings/First-Data-Corporation-credit-rating-820324458https://www.moodys.com/credit-ratings/First-Data-Corporation-credit-rating-820324458https://www.moodys.com/credit-ratings/First-Data-Corporation-credit-rating-820324458https://www.moodys.com/credit-ratings/Univision-Communications-Inc-credit-rating-820057116https://www.moodys.com/credit-ratings/Univision-Communications-Inc-credit-rating-820057116https://www.moodys.com/credit-ratings/Univision-Communications-Inc-credit-rating-820057116https://www.moodys.com/credit-ratings/First-Data-Corporation-credit-rating-820324458https://www.moodys.com/credit-ratings/Hertz-Corporation-The-credit-rating-809026435https://www.moodys.com/credit-ratings/HCA-Inc-credit-rating-809885877https://www.moodys.com/credit-ratings/Alltel-Communications-Inc-credit-rating-820637483https://www.moodys.com/credit-ratings/BMC-Software-Finance-Inc-credit-rating-823523571https://www.moodys.com/credit-ratings/Samson-Investment-Company-credit-rating-823075113https://www.moodys.com/credit-ratings/Hilton-Worldwide-Finance-LLC-credit-rating-823545793https://www.moodys.com/credit-ratings/Charter-Communications-Inc-credit-rating-600045365https://www.moodys.com/credit-ratings/Freescale-Semiconductor-Inc-credit-rating-809953118https://www.moodys.com/credit-ratings/Clear-Channel-Communications-Inc-credit-rating-820757743https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Energy-Future-Holdings-Corp-credit-rating-820590323


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Default rates vary among PE firms

Not all of the 14 private equity firms exhibited similar default rates. In 2008-13, portfolio companiof Cerberus, Apollo and TH Lee had the highest average annual default rates among the 14 firms,

while those of Madison Dearborn, KKR, Providence Equity Partners and Blackstone had the lowes

During the recession, Apollo and TH Lee had the highest default rate by a wide margin, whileCerberus and Welsh Carson had the highest default rate by far during the recovery.

EXHIBIT 2

Average annual Default Rate for The Top 14 FirmsRanked by 2008-13 Default RateTop 14 Sponsors 2008-09 2010-13 2008-1

Cerberus 18.7% 16.4% 15.9%

Apollo 32.0% 4.5% 12.9%

TH Lee 26.6% 0.0% 7.8%

Warburg 8.1% 2.6% 6.6%

Welsh Carson 0.0% 11.4% 6.2%

Bain 15.3% 2.8% 6.1%

Average 12.8 3.1 6.0Goldman Sachs 17.6% 1.4% 5.6%

Carlyle 9.9% 3.1% 5.3%

JPMorgan 0.0% 8.7% 5.0%

TPG 10.1% 1.8% 3.8%

Blackstone 8.8% 1.3% 3.1%

Providence 10.7% 0.0% 3.1%

KKR 3.0% 2.6% 2.9%

Madison Dearborn 4.8% 0.0% 1.5%


The vast majority of defaults (53 of 55) occurred among the deals structured prior to the financialcrisis. Therefore, in Exhibit 3 on the next page, we focus on the default rate for these firms, includionly the 188 companies they bought before the crisis. The table shows the number of transactions feach firm, the number of defaults and the number of companies still rated B3 negative or lower.

We expect that some of these low-rated companies may eventually default, raising the sponsorsultimate default rate. This analysis does not factor in ratings, because we wanted to focus on thebehavior of each sponsor. We believe these large sponsors establish the capital structures of theircompanies based on what the markets will bear, not on the ratings we assign. Hence, this analysis isa better indicator of the aggressiveness of each firm.

Apollo and Cerberus have the highest percentage of companies that have had a default, well above tother 12 firms. For Apollo, when you include the low-rated companies, the rate rises above 85%. TLee, Bain and Warburg Pincus are also above the average. However, including low-rated companiedoes not change their relative ranking. TPG and Providence are the only firms below the average

where including low-rated companies significantly changes their rankings. KKR and MadisonDearborn are the firms with the lowest percentage of companies that have had a default by a widemargin.


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EXHIBIT 3

Rates of Default and Low-Rated Companies by PE FirmDeals Structured Prior to the Financial Crisis

PE Firm Deals Defaults Low Rated DefaultsDefaulLow Ra

Apollo 21 12 6 57% 8Cerberus 6 3 0 50% 5

TH Lee 13 5 1 38% 4

Bain 23 7 2 30% 3

Warburg Pincus 14 4 1 29% 3

JP Morgan 8 2 1 25% 3

Goldman Sachs 21 5 2 24% 3

Welsh Carson 13 3 0 23% 2

Carlyle 32 7 0 22% 2

TPG 20 4 4 20% 4

Providence Equity 11 2 2 18% 3

Blackstone 23 4 1 17% 2Madison Dearborn 9 1 0 11% 1

KKR & Co 20 2 1 10% 1

Eliminations* (46) (8) (4)

Total 188 53 17 28 3*Eliminations due to multiple firms involved in the same transaction


Included in the defaults above are some distressed exchanges that involved a small portion of theoutstanding debt (less than 10%), and the companys rating has subsequently gone above B3 (i.e., tchance of default is now much lower). These small distressed exchanges resulted in unusually highrecovery rates (greater than 95%) for debtholders and were excluded from the Ultimate Recovery

Database (URD).6

Of the 53 defaults among the top 14 firms, seven companies had distressedexchanges with very high recoveries and their ratings subsequently improved. These seven companiwere concentrated among three firms: Apollo had four (Berry Plastics, Noranda Aluminum, QualitDistribution and RBS Global); Bain had two (Bloomin Brands and Sensata Technologies); and WeCarson had one (Ozburn-Hessey Holding Company).

Exhibit 4, below, adjusts the default rates in the prior chart to exclude these seven companies. WhilApollos ranking falls, it remains among the top three firms in terms of percentage of defaults. Baindrops below the average, while JP Morgans and Goldman Sachs rise above as the average is lower(24% versus 29% previously). Finally, Welsh Carson falls much closer to Madison Dearborn andKKR.

6 Moodys Ultimate Recovery Database includes more than 1,000 defaults from 1988 through the present, but only includes companies for which there is sufficient pu

information to estimate a recovery rate for debtholders.


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EXHIBIT 4

Adjusted Defaults and Low-Rated Companies by Private Equity FirmDeals Structured Prior to the Financial Crisis

Private Equity Firm Deals DefaultsHigh Recovery

DEsAdj.

DefaultsDefaults

(%)Low

RatedDefault

Low Rated

Cerberus 6 3 0 3 50% 0 5TH Lee 13 5 0 5 38% 1 4

Apollo 21 12 (4) 8 38% 6 6

Warburg Pincus 14 4 0 4 29% 1 3

JP Morgan 8 2 0 2 25% 1 3

Goldman Sachs 21 5 0 5 24% 2 3

Carlyle 32 7 0 7 22% 0 2

Bain 23 7 (2) 5 22% 2 3

TPG 20 4 0 4 20% 4 4

Providence Equity 11 2 0 2 18% 2 3

Blackstone 23 4 0 4 17% 1 2

Welsh Carson 13 3 (1) 2 15% 0 1Madison Dearborn 9 1 0 1 11% 0 1

KKR & Co 20 2 0 2 10% 1 1

Eliminations* (46) (8) 0 (8) (4)

Total 188 53 (7) 46 24% 17 3

*Eliminations due to multiple firms involved in the same transaction Source: Moodys Investors Service

We also note that these 14 firms were very active in pursuing distressed exchanges from 2008-13,accounting for 20 of the 30 LBO distressed exchanges that occurred. During the recession, LBOdefaults showed a large increase in the percentage of pre-packaged bankruptcies and distressedexchanges. However, when you exclude the top 14 firms, the remaining LBOs did not exhibit any

increase in the percentage of distressed exchanges, as shown in Exhibit 5. These top 14 firms havecontinued to pursue distressed exchanges during the recovery; distressed exchanges have accounted a third of all their defaults. Distressed exchanges enabled these firms to reduce debt while retaining or the majority of, their equity in a company. We note that the URD includes only 44 of the 55defaults in our study, as it excludes high recovery distressed exchanges and other defaults where the

was insufficient public information to determine a recovery value for all debtholders.

EXHIBIT 5

Default by Type for Top 14, LBOs and Non-LBOs

1988 - Present

All LBOs except Top 14 Sponsors Top 14 Sponsors

2008-09 2010-13 2008-09 2010-13

LBOsNon

LBO's Defaults% of

Total Defaults% of

Total Defaults% of

Total Defaults T

Regular Bankruptcy 44% 64% 17 37% 8 38% 7 22% 3

Prepackaged Bankruptcy 35% 20% 21 46% 11 52% 9 28% 5 4

Distressed Exchange 21 16 8 17 2 10 16 50 4 3Total 46 21 32 12

Notes: Data taken from the Ultimate Recovery Database, which includes information on over 1,000 defaults from 1988 to the present. The URD

includes companies for which there is sufficient public information to assess a recovery value for all debtholders and excludes distressed excha

where there is greater than a 95% recovery value.



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Better-performing companies lever up again via dividends

The lax credit environment during 2010-13 resulted in a large number of dividends by companiesowned by the top 14 PE firms. Thirty-seven, or 27%, of the 135 companies owned by these firms t

we initially rated after the recession (2010-13) have since taken dividends. This is higher than durin

the bubble era of 2004-07, when less than 24% of the companies owned by these PE firms issueddividends. When the analysis is expanded to include all 303 companies owned by these firms durin2010-13, 69 of these companies issued dividends.

Among the top 14 PE firms, five took dividends in a third or more of their deals: Goldman Sachs,Bain, TH Lee, Welsh Carson and Warburg Pincus. Prior to the financial crisis, the top five firms thtook the highest percentage of dividends were Welsh Carson, Providence Equity, TH Lee, Cerberuand Apollo. While some names remain the same, Apollo had the biggest change in ranking, fallingfrom the top five pre-crisis to the most conservative with regard to dividends during 2010-13. Whithis may be partly due to the large number of low-rated companies Apollo was managing in the post-crisis timeframe, clearly the firm was being less aggressive in terms of dividends. However, when Apoldid take dividends, in three of the four deals it did so within one year of the initial rating.

Bain and TH Lee had the most aggressive dividend policies during the recovery, as they had the larpercentage of dividend deals and a large number of deals where at least 75% of the initial equity wataken out. Of course, the ability to extract dividends is affected by the underlying performance of thsponsored issuers, so a higher dividend rate may be indicative of strong performance at certainsponsored companies.

EXHIBIT 6

Dividends by PE Firm from 2010-13

PE Firm Deals Dividends (1)Dividend

Deals (%)Large

Dividends (2)Large

Dividends (%)Dividends

< 1 yr (3)Divide< 1 yr

Goldman Sachs 28 11 39% 2 18% 2 1

Bain 35 13 37% 5 38% 1

TH Lee 19 7 37% 2 29% 0

Welsh Carson 15 5 33% 1 20% 0

Warburg Pincus 24 8 33% 0 0% 2 2

TPG 40 10 25% 3 30% 1 1

Carlyle 43 10 23% 5 50% 3 3

Cerberus 9 2 22% 1 50% 1 5

Blackstone 34 7 21% 2 29% 1 1

Madison Dearborn 16 3 19% 1 33% 1 3

JP Morgan 12 2 17% 1 50% 0

Providence Equity 18 3 17% 0 0% 1 3

KKR & Co 31 5 16% 2 40% 0

Apollo 36 4 11% 1 25% 3 7

Eliminations(4) (57) (21) (5) (2)

Total 303 69 23 21 30 14 2Notes: 1. Refers to the number of deals where dividends were financed with additional debt; several of these firms took more than one dividend;

2. Cumulative dividends amounted to more than 75 % of the initial equity used to finance the deal; 3 . Debt-financed dividend within 1 year of

initial rating; 4. Eliminations due to multiple firms involved in the same transaction



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Since most dividends were paid following the recession when default rates were low and companieswere performing well, the top 14 private equity-backed companies that took out dividends had arelatively low cumulative default rate over the past six years. PE-backed companies that provideddividends to their sponsors defaulted at a 6% cumulative rate over the past six years, much lower ththe 35% rate for the benchmark portfolio. Even including companies that issued dividends prior to

financial crisis, only five have defaulted.

This lower default rate makes sense. Companies that are capable of paying dividends to equity holdtypically have performed well and these dividends were paid when default rates were low. Howeverthese dividends are usually funded with debt, increasing leverage, which could put the company atgreater risk of default in the event of an economic downturn or other exogenous event that negativeaffects its performance for a sustained period.

Another possible contributor to the high rate of debt-financed dividends is an increase in privateequity ownership periods, which is the time that a PE firm holds a portfolio company before exitinthrough a sale or IPO. In lieu of realizing a return through an exit, many PE firms extracted returnsthrough dividends, perhaps waiting for higher exit valuations.

There were more than a dozen debt-financed dividends after the sponsor had sold off a portion of tcompany via an IPO. In the past, this type of dividend was unusual due to the leakage, or theproportion of cash that did not go to the PE firm or its associates in the initial deal.

IPOs augur higher ratings

IPOs are typically considered credit positive for LBOs, but they do not often result in a rating chanbecause proceeds can bypass the company and go directly to the sponsor or sponsors. In someinstances, IPO proceeds are used to repay debt, which can result in an upgrade. In 2010-13, only 163 upgrades of PE-owned companies, or 17%, were the direct result of an IPO or had an IPO cited

a factor contributing to the upgrade.

Nevertheless, of the 78 PE-backed companies in our sample that have had IPOs, more than 60% arrated more highly today than they were prior to their IPOs. The majority of these upgrades occurre

within a year or two after the IPO, as the company continued to perform well and repaid debt.

These 78 companies also exhibited a lower probability of default after completing their IPOs. Of th78, only one defaulted after its IPO:SemGroup L.P.(rating withdrawn). However, two of the 78 arated B3 negative or lower, indicating an elevated probability of default:Caesars EntertainmentOperating Company, Inc.(Caa3 negative) andEducation Management LLC(Caa1 stable).

Private equity deals get more downgrades7

and fewer upgrades in the recoveryWhile private equity firms have managed to keep default rates for sponsored companies in line withthose of the benchmark portfolio, rating trends for these sponsored companies suggest a modest

weakening of credit quality during the recovery. In the weak economic recovery and lax creditenvironment of the past few years, a number of sponsor-owned companies have underperformedexpectations or increased leverage to finance dividends or acquisitions, limiting any upside to their

7 Downgrades and upgrades refer to changes in the corporate family rating only.
https://www.moodys.com/credit-ratings/SemGroup-Corporation-credit-rating-822278910https://www.moodys.com/credit-ratings/SemGroup-Corporation-credit-rating-822278910https://www.moodys.com/credit-ratings/SemGroup-Corporation-credit-rating-822278910https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Education-Management-LLC-credit-rating-809410850https://www.moodys.com/credit-ratings/Education-Management-LLC-credit-rating-809410850https://www.moodys.com/credit-ratings/Education-Management-LLC-credit-rating-809410850https://www.moodys.com/credit-ratings/Education-Management-LLC-credit-rating-809410850https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/Caesars-Entertainment-Operating-Company-Inc-credit-rating-820743097https://www.moodys.com/credit-ratings/SemGroup-Corporation-credit-rating-822278910


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ratings and leaving them at greater risk of default in the event of a future tightening of marketliquidity.

When we examine all the companies owned by the top 14 PE firms that were rated during 2010-13the number of downgrades is actually greater than the number of upgrades. The vast majority of th

downgrades were due to sponsored companies failing to meet expectations for improving financialperformance. This increase in the number of downgrades mostly affected deals initially rated in the2010-12 period, as deals rated prior to 2010 actually saw more upgrades than downgrades (see analversus the benchmark portfolio, below). None of the deals initially rated in 2013 were upgraded ordowngraded.

The table below shows the number of upgrades and downgrades for each PE firm in 2010-13 and fthe earlier 2008-09 period. We think this is more helpful as the data for 2010-13 shows a greatervariation in performance by firm. In the 2008-09 period, the downgrade rates are consistent with thfirms showing the highest default rates in the first section of this report. Some firms like Apollo,Carlyle and Bain, whose companies had a large number of downgrades during the recession, receivelarge number of upgrades in the recovery; others, like Cerberus, Goldman Sachs and TPG, did not

PE firms that did not get a large number of downgrades in the recession also saw fewer upgradesduring the recovery.

Apollo saw almost three times more upgrades than downgrades (its up/down ratio was 2.8x) andMadison Dearborn saw two times more upgrades than downgrades. These two firms ratios weresubstantially higher than those of Providence, Goldman, Cerberus, KKR and TPG, which had thelowest upgrade to downgrade ratios. The downgrades of companies owned by these firms were for tmost part triggered by weaker-than-anticipated performance during the recovery (Providence andCerberus, 100%; KKR, 85%; Goldman, 80%; TPG; 69%). TPG saw the highest number ofdowngrades related to dividends (3). For all 14 firms, the reasons for downgrades during the recove

were as follows: 81% due to performance, 16% due to dividends and 3% related to acquisitions.

During the recession, the firms that had the majority of their companies downgraded were Apollo,Cerberus and Carlyle. Three of the four firms with the highest percentage of downgrades also had thighest percentage of defaults.8Carlyle, along with TPG and Madison Dearborn, were unusual in tthey had a relatively high percentage of downgrades, but much lower percentages of defaults.

8 Per Exhibit 3


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EXHIBIT 7

Ratings Migration by PE FirmFrom 2010-13 and From 2008-09

PE Firm

Ratings Movement 2010-13

Deals UP DOWN Up/Down Ra

Apollo 36 14 5

Madison Dearborn 16 2 1

Bain 35 11 6

TH Lee 19 3 2

Warburg Pincus 24 7 5

Carlyle 43 13 10

Blackstone 34 8 7

JP Morgan 12 3 4

Welsh Carson 15 2 3

TPG 40 7 12

KKR & Co 31 4 7

Cerberus 9 1 2

Goldman Sachs 28 5 10

Providence Equity 18 2 5


Total 303 64 73

PE Firm

Ratings Movement 2008-09Deals UP DOWN Do

Apollo 22 - 16 7

Cerberus 6 2 4 6

Carlyle 33 2 18 5

Bain 25 3 12 4

Goldman Sachs 22 2 10 4

TPG 20 1 9 4

Madison Dearborn 9 - 4 4

TH Lee 14 - 6 4

JP Morgan 9 - 3 3

Providence Equity 12 2 4 3

Warburg Pincus 15 - 5 3

Blackstone 27 1 7 2

KKR & Co 21 3 5 2

Welsh Carson 13 - 3 2


Total 200 14 86 4

*Eliminations due to multiple firms involved in the same transaction


We also examined the performance of these sponsored companies against the benchmark portfolio.this analysis, we had to examine how the ratings of a specific set of companies evolved from 1 Janua2010 through the end of 2013. Of the 337 companies in our study, 150 were rated on 1 January2010; in the benchmark portfolio, 784 companies were rated on that date. As shown in Exhibit 8,


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below, the downgrade rate for the sponsored companies was 27%, slightly higher9than the 23% rafor the benchmark portfolio. Similarly, 29% of sponsored companies were upgraded during 2010-1compared with 34%9for the benchmark portfolio. Consequently, sponsored firms have had a muchlower measured net upgrade rate (11% versus 2%). One reason upgrades are limited among sponsocompanies is that the potential for acquisitions or dividend payouts to shareholders tends to cap ou

ratings on companies owned by these firms at B1 or Ba3 until there is an IPO.

A similar comparison during the recession showed that the rates for these sponsors firms and thebenchmark portfolio were very close,9with a 44% downgrade rate for the sponsored firms versus 43for the benchmark portfolio, and an upgrade rate of just 8% for these sponsored firms compared w12% for the benchmark portfolio. During both periods (2008-09 and 2010-13), the majority of thupgrades and downgrades were due to changes in financial performance and not events such asdividends, acquisitions or IPOs.

EXHIBIT 8

Ratings Migrations for Top 14 PE Firms Versus the Benchmark Portfolio

2008-09

No. ofCompanies

Downgrades Upgrades Up/Down

Number % Number %

Benchmark Portfolio 985 423 42.9% 115 11.7%

Top 14 PE Firms 181 79 43.6% 15 8.3%

2010-13

No. ofCompanies

Downgrades Upgrades Up/Down

Number % Number %

Benchmark Portfolio 784 183 23.3% 263 33.5%

Top 14 PE Firms 150 40 26.7% 43 28.7%


Private equity defaults have similar firm-wide ultimate recovery rates

As we have shown in prior research,10there is no correlation between firm-wide ultimate recovery rand a firms leverage prior to default. Our research shows that the high leverage of LBOs, on averagdoes not translate into significantly lower investor recoveries in the event of default. LBOs haveexhibited a greater use of prepackaged bankruptcies and a slightly higher use of distressed exchangePrepackaged bankruptcies have a slightly higher firm-wide recovery rate than do regular bankruptci

which offsets the slightly lower firm-wide recoveries for LBOs in regular bankruptcies. Distressedexchanges have higher firm-wide recovery rates than do prepackaged or regular bankruptcies; howevcompanies may experience multiple distressed exchanges before ultimately filing for bankruptcy (e.g

Energy Futures Holding Corp.). In these cases, firm-wide recoveries may actually end up significanlower.

9 While these rates are different, the differences are not statistically significant using a 95% confidence interval (t-statistic of over 2.0).10 SeeLessons from 200 LBO Defaults,June 2012.
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142361http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142361http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142361http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142361


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Moodys follows these subsequent defaults and has published prior research on this topic.11Accordto an updated data-set of defaulted LBOs, which we will discuss in more detail in an upcoming specomment, 224 defaulted LBOs had an average firm-wide recovery rate of 55.2%, compared with54.7% for 822 defaulted non-LBOs from 1988 through the first quarter of 2014.

Defaults likely ahead for a core group of weak companies

For some sponsored companies, distressed exchanges bought time to strengthen balance sheets andboost credit quality enough to receive rating upgrades, and they remain on solid ground. Others thcompleted a distressed exchange during the financial crisis eventually filed for bankruptcy or had afollow-on distressed exchange. A smaller group of companies continue to operate with very weak crmetrics and many have capital structures that we view as unsustainable. We expect most of thesecompanies to file for bankruptcy or restructure over the next two to four years, barring a majoreconomic upturn that would allow them to generate meaningful organic growth.

To date, these weaker companies have been unable to generate sustainable positive earnings or cash

flow. However, they have stayed afloat through covenant-lite structures that have limited creditorsability to intervene and with the aid of liquidity that yield-hungry investors have poured into the hiyield bond and loan markets. These conditions will not remain in place indefinitely.

These companies have spent most of the past five years with deeply speculative-grade corporate famratings of Caa1 or below. Companies in this category include mega-deals Clear Channel and Caesaas well asBuilders FirstSource Inc.(Caa1 stable). We note that EFH and Momentive PerformanceMaterials, which were part of this group, both filed for bankruptcy protection in April. Two of thescompanies (Caesars and Clear Channel) have undertaken distressed exchanges that have lowered thoutstanding debt. We treated these distressed exchanges as default events, but the private equitysponsor remains in control of the company.Travelport(Caa1 stable) andGuitar Center(B3, stable

were also part of this group, but in 2014, they both had distressed exchanges that greatly reduced th

sponsors ownership and resulted in a ratings upgrade.

In some cases, sponsors have provided meaningful capital infusions that have been used to facilitateacquisitions (Expert Global Solutions, McJunkin Red Man, Packaging Dynamics Corp. and LoradPetroleum) or reduce debt (Trinseo and Frontier Drilling), but most capital infusions have been mato avoid covenant violations.

Covenant-lite loans and bonds with weak protections

Covenant-lite loans enabled many sponsored firms to survive the recession because they could greatunderperform projections without financial penalty or intervention by creditors. The larger buyoutdeals were more likely to include covenant-lite loans in their financing, leaving creditors with fewer

protections for their investments in highly leveraged companies. Apollo and TPG had the largestnumber of covenant-lite loans in our study.

Similarly, many of the sponsored companies issued bonds with weak investor protections. Ourcovenant quality (CQ) scores, which assess the strength of bond covenants, tend to be weaker forbonds issued by the portfolio companies of the larger PE firms, compared with those issued bycompanies owned by the smaller PE firms. Goldman and TH Lee tended to have the strongest CQ

11 SeeLessons from 25 Years of Chapter 22 LBO Defaults,November 2012.
https://www.moodys.com/credit-ratings/Builders-FirstSource-Inc-credit-rating-807392172https://www.moodys.com/credit-ratings/Builders-FirstSource-Inc-credit-rating-807392172https://www.moodys.com/credit-ratings/Builders-FirstSource-Inc-credit-rating-807392172https://www.moodys.com/credit-ratings/Travelport-LLC-credit-rating-809606395https://www.moodys.com/credit-ratings/Travelport-LLC-credit-rating-809606395https://www.moodys.com/credit-ratings/Travelport-LLC-credit-rating-809606395https://www.moodys.com/credit-ratings/Guitar-Center-Inc-credit-rating-600019981https://www.moodys.com/credit-ratings/Guitar-Center-Inc-credit-rating-600019981https://www.moodys.com/credit-ratings/Guitar-Center-Inc-credit-rating-600019981https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_147863https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_147863https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_147863https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_147863https://www.moodys.com/credit-ratings/Guitar-Center-Inc-credit-rating-600019981https://www.moodys.com/credit-ratings/Travelport-LLC-credit-rating-809606395https://www.moodys.com/credit-ratings/Builders-FirstSource-Inc-credit-rating-807392172


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scores during the 2011-2013 period with average scores below 3.5, whereas Cerberus, Bain, KKR,Blackstone and TPG had the weakest, with average scores above 4.0. The CQ scores are presented five-point scale, with 5.0 denoting the weakest investor protections and 1.0, the strongest.

EXHIBIT 9

Average CQ Scores by Top 14 Private Equity Sponsors

PE Firm 2011 2012 2013Historical Av

(Jan. '11 to date

Cerberus NA 4.31 NA 4.3

Bain 4.14 4.24 3.86 4.1

KKR 3.99 4.19 3.94 4.0

Blackstone 3.79 3.96 4.33 4.0

TPG 3.86 3.93 4.19 4.0

Carlyle 4.15 4.01 3.88 3.9

Apollo 3.95 3.87 3.90 3.9

Welsh Carson NA NA 3.83 3.8

Providence Equity Partners 3.38 NA 3.85 3.7JP Morgan 3.88 3.65 3.82 3.7

Warburg Pincus 3.38 3.32 3.86 3.6

Madison Dearborn 3.46 3.73 NA 3.6

Average for All PE Sponsored Deals 3.41 3.59 3.79 3.6Goldman Sachs 3.25 3.58 3.30 3.4

TH Lee 3.25 3.37 3.45 3.3

"NA" indicates that there are no CQ scores for that particular PE Sponsor and year.

Source: Moody's High-Yield Covenant Database

Exits from pre-crisis deals have been slow

Of the 190 pre-crisis deals in our study, roughly 40% are still owned by their original sponsor. Thisreflects many deals that experienced some distress during the recession and have been slow to recovlimiting options for an IPO or sale. For deals where the private equity firm was able to exit, roughlhalf were sold to a strategic buyer, roughly 30% had initial public offerings and 20% were sold toanother PE firm in a secondary buyout. The number of exits via secondary buyouts has increasedsignificantly in the past two years. This is also true for newly-rated deals. In 2012 and 2013, more t40% of the newly-rated deals sponsored by the top 14 PE firms were secondary buyouts (SBOs). Tis up from less than 20% in 2010 and 2011.


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Appendix A: Companies Owned by the Top 14 Private Equity Firms

Company Name Sponsor(s) DateInitialCFR

LastCFR Date Comment

Pre Crisis Deals (Deals structured prior to 1/1/2008)

1 3217920 Nova Scotia Co. GS Capital, EdgeStone Capital 7/07 B2 Caa2 12/08 D E (12/08)2 Accellent Inc. KKR, Bain Capital 11/05 B2 B3 10/10 Still Owned

3 Aeroflex Inc Golden Gate; GS Capital; Veritas 9/07 B3 B1 12/13 Exiting via IPO

4 Affinion Group, Inc Apollo 10/05 B2 Caa2 12/13 Still Owned; DE (12/13)

5 AGA Medical Welsh Carson 4/06 B2 B3 11/10 Sold to Strategic

6 Aleris International, Inc. TPG 12/06 B2 Caa3 2/09 Chapter 11 (2/09)

7 Alliance Healthcare Services, Inc. KKR 10/99 B1 B1 11/09 Sold to PE

8 Allison Transmission, Inc Carlyle, Onex 7/07 B2 B1 12/13 Exiting via IPO

9 Alltel Communications TPG Inc., GS Capital 11/07 B2 B2 1/09 Sold to Strategic

10 Altegrity Providence Equity 9/07 B3 Caa2 12/13 Still Owned

11 ARAMARK Corp. GS Cap. , JP Morgan, TH Lee, Warburg Pincus 1/07 B1 B1 9/13 Exiting via IPO

12 Arinc Inc. Carlyle 11/07 B3 B2 8/13 Sold to Strategic

13 Astoria Generating Co. Madison Dearborn, US Power Generating Co 2/06 B1 B2 12/13 Still Owned

14 Avago Technologies Finance Pte. Ltd. KKR, Silver Lake 11/05 B2 Baa3 10/11 Exited via IPO

15 Avaya, Inc. Silver Lake, TPG 10/07 B2 B3 12/13 Exiting via IPO

16 AxleTech International Carlyle 10/05 B2 B2 1/09 Sold to Strategic17 Bausch & Lomb Inc. Warburg Pincus 10/07 B2 B2 11/13 Debt Repaid

18 Berry Plastics Corp. Apollo, Graham Partners 6/06 B1 B2 12/13 Exiting via IPO; high recovery DE (4/09

19 Biomet Inc Blackstone, GS Capital, KKR, TPG 5/07 B2 B2 12/12 Still Owned

20 Bloomin Brands/OSI Restaurants Bain , Catterton Partners 6/07 B2 B1 5/13 Exiting via IPO; high recovery DE (3/09

21 Boise Cascade Holdings LLC Madison Dearborn, OfficeMax 10/04 Ba3 B1 11/13 Exited via IPO

22 Bombardier Rec Products, Inc. Bain, Bombardier Family 12/03 B1 B1 12/13 Exiting via IPO

23 Bresnan Communications Providence, Quadrangle 3/06 B2 B1 6/10 Sold to Strategic

24 Broder Brothers Bain 9/03 B1 Ca 5/09 DE (5/09)

25 Builders FirstSource Inc Warburg Pincus, JLL Partners 1/05 B1 Caa1 12/13 Still Owned; DE (9/09)

26 Burlington Coat Factory Warehouse Bain 3/06 B2 B3 12/13 Exiting via IPO

27 Caesar's Entertainment Co. Apollo, TPG 2/08 B2 Caa2 9/13 Still Owned; DEs (1/09 & 4/09)

28 Caribe Media Welsh Carson 3/06 B2 Ca 5/11 Chapter 11 (5/11)

29 Catalent Pharma Solutions Blackstone 4/07 B2 B2 12/13 Still Owned

30 CCS Medical Warburg Pincus 11/05 B3 Caa1 12/08 Chapter 11 (7/09)

31 CDW Corporation Madison Dearborn , Providence Equity 10/07 B3 B1 11/13 Exiting via IPO

32 Centennial Communications Corp. Blackstone, Welsh Carson 1/99 B2 B2 11/09 Sold to Strategic

33 Cequel Communications, LLC GS Capital, Oaktree 4/06 B2 B1 10/12 Sold to PE

34 Ceridian Corp. TH Lee, Fidelity National 10/07 B3 B3 12/13 Still Owned

35 Ceva Group PLC Apollo 11/06 B1 Caa3 5/13 DEs (7/09 & 5/13)

36 Chrysler Automotive, LLC Cerberus 7/07 B3 Ca 4/09 Chapter 11 (4/09)

37 Cinemark USA Inc Madison Dearborn 9/06 B1 B1 3/11 Exited via IPO

38 Claire's Stores, Inc. Apollo 5/07 B3 Caa1 12/13 Still Owned

39 Clear Channel Communications Bain Capital, TH Lee 6/08 B2 Caa2 12/13 Still Owned; DE (3/09)

40 Clondalkin Industries B.V. Warburg Pincus 3/04 B1 B3 12/13 Still Owned

41 CMP Susquehanna Corp. Bain , Blackstone, TH Lee 4/06 B1 Caa1 4/11 Sold to Strategic; DE (4/09)

42 Colt Defense LLC Sciens, Blackstone 8/07 B2 Caa1 3/13 Sold to PE

43 Concentra inc. Welsh Carson 5/07 B1 B2 11/10 Sold to Strategic

44 Cooper Standard Automotive Inc. GS Capital, Cypress 12/04 B1 Ca 7/09 Chapter 11 (7/09)

45 CRC Health Corp. Bain 1/06 B2 B3 12/13 Still Owned46 CVR Energy Inc . GS Capital, Kelso 6/05 B2 B2 6/08 Exited via IPO

47 CW Media Holdings Inc. GS Capital, CanWest Media 7/07 B1 Ba2 12/10 Sold to Strategic

48 DJO Finance LLC Blackstone 10/06 B2 B3 3/13 Still Owned

49 Dollar General Corp. KKR 6/07 B3 Ba1 2/13 Exited via IPO

50 Dollarama Group Holdings L.P. Bain 8/05 B1 Ba2 12/11 Exited via IPO

51 Dunkin' Brands, Inc Bain, Carlyle, TH Lee 2/06 B3 B2 8/12 Exited via IPO

52 Education Management LLC GS Capital, Leeds Equity, Providence Equity 5/06 B2 Caa1 3/13 Exiting via IPO

53 Energy Future Holding Corp. KKR, TPG 2/07 B2 Caa3 8/13 Still Owned; DEs (8/10 & 12/12)

54 Euramax International, Inc. GS Capital 6/05 B1 Ca 7/09 DE (7/09)

continued on next page


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continued from previous page



55 Expert Global Solutions, Inc. JP Morgan (One Equity Partners) 7/06 B2 B2 12/13 Still Owned

56 First Data Corp GS Capital, KKR, Citigroup, Credit Suisse, DeutscheBank, HSBC

9/07 B2 B3 10/13 Still Owned

57 Foamex International Inc GS Capital, DE Shaw, Sigma 12/06 B2 Ca 2/09 Chapter 11 (2/09)

58 Freedom Communications, Inc. Blackstone, Providence Equity 2/04 Ba3 Caa3 7/09 DE (9/09)

59 Freedom Group, Inc. Cerberus 5/07 B2 B1 12/13 Still Owned

60 Freescale Semiconductor Inc Blackstone, Carlyle, Permira Funds, TPG 11/06 Ba3 B2 10/13 Exiting via IPO; DE (3/09)

61 Frontier Drilling Carlyle/ Riverstone, DLJ Merchant Banking 5/05 B3 Caa2 10/10 Sold to Strategic

62 Gabriel Communications Finance Co. KKR 10/05 B3 B2 2/10 Sold to Strategic

63 Genoa Healthcare Group, LLC Warburg Pincus 7/05 B2 B2 2/12 Sold to PE

64 Global A&T Electronics Ltd. TPG, Affinity Equity 10/07 B1 Caa1 12/13 Still Owned

65 Global Tel*Link Corp. GS Capital 12/06 B1 B2 12/11 Sold to PE

66 Gold Toe Moretz Holdings, Corp. Blackstone 10/06 B2 Caa2 4/11 Sold to Strategic

67 Graham Packaging Company, L.P. Blackstone 1/98 B1 B2 4/11 Sold to Strategic

68 Graphics Packaging International Inc. TPG , Coors Family, CD&R, Old Town, Public 6/06 B1 Ba2 8/13 Exited via IPO

69 Great Lakes Dredge & Dock Madison Dearborn 12/03 B1 B3 8/09 Exited via IPO

70 Grohe Holding GmbH TPG, DLJ Merchant Banking 9/04 B1 B2 9/13 Sold to Strategic

71 Guitar Center Holdings, Inc. Bain 10/07 B3 Caa2 12/13 Still owned; high recovery DE( 2/11); D(3/14)

72 Hanley-Wood LLC JP Morgan, Wasserstein & Co 8/05 B2 Ca 1/12 DE (1/12)

73 Hawaiian Telcom Communications, Inc. Carlyle 4/05 B1 Caa3 9/08 Chapter 11 (9/08)

74 Hawker Beechcraft Acq. Co. LLC GS Capital, Onex 3/07 B2 Ca 5/12 DE (4/09); Chapter 11 (5/12)

75 HCA Inc Bain , KKR, Merrill Lynch 11/06 B2 B1 11/13 Exited via IPO

76 HCR Healthcare LLC Carlyle 7/07 B2 B3 12/13 Still Owned

77 HD Supply, Inc. Carlyle, Bain, and CD& R 9/07 B2 B3 6/13 Exiting via IPO

78 Hertz Corp, Carlyle, CD&R, Merrill Lynch 12/05 Ba3 B1 12/11 Exited via IPO

79 Hughes Network Systems, LLC Apollo 5/05 B1 B1 6/11 Sold to Strategic

80 IAP Worldwide Services, Inc. Cerberus 3/05 B1 Caa3 7/08 DE (7/08)

81 IASIS Healthcare Corp. TPG , JLL, Trimaran 6/04 B1 B2 12/13 Still Owned

82 Innophos Holdings Inc Bain 8/04 B1 Ba3 12/08 Exited via IPO

83 Insight Midwest Holdings, LLC Carlyle 12/05 B1 B1 2/12 Sold to Strategic

84 Integra Telecom, Inc. Warburg Pincus 7/07 B3 Caa1 11/09 Pmt Default (5/09); DE (11/09)

85 Intergraph Corp. TPG , Hellman & Friedman, JMI Equity 11/06 B2 B2 12/10 Sold to Strategic86 ITC^DeltaCom, Inc. Welsh Carson 7/07 B3 B3 10/10 Sold to Strategic

87 J. Crew Group, Inc. TPG 10/97 B2 Ba1 9/10 Exited via IPO

88 Jacuzzi Brands Corp. Apollo 2/07 B2 Ca 8/13 DEs (1/10 & 7/13)

89 John Maneely Co Carlyle 3/06 B1 B2 2/11 Sold to Strategic

90 KAR Auction Services, Inc. GS Capital, Kelso, Parthenon, ValueAct 3/07 B2 B1 11/13 Exited via IPO

91 Kerasotes Showplace Theatres LLC Providence Equity 10/04 B1 B2 7/10 Sold to Strategic

92 Keystone Automotive Operations Inc. Bain 10/03 B1 Ca 1/12 DE (1/12)

93 Kraton Polymers LLC TPG, JP Morgan 12/03 B1 B1 4/11 Exited via IPO

94 Laureate Education, Inc KKR 6/07 B2 B2 12/13 Still Owned

95 LifeCare Holdings Carlyle 8/05 B2 Caa3 12/12 DE (12/08); Chapter 11 (12/12)

96 Linens 'n Things Inc. Apollo, NRDC Real Estate 1/06 B3 Ca 5/08 Chapter 11 (5/08)

97 Local Insight Regatta Holdings, Inc Welsh Carson 11/07 B1 Ca 11/10 Chapter 11 (11/10)

98 Marquee Holdings Apollo, Bain, Carlyle, Spectrum 7/04 B1 B2 5/12 Sold to Strategic

99 Masonite Corp. KKR 2/05 B2 Ca 3/09 Chapter 11 (11/08)

100 McJunkin Red Man Corp. GS Capital 1/07 B1 B1 10/12 Exiting via IPO

101 Metals USA, Inc. Apollo 11/05 B1 B1 5/13 Sold to Strategic

102 MetoKote JP Morgan 7/02 B1 B3 7/12 Debt Repaid

103 Michaels Stores Inc. Bain Capital, Blackstone 9/06 B2 B2 12/13 Still Owned

104 Mobile Mini Welsh Carson 7/06 B2 B2 6/08 Sold to Strategic

105 Momentive Performance Materials Inc. Apollo 12/06 B3 Caa2 12/13 Still Owned at 12/13; DE (4/09); Chapt(4/14)

106 Momentive Specialty Chemicals Inc. Apollo 8/04 B2 B3 12/13 Still Owned; high recovery DE (4/09)

107 Multiplan, Inc. Carlyle 3/06 B2 B2 7/10 Sold to PE



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108 Neiman Marcus Group Inc TPG , Warburg Pincus 9/05 B1 B2 9/13 Sold to PE

109 NewPage Corp, / Escanaba Timber LLC Cerberus 4/05 B2/B3 Caa3 9/11 Chapter 11 (9/11)

110 Newport Television Holdings Providence Equity 4/08 B2 Caa1 7/12 Sold to Strategic; DEs (6/09 & 2/10)111 Nielsen Holdings N.V. AlpInvest, Blackstone, Carlyle, H&F, KKR, TH Lee 5/06 B1 Ba3 2/11 Exited via IPO

112 Niska Gas Storage Carlyle/Riverstone 4/06 Ba3 B1 12/13 Exiting via IPO

113 Noranda Aluminum Holding Corp. Apollo 4/07 B1 B2 12/13 Exiting via IPO; high recovery DE (4/09

114 NTK Holdings, Inc. TH Lee 8/04 B1 Ca 10/09 Chapter 11 (12/08)

115 Oceana Cruises Inc. Apollo 4/07 B2 B2 12/13 Still Owned

116 Open Solutions Inc Carlyle, Providence Equity 12/06 B2 Caa2 1/13 Sold to Strategic

117 Orbitz Worldwide, Inc Blackstone 7/07 B2 B2 12/13 Still Owned 12/13; 49% Owned byTravelport, PE exited with 3/14 DE atTravelport

118 Oriental Trading Co Carlyle 7/06 B3 Ca 8/10 Chapter 11 (6/10)

119 Ozburn-Hessey Holding Company, LLC Welsh Carson 8/05 B2 B3 5/13 Still owned; high recovery DE (12/11)

120 Packaging Dynamics Corp. (ThilmanyLLC) KKR 5/05 B1 B2 5/13 Still Owned

121 Petco Animal Supplies Inc. Leonard Green, TPG, Freeman Spogli 10/06 B2 B2 12/13 Still Owned

122 Philosophy Acquisition Company, Inc. Carlyle 2/07 B2 B2 12/10 Sold to Strategic

123 Pierre Foods, Inc. Madison Dearborn 6/04 B1 Ca 7/08 Chapter 11 (7/08)124 Pinnacle Foods Finance LLC Blackstone 3/07 B3 B1 12/13 Exiting via IPO

125 Polypore Warburg Pincus 4/04 B2 B2 3/11 Exited via IPO

126 PQ Corp Carlyle 6/07 B1 B3 12/13 Still Owned

127 PRIMEDIA Inc. KKR 6/91 Ba3 B1 5/11 Sold to PE

128 Quality Distribution Inc, Apollo 5/03 Caa1 B3 3/12 Exited via IPO; DE (9/09)

129 Quintiles Transnational Corp. Bain , TPG, 3i 1/08 B1 Ba3 11/13 Exiting via IPO

130 Rafaella Apparel Group, Inc. Cerberus 6/05 B1 Caa3 3/10 Sold to Strategic

131 RBS Global (fka Rexnord Holdings) Apollo 7/06 B2 B2 8/13 Exiting via IPO; high recovery DE (5/09

132 Realogy Corp. Apollo 3/07 B3 B3 7/13 Exited via IPO; DEs (9/09 & 5/11)

133 RGIS Services LLC Blackstone, GS Mezzanine Partners 4/07 B2 B2 5/12 Still Owned

134 Rockwood Specialties Group KKR 11/00 B1 Ba3 12/10 Exited via IPO

135 Sabre Holdings Corp. TPG , Silver Lake 4/07 B2 B2 9/13 Still Owned

136 Sealy Corp. KKR 3/04 B2 B2 9/12 Exited via IPO

137 Secure Computing Corp. Warburg Pincus 8/06 B2 B2 11/08 Sold to Strategic

138 Select Medical Corp. Welsh Carson, Thoma Cressey 1/05 B1 B1 12/13 Exited via IPO139 SemGroup, L.P. Carlyle/Riverstone 12/04 B1 Caa2 7/08 Chapter 11 (7/08)

140 Sensata Technologies B.V. Bain 4/06 B2 Ba3 12/13 Exited via IPO; high recovery DE (4/09

141 Sensus Metering Systems Inc. GS Capital, Jordan Company 12/03 B2 B3 12/13 Still Owned

142 Sequa Corporation Carlyle 11/07 B3 B3 12/13 Still Owned

143 Simmons Co, THL Bedding Co. TH Lee 12/03 B2 Caa3 1/10 Pmt Default (2/09); Chapter 11 (1/10)

144 Smart & Final Holdings Corp. Apollo 5/07 B1 B3 10/12 Sold to PE

145 SourceHOV LLC Apollo 6/06 B2 B2 4/13 Sold to PE

146 Spheris Inc. Warburg Pincus , Soros Private Equity 12/04 B3 Ca 2/10 Chapter 11 (2/10)

147 SS&C Technologies, Inc. Carlyle 10/05 B2 Ba3 7/12 Exited via IPO

148 Stallion Oilfield Services, Ltd. Carlyle/Riverstone 1/07 B2 Caa3 10/09 Chapter 11 (10/09)

149 Stiefel Laboratories, Inc. Blackstone 8/07 B1 B1 7/09 Sold to Strategic

150 SunGard Data Systems Inc Bain, KKR, Blackstone, Silver Lake, TPG, GS,Providence


151 Surgical Care Affiliates TPG l 3/07 B2 B2 10/13 Exiting via IPO

152 Synagro Technologies, Inc. Carlyle 3/07 B2 Ca 4/13 Chapter 11 (2/13)153 Talecris Biotherapeutics Inc Cerberus 11/06 B2 Ba3 6/11 Sold to Strategic

154 Targa Resources Partners LP Warburg Pincus 10/05 Ba3 Ba3 12/11 Exited via IPO

155 Team Health Inc . Blackstone 10/05 B2 Ba2 12/12 Exited via IPO

156 Telcordia Technologies Providence , Warburg Pincus 3/05 B1 B3 6/11 Sold to Strategic

157 Tervita Corp. GS, CAI, Kelso, Vestar, Alberta Inv Mgt, BC Inv Mgt& O.S.S. Cap Mgt

10/07 B2 Caa1 12/13 Still Owned

158 The ServiceMaster Co. CD&R; JPM Chase Funding; 7/07 B2 B3 12/13 Still Owned

159 Toys 'R' US, Inc. Bain, KKR, Vornado Realty Trust 3/05 B2 B2 7/13 Still Owned



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CORPORA





160 TransDigm Corp. Warburg Pincus 7/03 B1 B1 10/08 Exited via IPO

161 TransFirst Holdings Inc. Welsh Carson 5/07 B3 B3 4/13 Still Owned

162 Travelport LLC Blackstone 7/06 B2 Caa1 7/13 Still Ownedas of 12/13; DE (10/11); DE PE exit (3/14)

163 TRW Automotive Blackstone 2/03 Ba3 B1 9/10 Exited via IPO

164 TSI Acquisition, LLC Carlyle/Riverstone 2/07 B3 Caa1 8/11 Sold to Strategic

165 UCI HoldCo, Inc. Carlyle 6/03 B1 B2 1/11 Sold to Strategic

166 United Rentals Apollo 12/99 Ba2 B1 6/08 Sold to Strategic

167 United Surgical Partners Intl, Inc. Welsh Carson 3/07 B2 B2 2/13 Still Owned

168 Universal City Development Blackstone, NBC Acquisition Corp 3/03 B1 B1 7/11 Sold to Strategic

169 Univision Communications Inc Madison Dearborn , Providence Equity, TPG, TH Lee 7/13 B1 B3 5/13 Still Owned

170 US Foods, Inc. KKR, CD&R 6/07 B3 B3 11/12 Sold to Strategic

171 US Oncology Inc Welsh Carson 5/04 B1 B2 2/11 Sold to Strategic

172 Vanguard Health Systems Blackstone 9/04 B2 B2 11/13 Sold to Strategic

173 Verso Paper Holdings LLC Apollo 7/06 B1 B3 3/13 Exiting via IPO

174 Vertis Inc TH Lee 11/99 B1 Ca 7/08 Chapter 11 (7/08)

175 Vertrue Incorporated JP Morgan, Oak Investment , Rho Ventures 6/07 B2 C 4/12 Chapter 11 (4/12)

176 Veyance Technologies Inc., EPD, Inc. Carlyle 6/07 B2 Caa1 12/09 Stopped providing financials177 Viant Holdings, Inc. Welsh Carson 5/07 B2 B2 3/10 Sold to Strategic

178 Visant Corp. KKR, DLJ Merchant Banking 10/04 B1 B3 11/13 Still Owned

179 Vistar Inc. Blackstone, Wellspring Capital 6/07 B2 B2 5/08 Sold to Strategic

180 Vought Aircraft Industries Carlyle 6/00 B1 B2 7/10 Sold to Strategic

181 VWR Funding, Inc. Madison Dearborn 6/07 B3 B3 3/13 Still Owned

182 Warner Chilcott Company, Inc. Bain , DLJ Merchant Banking, JP Morgan, TH Lee 1/05 B2 B1 5/13 Exited via IPO

183 Water Pik, Inc. Carlyle, EG Capital 5/07 B3 B2 6/13 Sold to PE

184 Wesco Aircraft Hardware Corp. Carlyle 9/06 B2 Ba3 6/13 Exiting via IPO

185 West Corp. TH Lee, Quadrangle 10/06 B2 B1 4/13 Exiting via IPO

186 Wm Bolthouse Farms Inc Madison Dearborn 11/05 B2 B2 7/12 Sold to Strategic

187 WMG Holdings Corp. Bain , Providence, TH Lee 4/04 B1 Ba3 7/11 Sold to PE

188 Yankee Candle Co. Madison Dearborn 2/07 B2 B2 9/13 Sold to Strategic

Crisis Deals 2008189 Allied Security Holdings LLC Blackstone 8/08 B1 B1 11/12 Still Owned

190 Aptalis Pharma Inc. TPG 1/08 B1 B2 1/14 Sold to Strategic

191 Apria Blackstone 10/08 Ba3 B2 11/13 Still Owned

192 Booz Allen Hamilton Inc. Carlyle 6/08 B1 Ba3 10/13 Exiting via IPO

193 Bright Horizons Family Soutions Bain 5/08 B2 B1 2/13 Exiting via IPO

194 MoneyGram International Goldman Sachs, TH Lee 3/08 B1 B1 3/13 Still Owned

195 NCL Corp. Ltd (Norwegian Cruise Lines) Apollo 1/08 B2 Ba3 4/13 Exiting via IPO

196 TWCC Holding Corp. Bain, Blackstone 8/08 Ba3 B1 6/13 Still Owned

197 X-Rite Inc One Equity, Tinicum Capital, Sagard 11/08 B3 B2 6/11 Sold to Strategic

Crisis Deals 2009198 Antero Resources LLC Yorktown, Warburg Pincus,

Lehman11/09 B3 Ba3 10/13 Exiting via IPO

199 Sea World Parks & Entertainment, Inc. Blackstone 12/09 Ba3 B1 12/13 Exiting via IPO

200 Stream Global Services, Inc. Ares , Ayala Corp., Providence Equity 9/09 B1 B1 1/14 Sold to Strategic

201 TASC Inc. KKR, General Atlantic 12/09 B1 B2 5/12 Still Owned

Crisis Deals 2010202 Air Medical Group Holdings Inc. Bain 10/10 B2 B2 5/13 Still Owned

203 American Petroleum Tankers Parent Blackstone, Cerberus 3/10 Caa1 B2 12/13 Sold to Strategic; high recovery DE (3/

204 American Tire Distributors, Inc. TPG 5/10 B2 B2 12/12 Still Owned

205 Ardent Medical Services, Inc. Welsh Carson 2/10 B2 B2 12/13 Still Owned

206 Ascend Learning Inc. Providence Equity 11/10 B2 Caa1 6/13 Still Owned

207 AssuraMed Holding, Inc. CD&R GS Capital 9/10 B2 B2 2/13 Sold to Strategic

208 BOE Intermediate Holding Corp. Madison Dearborn 5/10 B1 B2 10/12 Sold to PE

209 Charter Communications Operating Apollo, Crestview Partners, Oaktree 3/10 Ba3 Ba3 3/13 Exited via IPO

210 CKE Restaurants, Inc. Apollo 6/10 B2 B2 7/13 Sold to PE



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CORPORA





211 Columbian Chemicals Co. One Equity 11/10 Ba3 Ba3 2/11 Sold to Strategic

212 Decision Insight Info. Group TPG 12/10 B2 B3 7/13 Still Owned

213 DynCorp International Inc. Cerberus 6/10 Ba3 B1 6/13 Still Owned214 EVERTEC Inc Apollo 8/10 B2 B1 4/13 Exited via IPO

215 Foresight Energy, LLC The Cline Group; Carlyle/Riverstone 8/10 B3 B2 8/13 Still Owned

216 Gymboree Corp. Bain 11/10 B2 Caa1 12/13 Still Owned

217 IMS Health Inc. TPG, Leonard Green 2/10 B1 B2 8/13 Still Owned

218 Hilex Poly Co LLC TPG 9/10 B3 B3 12/12 Sold to PE

219 Interactive Data Corp. Silver Lake, Warburg Pincus 7/10 B2 B2 2/13 Still Owned

220 InVentiv Health Inc. TH Lee, Liberty Lane Partners 7/10 B2 Caa1 12/12 Still Owned

221 Isola USA Corp. TPG 8/10 B3 B3 12/13 Still Owned

222 Kenan Advantage Group Inc. GS Capital, Centerbridge Partners 7/10 Ba3 B1 12/13 Still Owned

223 Metaldyne, LLC Carlyle, Solus Alternative Asset Management 9/10 B1 B1 12/12 Sold to PE

224 Michael Foods Group, Inc. GS Capital, TH Lee 6/10 B2 B2 12/12 Still Owned

225 MLM Information Services Warburg Pincus 11/10 B2 B2 2/12 Sold to Strategic

226 NBTY Inc. Carlyle 7/10 B1 B2 12/13 Still Owned

227 NexTag, Inc. Providence Equity 12/10 B1 Caa2 12/13 Still Owned

228 Northern Tier Energy LLC TPG, ACON Investments 11/10 B1 B1 11/13 Sold to Strategic229 Performance Food Group Blackstone, Wellspring Capital 11/10 B2 B1 5/13 Still Owned

230 Quality Home Brands Holdings LLC Quad-C Management/ Apollo 3/10 Caa1 Caa1 12/13 Still Owned

231 Renal Advantage Holdings, Inc. KRG Capital, Bain 11/10 B2 B2 4/12 Sold to Strategic

232 Sagittarius Restaurant LLC (Del Taco) Grotech Capital, GS Mezzanine Partners,Charlesbank Capital, Leonard Green

4/10 Caa1 Caa1 5/10 Still Owned

233 Scotsman Industries Inc. Warburg Pincus 4/10 B1 B1 1/13 Sold to Strategic

234 Sheridan Investment Partners I LLC Warburg Pincus 12/10 B2 B1 9/12 Still Owned

235 SkillSoft Ltd. Berkshire Partners, Advent International, Bain 5/10 B2 B2 9/12 Still Owned

236 Smile Brands Group Inc. Welsh Carson 12/10 B2 B3 8/13 Still Owned

237 Summit Materials LLC Blackstone, Silverhawk Capital 1/10 B2 B2 12/13 Still Owned

238 Syniverse Holdings Carlyle 12/10 B2 B2 1/13 Still Owned

239 TransUnion Holding Company, Inc. Madison Dearborn 5/10 B1 B1 6/12 Sold to PE

240 Trinseo S.A. Bain 6/10 B2 B2 8/13 Still Owned

241 Tower International , Inc. Cerberus 8/10 B2 B2 4/13 Exiting via IPO

242 Vertafore Inc. TPG 7/10 B2 B2 7/11 Still Owned

243 Ziggo N.V. Warburg Pincus, Cinven 4/10 Ba3 Ba1 4/13 Exited via IPO

Crisis Deals 2011244 Academy Ltd KKR 7/11 B2 B2 12/12 Still Owned

245 Airvana Network Solutions Inc. S.A.C. Private Capital, Blackstone 3/11 B3 Caa1 1/13 Still Owned

246 Artel, LLC TPG, Torch Hill 10/12 B3 Caa1 1/14 Still Owned

247 Blackboard Inc. Providence Equity 9/11 B2 B2 10/13 Still Owned

248 Capsugel Inc KKR 8/11 B2 B2 10/13 Still Owned

249 CommScope Holding Company, Inc. Carlyle 1/11 B2 B1 10/13 Exiting via IPO

250 Del Monte Corp. KKR, Vestar, Centerview Capital 3/11 B1 B2 7/13 Still Owned

251 Emdeon Inc. Blackstone, Hellman Friedman 11/11 B2 B2 4/12 Still Owned

252 Endurance International Group Inc. Warburg Pincus, GS Capital 12/11 B1 B2 10/13 Exiting via IPO

253 Go Daddy Operating Company, LLC KKR , Silver Lake, Technology Crossover Ventures 9/11 B1 B1 9/13 Still Owned

254 Immucor Inc. TPG 8/11 B2 B3 4/13 Still Owned

255 Ipreo Holdings LLC KKR 7/11 B2 B2 10/12 Still Owned256 Laredo Petroleum, Inc. Warburg Pincus 1/11 Caa1 B1 5/13 Exiting via IPO

257 Nexeo Solutions, LLC TPG 2/11 B1 B2 6/13 Still Owned

258 Ontex IV S.A. TPG, GS Capital 3/11 B1 B2 2/13 Still Owned

259 PBF Holding Company LLC First Reserve, Blackstone 1/12 Ba3 Ba3 12/12 Exiting via IPO

260 Pharmaceutical Product Development Carlyle, Hellman & Friedman 12/11 B1 B2 10/12 Still Owned

261 PlayPower, Inc Apollo 10/11 Caa1 Caa2 4/13 Still Owned

262 Polymer Group, Inc. Blackstone 1/11 B1 B1 12/13 Still Owned

26 RegionalCare Hospital Partners, Inc. Warburg Pincus 10/11 B3 Caa1 10/13 Still Owned

264 RentPath, inc. (fka PRIMEDIA INC.) TPG 6/11 B1 B2 5/13 Still Owned



20/23

CORPORA





265 Rural/Metro Corp. Warburg Pincus 6/11 B2 C 8/13 Chapter 11 (8/13)

266 Samson Investment Co. KKR, Crestview, Natural Gas Partners, Itochu Corp, 12/12 Ba3 B1 9/12 Still Owned

267 Sprouts Farmers Markets LLC Apollo 4/11 B2 B1 8/13 Exiting via IPO268 SRA International Inc. Providence Equity 7/11 B2 B2 12/13 Still Owned

269 StoneRiver Group , L.P. TPG 5/13 B2 B2 12/13 Still Owned

270 Triple Point Group Holdings Welsh Carson 10/11 B2 B2 6/13 Sold to Strategic

271 Tyrol Acquisition 1 SAS TPG, AXA, Frances sovereign wealth fund,Charterhouse


272 U.S. Security Associates Holdings, Inc. GS Capital 7/11 B1 B2 7/13 Still Owned

273 W3 Co ( fka Total Safety U.S. Inc) Warburg Pincus 10/11 B2 B2 2/13 Still Owned

Crisis Deals 2012274 Accudyne Industries Borrower SCA ( fka

Hamilton Sundstrand)BC Partners, Carlyle 12/12 B2 B2 12/13 Still Owned

275 APX Group Inc. Blackstone 11/12 B2 B2 12/13 Still Owned

276 Associated Asphalt Partners, LLC GS Capital Partners 3/12 B2 B3 2/13 Still Owned

277 August Cayman Intermediate Holdco Madison Dearborn 4/12 B2 B2 5/13 Still Owned

278 Brasa Holdings TH Lee 6/12 B2 B2 8/13 Still Owned

279 Capital Safety NA Holdings Inc. KKR 1/12 B2 B2 12/13 Still Owned280 Consolidated Container Co LLC Bain 6/12 B2 B2 12/13 Still Owned

281 Core Entertainment Inc. Apollo 1/12 B3 B3 1/12 Still Owned

282 EPE Holdings Apollo, Riverstone 4/12 Ba3 Ba3 9/13 Exiting via IPO

283 Evergreen AcqCo 1, LP Leonard Green, TPG 6/12 B2 B2 9/12 Still Owned

284 FPC Holdings, Inc (fka FleetPride Inc) TPG 11/12 B2 B3 11/13 Still Owned

285 GCA Services Group Inc. Blackstone 11/12 B2 B2 12/13 Still Owned

286 Getty Images Inc. Carlyle 9/12 B2 B3 10/13 Still Owned

287 Great Wolf Resorts Inc. Apollo 5/12 Caa1 B3 7/13 Still Owned

288 Interline Brands Inc. GS Capital, P2 Capital Partners 6/12 B2 B3 7/13 Still Owned

289 LM U.S. Member LLC (fka LandmarkAviation Inc.)

Carlyle 10/12 B3 B3 11/13 Still Owned

290 MModal Inc. One Equity 8/12 B2 Caa1 10/13 Still Owned

291 New Breed Holding Co. Warburg Pincus 9/12 B2 B2 12/13 Still Owned

292 Par Pharmaceutical Co.ss Inc TPG 9/12 B2 B2 1/14 Still Owned

293 Party City Holdings Inc. TH Lee 7/12 B2 B3 10/13 Still Owned294 Peak 10 Inc. Welsh Carson 10/12 B3 B3 12/13 Still Owned

295 Physico-Control International, Inc. Bain 1/12 B2 B2 12/13 Still Owned

296 Pinnacle Operating Corp ( fka JimmySanders)

Apollo 11/12 B2 B2 9/13 Still Owned

297 Sage Products Holdings III, LLC Madison Dearborn 12/12 B2 B2 12/13 Still Owned

298 Taminco Global Chemical Corp. Apollo 1/12 B2 B2 1/14 Exiting via IPO

299 Taylor Morrison Communities Inc. TPG, Oaktree, JH Investments 3/12 B1 B1 4/13 Exited via IPO

300 Things Remembered, Inc. Madison Dearborn 5/12 B2 B2 12/13 Still Owned

301 TransUnion Holding Company, Inc. Advent, GS Capital 6/12 B2 B2 12/13 Still Owned

302 WP CPP Holdings LLC Warburg Pincus 12/12 B2 B2 10/13 Still Owned

Crisis Deals 2013303 Axalta Coating Systems Bermuda Co. Carlyle 2/13 B2 B2 12/13 Still Owned

304 Acosta, Inc. TH Lee, Goldman Sachs 11/13 B2 B2 12/13 Still Owned

305 ALG B.V.- Apple Leisure Group Bain 2/13 B2 B2 12/13 Still Owned

306 American Gaming Systems Apollo 12/13 B3 B3 12/13 Still Owned307 Apex Tool Group, LLC Bain 2/13 B2 B2 12/13 Still Owned

308 Athlon Holdings LP Apollo 4/13 B3 B3 9/13 Exiting via IPO

309 Bluestem Brands, Inc. (Fingerhut) Bain / Battery Ventures 11/13 B2 B2 12/13 Still Owned

310 BMC Software Inc. Golden Gate Capital, Bain 9/13 B2 B2 12/13 Still Owned

311 Brickman Group Holdings KKR 12/13 B2 B2 12/13 Still Owned

312 Chesapeake/MPS Merger Limited Madison Dearborn , Carlyle 7/13 B2 B2 12/13 Still Owned

313 CompuCom Systems, Inc. TH Lee 5/13 B2 B2 12/13 Still Owned

314 Crosby US Acquisition Corp. KKR 10/13 B2 B2 12/13 Still Owned

https://www.moodys.com/credit-ratings/US-Security-Associates-Holdings-Inc-credit-rating-822639371https://www.moodys.com/credit-ratings/US-Security-Associates-Holdings-Inc-credit-rating-822639371


21/23

CORPORA





315 Crossmark Holdings Warburg Pincus 2/13 B2 B2 8/13 Still Owned

316 CTI Foods LLC T H Lee, GS Capital 5/13 B2 B2 12/13 Still Owned

317 Envision Pharmaceutical Holdings , Inc. TPG 11/13 B3 B3 12/13 Still Owned318 EzE Software Group TPG 3/13 B2 B2 12/13 Still Owned

319 Gardner Denver, Inc. KKR 7/13 B2 B2 12/13 Still Owned

320 Hilton Worldwide Holdings Inc. Blackstone 9/13 B1 B1 12/13 Exiting via IPO

321 Learfield Communications Inc. Providence Equity 10/13 B3 B3 12/13 Still Owned

322 McGraw-Hill Global Education Apollo 3/13 B2 B2 12/13 Still Owned

323 Miller Heiman Inc. Providence Equity 9/13 B3 B3 12/13 Still Owned

324 Mitchell International, Inc. KKR 10/13 B3 B3 12/13 Still Owned

325 Multi Packaging Solutions Madison Dearborn , Carlyle 12/13 B2 B2 12/13 Still Owned

326 Permian Holdings, Inc. Carlyle, Riverstone Holdings 1/13 B3 B3 12/13 Still Owned

327 Philadelphia Energy Solutions LLC Carlyle, Sunoco Inc. 4/13 B1 B1 12/13 Still Owned

328 Pitney Bowes Management Services Inc. Apollo 10/13 B2 B2 12/13 Still Owned

329 PRA Holdings Inc. KKR 9/13 B2 B2 12/13 Still Owned

330 Steward Health Care System LLC Cerberus 4/13 B3 B3 12/13 Still Owned

331 SurveyMonkey.Com, Inc. Bain, Spectrum Equity, Tiger Global, TPG ( 2011) 1/13 B2 B2 12/13 Still Owned

332 Talos Production LLC Apollo, Riverstone 2/13 B3 B3 12/13 Still Owned333 The Topps Company, Inc. Madison Dearborn, The Tornante Company 9/13 B2 B2 12/13 Still Owned

334 Travel Leaders Group, LLC One Equity Partners 11/13 B2 B2 12/13 Still Owned

335 TurboCombustor Technologies, Inc. Carlyle , Aero Equity Partners 9/13 B2 B2 12/13 Still Owned

336 YP Holdings LLC Cerberus 5/13 B2 B2 12/13 Still Owned

Abbreviations:

CFR: Corporate Family Rating

DE : Distressed Exchange

IPO: Initial Public Offering. Sponsors Exiting via IPO are in the process of winding down their equity ownership in a companThey still control a majority or a significant minority of the board. Sponsors that have Exited via IPO have sold all of their sharin a company.


22/23

CORPORA


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Special Comments:

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$640 Billion and 640 Days Later: How Companies Sponsored by Big Private Equity HavePerformed During the U.S. Recession, November 2009 (121005)

Safeguards for Lenders When Private Equity Layers on Debt, September 2009 (120167) Private Equity: Tracking the Largest Sponsors, February 2008 (104486)To access any of these reports, click on the entry above. Note that these references are current as of the date of publicatiothis report and that more recent reports may be available. All research may not be available to all clients.
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Private Equity Special Report June 2014