STANTON ASSET MANAGEMENT

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1 STANTON ASSET MANAGEMENT CORPORATE FIXED INCOME MARKET MONITOR First Quarter 215

2 Canadian Corporate Bonds First Quarter 215 Data as of March 31, 215 Market Data (Avg.) Size Performance Spread DuraIon Yield to 1 month 3 months YTD 1 year Worst $ Billion % % % % bps Years % CANADIAN GOVERNMENT CANADIAN INVESTMENT GRADE CANADIAN AAA CANADIAN AA CANADIAN A CANADIAN BBB bps Annualized performance since January 21: 6.4% $16, $14, $12, $1, C $ Billion HISTORICAL SPREAD NEW ISSUANCE (YTD) $2 $15 $1 $5 $ 1.2 ABS/CMBS 19. Bank Canadian Investment Grade AAA BBB Diversified Financials Insurance Growth of $1, $8, Jan- 1 Aug- 1 Mar- 11 Oct- 11 May- 12 Dec- 12 Jul- 13 Feb- 14 Sep- 14 Mar- 15 Cable/Tel/Media Consumer/Retail Energy Industrial Infra/P3/Project Pipeline Real Estate U[li[es 215 Quarterly Recap: In Q1 215, Canadian investment grade bonds returned 3.6%. Canada 1 Year yields closed the quarter at 1.4% from 1.8% on December 31, 214. The best performing segment of the Canadian fixed income market for the quarter was Canadian Corporate A- rated bonds, followed by Canadian BBBs. Canadian A and BBB- rated bonds returned 4.1% and 3.8%, respec[vely, compared to 3.4% for government bonds. Canadian corporate Investment grade spreads widened during Q1 215, by 1 bps. Canadian Corporate A- rated bond spreads [ghtened by 2. bps. Dura[on was a larger driver of performance. In January, yields declined sharply due to a surprise 25 bps cut in the overnight rate by the Bank of Canada in order to get ahead of defla[onary pressure from depressed oil prices. Sector Update: Year- to- date, REITs are trading widest, despite coming off a rela[vely strong month of March. The second widest sector remains Oil and Gas on the back of the collapse in oil prices in the later part of 214. Oil and gas has outperformed to start 215, [ghtening the most, even as oil prices remain lower than they were at the start of the year. The theory behind this phenomenon is that oil has boeomed presen[ng a buying opportunity. Despite the recent strong performance from the sector, we remain modestly underweight given the uncertainty surrounding the global economy and the direc[on of oil prices. The Telco space [ghtened 3 bps afer underperforming in February due to elevated spectrum related issuance. New Issue AcIvity: New issuance is off to a very strong start in 215. New issue volume for the first quarter of this year was $32.9B eclipsing last years total for the comparable period at $26.9B. Low all- in yield levels have bolstered refinancing ac[vity. Leading the way has been Bank issuance, with volume of $7.3B in March alone. Telus and Bell were notable issuers in the Telco space. Telus issued $1.75B in three tranches while Bell issued $5M in 3 year bonds. Source: Bloomberg, BofA Merrill Lynch, JP Morgan, Credit Suisse, RBC Capital Markets, TD Securi[es Data as of March 31, 215. The informa[on contained in this report has been compiled by Stanton from sources believed to be reliable. No representa[ons or warranty, express or implied, are made by Stanton or any other person as to its accuracy, completeness or correctness. All comments, opinions and es[mates contained in this report cons[tute Stanton s judgment as of the date of this report and are subject to change without no[ce and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicita[on of an offer to buy any securi[es. This material is prepared for general circula[on to Investment Professionals and does not provide regard to the par[cular circumstances or needs of any specific person who may read it. Stanton, nor any other person, accepts any liability whatsoever for any direct or consequen[al loss arising from any use of this report or the informa[on contained herein. This report may not be reproduced, distributed or published by any recipient hereof for any purpose. 2

3 Global High Yield Bonds First Quarter 215 Data as of March 31, 215 Market Data (Avg.) Size Performance Spread DuraIon Yield to 1 month 3 months YTD 1 year Worst $ Billion % % % % bps Years % GLOBAL HIGH YIELD 2, US HIGH YIELD 1, CANADA HIGH YIELD EUROPE HIGH YIELD EMERGING MARKETS HIGH YIELD Annualized performance since January 21: 9.2% $2, $15, $1, $5, $ Dec 9 Sep 1 Jun 11 Mar 12 Dec 12 Sep 13 Jun 14 Mar 15 HIGH- YIELD MUTUAL FUND FLOWS Growth of $1, ANNUAL HIGH YIELD NEW ISSUANCE YTD YTD Source: Bloomberg, BofA Merrill Lynch, JP Morgan, Barclays and Credit Suisse. Data as of March 31, 215. Quarterly Recap: In Q1 215, global high yield bonds returned 2.7%. U.S. 1 Year yields closed the quarter at 1.9% from 2.2% on December 31, 214. Global high yield spreads generally [ghtened across the full spectrum of credit quality, with B- rated credits [ghtening most by 33 bps. Emerging markets were the best performing region for the quarter ending March 31 st, returning 3.1%, while Canada was the worst at.1%. In Q1 215, Retail was the best performing sector (+4.3%), followed by Food and Beverage (+3.9%), while Metals/Mining (-.8%) was the only sector with a nega[ve return. The quarter ended on a more vola[le note as March saw several factors impac[ng High Yield returns, including a more dovish tone from the Fed as they cited increasing concerns over global growth, the impact of a strong U.S. dollar on exports and the increased vola[lity in yields, rates and oil prices. New Issue AcIvity: Supply has been robust to start 215. New issue volume has been strong in each month, with $4.1B for March. This brings the YTD total to $95.6B vs. $88.3B for Q Use of proceeds to start the year has been primarily refinancing (45%) and M&A (33%). Default Rates: Default volume/rates remain subdued. For the quarter ending March 31, 215, default volume for high yield and loans totaled $4.5B compared to $4.3B for the comparable period in 214. The leveraged credit default rate issued by JP Morgan which combines high yield bonds and leveraged loans was 3.37% compared to 3.5% in February. Carving out TXU, this rate declines to 1.62%. Energy remains an area of risk as the probability of default occurrences increases within the sector the longer oil prices stay depressed. As of March 31, 215 the price of oil was $47.6 USD a barrel. The informa[on contained in this report has been compiled by Stanton from sources believed to be reliable. No representa[ons or warranty, express or implied, are made by Stanton or any other person as to its accuracy, completeness or correctness. All comments, opinions and es[mates contained in this report cons[tute Stanton s judgment as of the date of this report and are subject to change without no[ce and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicita[on of an offer to buy any securi[es. This material is prepared for general circula[on to Investment Professionals and does not provide regard to the par[cular circumstances or needs of any specific person who may read it. Stanton, nor any other person, accepts any liability whatsoever for any direct or consequen[al loss arising from any use of this report or the informa[on contained herein. This report may not be reproduced, distributed or published by any recipient hereof for any purpose. 3

4 FloaIng Rate Senior Loans First Quarter 215 Data as of March 31, 215 Market Data (Avg.) Size RaIng Yield DuraIon Spread VolaIlity (%) Performance (%) $ B % Years bps 1yr 3D YTD 1yr 2yr FLOATING RATE SENIOR LOAN INDEX 95 B+/BB- 4.9 < FLOATING RATE NOTE INDEX 38 B+ 4.6 < SHORT DURATION HIGH YIELD BOND INDEX 589 BB Selected Index New Issues Size RaIng Yield DuraIon Spread Price Performance (%) $ B % Years bps Since Issue VALEANT PHARMACEUTICALS Effec[ve 3/13/ BB RIVERBED TECHNOLOGY INC Effec[ve 2/27/ B DOLLAR TREE INC Effec[ve 2/27/ BB Annualized performance since January 21: 6.% $14, $13, $12, $11, $1, $9, LEVERAGED LOAN MUTUAL FUND FLOW YTD INSTITUTIONAL LOAN ISSUANCE Growth of $1 $8, Dec- 9 Jul- 1 Feb- 11 Sep- 11 Apr- 12 Nov- 12 Jun- 13 Jan- 14 Aug- 14 Mar- 15 Quarterly Recap: In Q1 215, the Credit Suisse Leveraged Loan Index returned 2.1%. Discount margin to maturity [ghtened to 52 bps from 527 bps at the end of Q4 214 with a current yield of 4.9%. During the same period, Canada 1- year yields decreased by.4% to 1.4% from 1.8%. For Q1 215, senior loans outperformed asset classes such as equi[es (the S&P 5 returned +1.%) and global high yield bonds returned +.34%. During the same period, senior loans generated comparable returns to alterna[ves such as 1- year Treasuries (+2.6%), investment grade bonds (+2.3%) and emerging market bonds (+2.1%). New Issue AcIvity: Unlike High Yield, loan supply remains light following the risk- off tone during the last few months of 214. The first quarter of 215 is well off the torrid pace of new issuance set in the preceding year. There has been $48.3B in new issuance compared to $177B during the first quarter of 214. M&A has been the leading use of proceeds, represen[ng $34.1B of new issuance year to date. The technical backdrop for loans has improved due to a combina[on of light new issuance, aba[ng retail ouqlows and healthy CLO ac[vity, adding demand for loans. CLO volume for the first quarter of 215 was $31.2B compared $23.9B during the first quarter of 214. Default Rates: Default volume/rates remain subdued. For the quarter ending March 31, 215, default volume for high yield and loans totaled $4.5B compared to $4.3B for the comparable period in 214. The leveraged credit default rate issued by JP Morgan, which combines high yield bonds and leveraged loans, was 3.37% compared to 3.5% in February. Carving out TXU, this rate declines to 1.62%. Energy remains an area of risk as the probability of default occurrences increases within the sector the longer oil prices stay depressed. As of March 31, 215 the price of oil was $47.6 USD a barrel. Recovery Rates: At 95.2%, 1 st lien recovery rates con[nue to exceed the 17 year annual average of 68.33% YTD Source: Bloomberg, Bank of America Merrill Lynch, Barclays and Credit Suisse. Data as of March 31, 215 The informa[on contained in this report has been compiled by Stanton from sources believed to be reliable. No representa[ons or warranty, express or implied, are made by Stanton or any other person as to its accuracy, completeness or correctness. All comments, opinions and es[mates contained in this report cons[tute Stanton s judgment as of the date of this report and are subject to change without no[ce and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicita[on of an offer to buy any securi[es. This material is prepared for general circula[on to Investment Professionals and does not provide regard to the par[cular circumstances or needs of any specific person who may read it. Stanton, nor any other person, accepts any liability whatsoever for any direct or consequen[al loss arising from any use of this report or the informa[on contained herein. This report may not be reproduced, distributed or published by any recipient hereof for any purpose. 4

5 First Quarter 215 Data as of March 31, 215 ASSET CLASS CHARACTERISTICS Credit asset classes are unique in that they provide investors with aerac[ve yield, coupled with reduced vola[lity and low correla[on to tradi[onal fixed income. Canadian investment grade corporate bonds, global short dura[on high yield bonds and floa[ng rate senior loans are a ~USD 1.9 billion ins[tu[onal asset class with a long history of stable returns. 1 Since 29, these three asset classes have generated posi[ve returns on an annual basis, which is not the case for the tradi[onal fixed income asset class. As a result of these posi[ve features, ins[tu[onal investors seeking added yield and diversifica[on have increased their alloca[on to these asset classes. Canadian Corporate Bonds Global High Yield Bonds FloaIng Rate Senior Loans Average Credit RaIng A BB- B+/BB- Maturity 8-1 years 6-8 years 2-5 years Market Size $ Billion Approx. $4 Approx. 2,1 Approx. 1, # of Issues Approx. 85 Approx. 3,7 Approx. 1,65 INVESTMENT PROCESS Top- Down Analysis Corporate Fixed Income Strategies SecuriIes with Best PotenIal Risk- Adjusted Return Porgolio ConstrucIon Porgolio Monitoring The firm s investment process combines both top- down and boeom- up analysis. Our approach focuses on alloca[on decisions based on top- down assessment of macroeconomic condi[ons and asset class valua[on, and on fundamental boeom- up research and selec[on of securi[es in order to add value within defined levels of porqolio risk. INVESTMENT TEAM Bofom- Up Analysis Over 25 years of global investment experience, including on Wall Street in M&A, capital markets and private equity, and in Canada in managing porqolios invested in Canadian and global equity and debt securi[es. Connor O Brien, MBA President and CIO Previously with Lehman Brothers and Par- Four Investment Management in New York, a firm managing total assets of over $3 billion in non- investment grade debt. Adam Smalley, CPA, MBA Senior Porqolio Manager Fixed Income ABOUT STANTON Stanton Asset Management is an independent investment management firm that offers fixed income and equity investment strategies with over $9 million of assets under management. Stanton is registered with and regulated by the AMF and the OSC. Stanton s team is comprised of over fourteen professionals responsible for investment and risk management, compliance, opera[ons, legal, client servicing and finance. The investment team brings extensive experience across asset classes in Canadian and global markets including investment grade bonds, high yield bonds, floa[ng rate debt, conver[ble bonds and equi[es. Stanton is the porqolio advisor of O'Leary Funds and also manages porqolios for private, family office, corporate and ins[tu[onal clients. Contact InformaIon Connor O Brien, cobrien@stantonasset.com T: (514) Rocio Gueto, rgueto@stantonasset.com T: (514) Sherbrooke Street West # 17, Montreal (QC), H3A 2R7. www. stantonasset.com 1. Source: The BofA Merrill Lynch and Credit Suisse Index Data: Floa[ng Rate Senior Loan Index : Credit Suisse Leveraged Loan Index; Floa[ng Rate Note Index : Barclays U.S. HY FRN Index. Short Dura[on High Yield Bonds : The BofA Merrill Lynch - 3 Year Dura[on BB- B Global Non- Financial High Yield Constrained Index 5