Download - Barclays AS6911 US Tuesday Call JM 9 Jul 13
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
1/19
Barclays Tuesday Credit CallNo Independence from Rates
Please see analyst certifications and important disclosures starting after slide 15.
Jeffrey Meli
Jigar Patel
Alex Gennis
July 9, 2013
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
2/19
1
Agenda
Conference Call Information
Tuesday, 7:45am (EDT)
Conference ID: 77122048
Dial-in: +1-866-394-9718+1-706-634-9973
Replay: Live.barcap.com
Credit Conference Calls
Credit Strategy
Jeffrey Melis Piece
Other Speakers
Corporate Bonds/CDS Trading
Finbar Cooke European Bank CDS
Ryan Johnstin Financials Cash
Yoni Gorelov Yankee Credit
Yana Bouchkanets Barclays Live
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
3/19
2
___________________________Source: Bloomberg, Barclays Research
CDX IG OTR (bp)
CDX HY OTR ($) US HY Index OAS and YTW
US Corporate Index OAS and YTW
2.5
2.7
2.9
3.1
3.3
3.5
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Ju l-13
125
130
135
140
145
150
155
US IG Corp YTW (rhs, %) US IG Corp OAS (lhs, bp)
4.9
5.4
5.9
6.4
6.9
7.4
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Ju l-13
400
420
440
460
480
500
520
US HY Corp YTW (rhs, %) US HY Corp OAS (lhs, bp)
OAS YTW
Last 2wks: -1bp +13bp
YTD: +7bp +79bp
OAS YTW
Last 2wks: -10bp +5bp
YTD: -35bp +54bp
After hitting new YTD wides/lows on June 24, IG and HY CDX have ralliedsharply over the past two weeks. Cash spreads are also modestly tighter overthe same period
69
74
79
84
89
94
99
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Ju l-13
Chg from 6/21 7/5: -8bpYesterday (7/8): -4bp
100
101
102
103104
105
106
107
108
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul -13
Chg from 6/21 7/5: Price +$1.30; Spread -31bpYesterday (7/8): Price +$1.00; Spread -22bp
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
4/19
3
0k
50k
100k
150k
200k
250k
300k
350k
Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13
Latest Survey 6 Month Rolling Average
The main news on the macro front was Fridays better-than-expected payrollsreport. Treasury yields spiked, and CDX spreads widened in reaction.However, CDX managed to retrace all of the widening by yesterdays close
___________________________Source: BLS, Bloomberg, Barclays Research
Change in Nonfarm Payrolls (m/m, sa)
CDX IG and HY Intraday (Jul 5 8, bp) S&P 500 Futures Intraday (Jul 5 8)
10y Treasury Yield Intraday (Jul 5 8, %)Job creation exceededestimates for the third
consecutive month
2.55
2.60
2.65
2.70
2.75
Jul-0507:00
Jul-0510:00
Jul-0513:00
Jul-0516:00
Jul-0809:30
Jul-0812:30
Jul-0815:30
Payroll announcement
410
415
420
425
430
435
82
83
8485
86
87
88
89
Jul-0507:00
Jul-0510:00
Jul-0513:00
Jul-0809:15
Jul-0812:15
Jul-0815:15
CDX IG (rhs) CDX HY
10y yields rose 23bp on Friday,but declined 10bp yesterday
CDX indices managed toretrace Fridays move wider
1,610
1,615
1,620
1,625
1,630
1,635
1,640
Jul-0507:00
Jul-0510:00
Jul-0513:00
Jul-0516:00
Jul-0809:45
Jul-0812:45
Jul-0815:45
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
5/19
4
So far, despite a significant selloff in fixed-income markets, there has beenlittle evidence of a great rotation away from credit and into equities, as theselloff and fund outflows have occurred across most risky assets
Equity Markets May-June Peak to Trough (%)Mutual Fund Flows ($bn)*
___________________________*Note: Monthly and weekly reporters including ETFs.Source: Lipper/Thomson Reuters, Bloomberg, Barclays Research
(15)
(10)
(5)
0
5
10
15
20
1-May 22-May 12-Jun 3-Jul
Equit ies IG Bonds HY Bonds
but, more recently,outflows occurred
across risky assets
Credit May-June Peak to Trough Spd Moves (bp)
-25%
-20%
-15%
-10%
-5%
0%
S&P 500 Nasdaq Eurostoxx EEM Nikkei
02040
6080
100120
140160180
CDX.IG US
Corp
OAS
CDX.HY US HY
OAS
iTraxx
Main
Euro
Corp
OAS
iTraxx
Xover
PE HY
OAS
Initially, equity fundssaw inflows despiteoutflows from fixed
income funds
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
6/19
5
HY Corp
BondsCash & Other
Munis
IG Corp
Bonds
Mortgage
Treasuries
R2 = 50%
-3
-2
-1
0
1
2
-5 -4 -3 -2 -1 0 1 2 3
Fund Flows ($bn)
The recent volatility in credit markets has drawn additional scrutiny to fundflows. While HY flows appear to have value as a contemporaneous indicatorof returns, the utility of IG fund flow data is limited
___________________________1. Regressions based on weekly flows and returns (Wednesday to Wednesday periods) for the past 52 weeks. Flows are for weekly-only reporters including ETFs.2. Weekly-only reporters including ETFsSource: Lipper / Thomson Reuters, Barclays Research
US HY Flows vs US HY Index Total Returns1 Assets of Lipper Corp IG Fund Category2
Limited Information Contained in IG Fund FlowsUS IG Flows vs US Corp Index Excess Returns1
Most IG assets withinmutual funds are in
total return/agg funds
rather than dedicatedIG corporate bondfunds
Total Returns (%)
R
2
= 6%
-1
0
1
2
-3 -2 -1 0 1 2 3 4
Fund Flows ($bn)
Excess Returns (%) While HY fund flows are important to understanding prices moves in
HY credit, in our view, IG fund flows are less useful for understanding
spread moves in the IG market
There is a fairly strong contemporaneous relationship between HY
fund flows and HY returns, but almost no relationship between IG
flows and IG returns
Fund flows are less meaningful for the IG market because retail
investors are a smaller part of the buyer base in IG than in HY and
because most IG mutual fund assets are in total return/agg funds rather
than dedicated IG corporate bond funds. In fact, only 35% of the main
IG corporate bond fund Lipper category is IG corporate bonds
(35%)
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
7/19
6
We expect spreads to tighten in the near term once interest rates stabilizeand fund outflows abate. However, in the longer term, we are mindful of therisk of QE withdrawal without accompanying improvements in economic data
___________________________Source: Barclays Research
Volatility Spiked When Fed Was Not in the Market
Near-Term View
Medium- to Longer-Term View
In the medium to longer term, however, we will continue to closely
monitor commentary from the Fed and changes in underlying
economic data
While we expect the pace of removal of Fed stimulus to be linked to
the pace of the economic recovery, we are mindful of the risk that
QE is withdrawn without significant improvement in economic
data
A scenario in which the Fed withdraws stimulus but economic data
remain weak exposes the market to an external risk flare-up that could
lead to a spike in volatility similar to selloffs in the spring/summer 2010
and summer 2011, when the Fed withdrew stimulus
We continue to believe that credit spreads are likely to retrace the
recent widening once rates stabilize, as the asset class becomes
more attractive at higher yield levels and fund outflows abate
In fact, high yield flows have turned positive recently and spreads
have already moved away from their recent wides
As a result, certain parts of the market that have lagged present buying
opportunities, in our view
In HY, short-duration bonds have underperformed andnow appear attractive. In IG, we maintain our constructive
view on financials, which have also lagged
0
10
20
30
40
50
60
70
80
90
0
100
200
300
400
500
600
700
800
900
1000
Sep-08 Jun-09 Mar-10 Dec-10 Sep-11 Jun-12 Mar-13
Fed Not in the Market Credit Index OAS (bp, lhs)
VIX Index (rhs)
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
8/19
7
125
130
135
140
145
150
155
160
165
2-Jan 31-Jan 1-Mar 29-Mar 26-Apr 24-May 24-Jun
-5
0
5
10
15
20
Diff (rhs) Fins Non-Fins
Not surprisingly, banks, which have been higher beta over the past severalyears, underperformed in the recent selloff. We remain positive on the sectorand would use the recent selloff as an opportunity to increase exposure
___________________________Source: Barclays Research
US Corporate Index: Fins vs Non-Fins (OAS, bp) 5y Bank CDS minus 5y CDX.IG Spread (bp)
The financial-industrial basis haswidened during the recent selloff,
after compressing to zero earlierin the year
-40
-20
0
20
40
60
80
100
2-Jan 30-Jan 27-Feb 27-Mar 24-Apr 22-May 19-Jun
BAC C GS JPM MS WFC
CDS spreads of U.S. banks haveunderperformed the CDX index
recently, with MS and GSlagging the most
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
9/19
8
The sector continues to be in the spotlight as the TBTF1 debate intensifies.While estimates of the TBTF subsidy vary wildly, we believe the higherestimates apply too large a spread subsidy to too broad a borrowing base
Most of a Large Banks Liabilities Would NotReflect TBTF Perceptions
Some Liabilities Clearly Do Not Benefit
Subsidy Estimates Vary Wildly: $0-83bn News outlets and academics have estimated that the SIFIs
benefit from an aggregate subsidy as great as $83bn per year2
We believe these estimates apply too large a spread
subsidy to too broad a borrowing base
Others have argued that the big banks borrow no cheaper than
they would on a standalone basis and, consequently, that there
is no subsidy
We believe these estimates do not appropriately account
for business model and risk differences between regional
and money center banks
___________________________1. Too-big-to-fa il 2. Why Should Taxpayers Give Big Banks $83 Billion a Year? Bloomberg View. February 20, 2013.Note: For details, please see TBTF: The $83bn Question, July 1, 2013.Source: Company reports, SNL, Barclays Research
Repo funding (~10%) repo rates approach govt funding rates and are
primarily based on the quality of the collateral, rather than the borrower
Trading liabilities (~5%) similar to repo, have costs more related to the
underlying securities than the credit quality of the bank
Other category - primarily consists of timing differences and customerpayables, which do not bear credit-sensitive interest
Only a subset of wholesale debt would fall within the scope of TBTF -
senior unsecured debt, commercial paper, sub debt, and trust preferred
securities, which togetherrepresent $1.2trn in debt, or ~ 13% of these
six banks total assets
50% 50%
8%
50%
10%
70%
11% 12%
18%
10%
20%
3%
6% 6%
16%
5%
16%
2%15% 15%
25%
17%
23%
10%
11% 10%
8%
9%
9%
11%
6% 7%
26%
8%
22%
4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
BAC C GS JPM MS WFC
Deposits Repo Trading Liab Whsale Debt Equity Other
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
10/19
9
Deposits: Unlikely to be Cheaper Due to TBTF
Resolutions to Protect Uninsured Deposits (05-)
Cum. Chg in Acct Bal >250k since 4Q11 (%)1
-5%
0%
5%
10%
15%
20%
25%
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13
Moneycenters All Others
Uninsured depositors haveappeared largely indifferent
to a banks size
94% 87% 88% 86%100%
0%
20%
40%
60%
80%
100%
>$0.5bn $0.5-1bn $1-10bn $10-100bn >$100bn
Uninsured Deposits Protected Uninsured Deposits Not Protected
While the impact of TBTF status on deposits is less clear, we believe they areunlikely to be any cheaper because of TBTF
*OnlyWash.Mutual
At $4.4trn, deposits represent the largest single liability on
the money center banks aggregate balance sheet
Deposit balance naturally divides into two distinct categories:
Insured Deposits: with insured deposits, depositors
have little incentive to consider the credit quality of their
banks
Uninsured Deposits: these deposits could display
some credit sensitivity; however, in practice, they have
shown little sensitivity to a banks systemic importance
When the FDICs expanded Transaction Account Guarantee
(TAG) expired at the end of 2012, money-center banks
experienced a 1% decline in previously guaranteed account
balances the opposite of what we would expect if TBTF were a
major depositor consideration
Even if an uninsured depositor were to leave funds at a failing
bank, developments in bank resolution practices minimize thechance of experiencing a loss
Collectively, this very low likelihood of bearing a loss
explains uninsured depositors minimal credit sensitivity
___________________________1. The All Others category excludes the three major trust banks (BK, STT, and NTRS), as these banks have experienced much more volatile deposit flows over the past two years than either the
money centers or the other regional banks.Note: For details, please see TBTF: The $83bn Question, July 1, 2013.Source: FDIC, Barclays Research
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
11/19
10
On the low end, those estimating no TBTF subsidy have focused on bondmarket funding costs, where a comparison of credit spreads shows no benefitto size. However, we believe this type of analysis oversimplifies the issue
10y IG Bank Holdco OAS vs Total Assets1 10y IG Bank HoldCo OAS vs Composite Rating2
R = 0.0084
0
50
100
150
200
250
300
$0 $500 $1,000 $1,500 $2,000 $2,500
OAS
Asset Size ($bn)
Small Regional Money Center
0
50
100
150
200
250
300
3 4 5 6 7 8 9 10
OAS
Composite Standalone Ratings
Money Center Regional Small
AA- A+ A A- BBB+ BBB BBB- BB+
*Bubble size denotes total assets
___________________________1. Asset size as of 1Q13.2. Composite rating reflects median of Moodys, S&P, and Fitch senior holding company issuer ratings.Note: For details, please see TBTF: The $83bn Question, July 1, 2013.Source: Barclays Research
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
12/19
11
A simple spread comparison is incorrect because the largest banks differ intheir business mix from regional banks and from each other
Money Center vs Regional Banks
Retail Banking CommercialBanking
Credit Cards Trade Finance Debt & EquityCapital Markets
SecuritiesTrading
AssetManagement
Money Center Banks Yes Yes Yes Yes Yes Yes Yes
Regional Banks Yes Yes Sometimes Sometimes Minimal Minimal Sometimes
80% 76%
22%
70%
32%
84%
20% 24%
78%
30%
68%
6%
0%
20%
40%
60%
80%
100%
Bank of America(BAC)
Citigroup Inc. ( C ) Goldman Sachs (GS) JPMorgan Chase(JPM)
Morgan Stanley (MS) Wells Fargo &Company (WFC)
Retail & Commercial Banking Investment Banking
Money Center Banks Risk-Weighted Asset Mix1
___________________________1. Risk-weighted assets as of 1Q13.Note: For details, please see TBTF: The $83bn Question, July 1, 2013.Source: Company reports, SNL, Barclays Research
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
13/19
12
+ 24bp+ 13bp
- 7bp
- 6bp
+ 11bp
-15bp
100
150
200
250
BAC C GS JPM MS WFC
OAS
Actual 10y Spread Predicted 10y Spread
Instead, comparing each banks credit spread to a weighted-average spreadcorresponding to its asset mix better addresses the money center risk profile.Utilizing such a framework, we estimate an annual subsidy of $2-6bn
BAC CGS
JPM
MS
WFC100
150
200
250
300
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
OAS
Est. Investment Banking RWAs % Total RWAs
Bank Credit Spreads vs Risk-Weighted Asset Mix1
A simple analysis suggests a subsidy of9-32bp for four of the six largest banks
A more refined analysis suggests asubsidy of 5-15bp for only three banks
Average Spread for Pure Investment Banks
Average Spread for Pure Retail & Commercial Banks
$2-6 Billion Annual SubsidyRefined RWA Analysis
___________________________1. Retail & commercial bank average includes COF, PNC, USB, and FITB. Investment bank average includes JEF, LAZ, and RJF.Note: RWA breakdown as of 1Q13. For details, please see TBTF: The $83bn Question, July 1, 2013.Source: Barclays Research
15-50bp x $1.2 trillion of credit-sensitive debt of six
banks = $2-6 billion
Even this estimate may be too high
Money center bank debt is far more liquid
Money center banks average Tier 1 Common Ratio is
9.14% compared with 8.26% for a sample of large
regionals1
Low-risk businesses, such as asset management and
trust/custodial, are not considered
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
14/19
13
Our recent institutional investor survey confirmed that the perception of TBTFis widespread and that regulators have much work to do in improving thecredibility of their new resolution powers
Investor Survey: TBTF Subsidy Estimate
Subsidy Size is Not ConstantInvestor Survey: Likelihood of Bailout
Investor Survey: Likelihood of Bail-Out
0%
10%
20%
30%
40%
No SpreadSubsidy
1-25 bp 26-50 bp 51-100 bp Over 100 bp
Because the 6 largest U.S. banks might be bailed out in afuture crisis, the market-demanded spread for senior U.S.
SIFI credit is __ bp lower than it would be otherwise.
0%10%20%30%40%50%60%
Multiple US SIFIs willface a connected
succession of stand-alone failures
A single US SIFI willface an idiosyncratic
stand-alone failure
A US SIFI failure isunlikely in the next 20
years
Over the next 20 years it is likely ( > 50% chance ) that:
0%
20%
40%
60%
80%
No, some form of bail-out would instead take
place
Yes, but only if oneSIFI were to fail on an
idiosyncratic basis
Yes, even if multipleSIFIs failed inrelatively quick
succession
Assuming a SIFI fails in the next 10 years, do you believeOrderly Liquidation Authority (OLA) would be used to
resolve the entity?
While the TBTF subsidy is real, its small size suggests
only modest power to alter risk-taking behavior
Subsidy is likely to change with perceived broad
market risk
Subsidy could be large during times of
uncertainty unless regulators address
outstanding concerns
___________________________Note: For details, please see TBTF: The $83bn Question, July 1, 2013.Source: Barclays Research
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
15/19
14
In Summary
Credit spreads rallied over the past two weeks, with CDX outperforming. So far,despite the sharp selloff in fixed income since the May tights, there has been little
evidence of a great rotation away from credit and into equities
In the near term, we remain positive on credit and expect spreads to tighten once
rates stabilize. However, in the medium-to-longer term, we will continue to closely
monitor commentary from the Fed and changes in underlying data, being mindful of
the risk that QE is withdrawn without significant improvement in economic data
The banking sector remains in focus as the TBTF debate has intensified. Estimates
of the TBTF subsidy vary wildly, ranging from $0 to $83bn. The high-end estimates
apply a subsidy to too broad a borrowing base, while the low-end estimates ignore
differences in business mix
Our RWA-based approach estimates an annual subsidy of $2-6bn. But perhaps more
importantly, our recent investor survey confirmed that the perception of TBTF is
widespread and that regulators have much work to do to dispel the notion of TBTF
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
16/19
15
Tip of the Week: Access your TSP folder in CHART
With the launch of the cross-asset charting and curve analysis toolChart, Time Series Plotter will be retired in the near future. We are
mindful that the Time Series Plotter is still widely used, and we want to
ensure a smooth transition to Chart. Please review these simple stepsthat will allow you to move all saved TSP plots to Chart.
1. Make sure your "Settings" are set up properly:
When you open CHART, click "Settings" on the top grey menu bar.From the menu, you will see Show open TSP menu with a box. Please
make sure this box is checked and click Save
2. Go to "File," then "Open TSP"Once your settings are changed, your "File" menu will show "Open
TSP". Select "Open TSP" to access to your saved TSP folder. You should
see your saved TSP plots in the folder.
3. Save your TSP Plots in CHART
Once you have opened the TSP plot in CHART, you must "Save As" in
CHART to access the plot after TSP retirement and to add the plot to
your CHART Batch reports.
Barclays Live Sales: Americas
Yana Bouchkanets
+1 212 526 5537
Julia Brezing
+1 212 412 2539
Jim Martin
+1 212 412 7619
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
17/19
16
Analysts Certifications and Important Disclosures
Analyst Certification(s)We, Jeffrey Meli, Jigar Patel and Alex Gennis, hereby certify (1) that the views expressed in this research report accurately reflect ourpersonal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of our compensationwas, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report.
Important Disclosures:Barclays Research is a part of the Corporate and Investment Banking division of Barclays Bank PLC and its affiliates (collectively and eachindividually, "Barclays"). For current important disclosures regarding companies that are the subject of this research report, please send awritten request to: Barclays Research Compliance, 745 Seventh Avenue, 17th Floor, New York, NY 10019 or refer tohttp://publicresearch.barclays.com or call 212-526-1072.
Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result,investors should be aware that Barclays may have a conflict of interest that could affect the objectivity of this report. Barclays Capital Inc.
and/or one of its affiliates regularly trades, generally deals as principal and generally provides liquidity (as market maker or otherwise) in thedebt securities that are the subject of this research report (and related derivatives thereof). Barclays trading desks may have either a longand / or short position in such securities, other financial instruments and / or derivatives, which may pose a conflict with the interests ofinvesting customers. Where permitted and subject to appropriate information barrier restrictions, Barclays fixed income research analystsregularly interact with its trading desk personnel regarding current market conditions and prices. Barclays fixed income research analystsreceive compensation based on various factors including, but not limited to, the quality of their work, the overall performance of the firm(including the profitability of the investment banking department), the profitability and revenues of the Fixed Income, Currencies andCommodities Division and the potential interest of the firms investing clients in research with respect to the asset class covered by theanalyst. To the extent that any historical pricing information was obtained from Barclays trading desks, the firm makes no representationthat it is accurate or complete. All levels, prices and spreads are historical and do not represent current market levels, prices or spreads,some or all of which may have changed since the publication of this document. Barclays produces various types of research including, butnot limited to, fundamental analysis, equity-linked analysis, quantitative analysis, and trade ideas. Recommendations contained in one typeof research may differ from recommendations contained in other types of research, whether as a result of differing time horizons,methodologies, or otherwise. Unless otherwise indicated, Barclays trade ideas are provided as of the date of this report and are subject tochange without notice due to changes in prices. In order to access Barclays Statement regarding Research Dissemination Policies andProcedures, please refer to https://live.barcap.com/publiccp/RSR/nyfipubs/disclaimer/disclaimer-research-dissemination.html.
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
18/19
17
Disclaimer
This publication has been prepared by the Corporate and Investment Banking division of Barclays Bank PLC and/or one or more of its affiliates (collectively and eachindividually, "Barclays"). It has been issued by one or more Barclays legal entities within its Corporate and Investment Banking division as provided below. It is provided to ourclients for information purposes only, and Barclays makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particularpurpose or use with respect to any data included in this publication. Barclays will not treat unauthorized recipients of this report as its clients. Prices shown are indicative andBarclays is not offering to buy or sell or soliciting offers to buy or sell any financial instrument.Without limiting any of the foregoing and to the extent permitted by law, in no event shall Barclays, nor any affiliate, nor any of their respective officers, directors, partners, oremployees have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss ofopportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents.Other than disclosures relating to Barclays, the information contained in this publication has been obtained from sources that Barclays Research believes to be reliable, butBarclays does not represent or warrant that it is accurate or complete. Barclays is not responsible for, and makes no warranties whatsoever as to, the content of any third-party web site accessed via a hyperlink in this publication and such information is not incorporated by reference.The views in this publication are those of the author(s) and are subject to change, and Barclays has no obligation to update its opinions or the information in this publication.The analyst recommendations in this publication reflect solely and exclusively those of the author(s), and such opinions were prepared independently of any other interests,including those of Barclays and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances orobjectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Barclays recommends that investors independently evaluate eachissuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuatefrom day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results,
which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.This communication is being made available in the UK and Europe primarily to persons who are investment professionals as that term is defined in Article 19 of the FinancialServices and Markets Act 2000 (Financial Promotion Order) 2005. It is directed at, and therefore should only be relied upon by, persons who have professional experience inmatters relating to investments. The investments to which it relates are available only to such persons and will be entered into only with such persons. Barclays Bank PLC isauthorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the LondonStock Exchange.The Corporate and Investment Banking division of Barclays undertakes U.S. securities business in the name of its wholly owned subsidiary Barclays Capital Inc., a FINRA andSIPC member. Barclays Capital Inc., a U.S. registered broker/dealer, is distributing this material in the United States and, in connection therewith accepts responsibility for itscontents. Any U.S. person wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Barclays Capital Inc. in the U.S.at 745 Seventh Avenue, New York, New York 10019.Non-U.S. persons should contact and execute transactions through a Barclays Bank PLC branch or affiliate in their home jurisdiction unless local regulations permit otherwise.Barclays Bank PLC, Paris Branch (registered in France under Paris RCS number 381 066 281) is regulated by the Autorit des marchs financiers and the Autorit decontrle prudentiel. Registered office 34/36 Avenue de Friedland 75008 Paris.This material is distributed in Canada by Barclays Capital Canada Inc., a registered investment dealer and member of IIROC (www.iiroc.ca).
Subject to the conditions of this publication as set out above, Absa Capital, the Investment Banking Division of Absa Bank Limited, an authorised financial services provider(Registration No.: 1986/004794/06. Registered Credit Provider Reg No NCRCP7), is distributing this material in South Africa. Absa Bank Limited is regulated by the SouthAfrican Reserve Bank. This publication is not, nor is it intended to be, advice as defined and/or contemplated in the (South African) Financial Advisory and IntermediaryServices Act, 37 of 2002, or any other financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever. Any SouthAfrican person or entity wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Absa Capital in South Africa, 15Alice Lane, Sandton, Johannesburg, Gauteng 2196. Absa Capital is an affiliate of Barclays.In Japan, foreign exchange research reports are prepared and distributed by Barclays Bank PLC Tokyo Branch. Other research reports are distributed to institutional investorsin Japan by Barclays Securities Japan Limited. Barclays Securities Japan Limited is a joint-stock company incorporated in Japan with registered office of 6-10-1 Roppongi,Minato-ku, Tokyo 106-6131, Japan. It is a subsidiary of Barclays Bank PLC and a registered financial instruments firm regulated by the Financial Services Agency of Japan.Registered Number: Kanto Zaimukyokucho (kinsho) No. 143.
-
7/27/2019 Barclays AS6911 US Tuesday Call JM 9 Jul 13
19/19
18
Disclaimer (contd)
Barclays Bank PLC, Hong Kong Branch is distributing this material in Hong Kong as an authorised institution regulated by the Hong Kong Monetary Authority. RegisteredOffice: 41/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong.This material is issued in Taiwan by Barclays Capital Securities Taiwan Limited. This material on securities not traded in Taiwan is not to be construed as 'recommendation' inTaiwan. Barclays Capital Securities Taiwan Limited does not accept orders from clients to trade in such securities. This material may not be distributed to the public media orused by the public media without prior written consent of Barclays.This material is distributed in South Korea by Barclays Capital Securities Limited, Seoul Branch.
All equity research material is distributed in India by Barclays Securities (India) Private Limited (SEBI Registration No: INB/INF 231292732 (NSE), INB/INF 011292738 (BSE),Registered Office: 208 | Ceejay House | Dr. Annie Besant Road | Shivsagar Estate | Worli | Mumbai - 400 018 | India, Phone: + 91 22 67196363). Other research reports aredistributed in India by Barclays Bank PLC, India Branch.Barclays Bank PLC Frankfurt Branch distributes this material in Germany under the supervision of Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin).This material is distributed in Malaysia by Barclays Capital Markets Malaysia Sdn Bhd.This material is distributed in Brazil by Banco Barclays S.A.This material is distributed in Mexico by Barclays Bank Mexico, S.A.Barclays Bank PLC in the Dubai International Financial Centre (Registered No. 0060) is regulated by the Dubai Financial Services Authority (DFSA). Principal place ofbusiness in the Dubai International Financial Centre: The Gate Village, Building 4, Level 4, PO Box 506504, Dubai, United Arab Emirates. Barclays Bank PLC-DIFC Branch,may only undertake the financial services activities that fall within the scope of its existing DFSA licence. Related financial products or services are only available toProfessional Clients, as defined by the Dubai Financial Services Authority.
Barclays Bank PLC in the UAE is regulated by the Central Bank of the UAE and is licensed to conduct business activities as a branch of a commercial bank incorporatedoutside the UAE in Dubai (Licence No.: 13/1844/2008, Registered Office: Building No. 6, Burj Dubai Business Hub, Sheikh Zayed Road, Dubai City) and Abu Dhabi (LicenceNo.: 13/952/2008, Registered Office: Al Jazira Towers, Hamdan Street, PO Box 2734, Abu Dhabi).Barclays Bank PLC in the Qatar Financial Centre (Registered No. 00018) is authorised by the Qatar Financial Centre Regulatory Authority (QFCRA). Barclays Bank PLC-QFCBranch may only undertake the regulated activities that fall within the scope of its existing QFCRA licence. Principal place of business in Qatar: Qatar Financial Centre, Office1002, 10th Floor, QFC Tower, Diplomatic Area, West Bay, PO Box 15891, Doha, Qatar. Related financial products or services are only available to Business Customers asdefined by the Qatar Financial Centre Regulatory Authority.This material is distributed in the UAE (including the Dubai International Financial Centre) and Qatar by Barclays Bank PLC.This material is distributed in Saudi Arabia by Barclays Saudi Arabia ('BSA'). It is not the intention of the publication to be used or deemed as recommendation, option oradvice for any action (s) that may take place in future. Barclays Saudi Arabia is a Closed Joint Stock Company, (CMA License No. 09141-37). Registered office Al FaisaliahTower, Level 18, Riyadh 11311, Kingdom of Saudi Arabia. Authorised and regulated by the Capital Market Authority, Commercial Registration Number: 1010283024.This material is distributed in Russia by OOO Barclays Capital, affiliated company of Barclays Bank PLC, registered and regulated in Russia by the FSFM. Broker License#177-11850-100000; Dealer License #177-11855-010000. Registered address in Russia: 125047 Moscow, 1st Tverskaya-Yamskaya str. 21.This material is distributed in Singapore by the Singapore branch of Barclays Bank PLC, a bank licensed in Singapore by the Monetary Authority of Singapore. For matters in
connection with this report, recipients in Singapore may contact the Singapore branch of Barclays Bank PLC, whose registered address is One Raffles Quay Level 28, SouthTower, Singapore 048583.Barclays Bank PLC, Australia Branch (ARBN 062 449 585, AFSL 246617) is distributing this material in Australia. It is directed at 'wholesale clients' as defined by AustralianCorporations Act 2001.IRS Circular 230 Prepared Materials Disclaimer: Barclays does not provide tax advice and nothing contained herein should be construed to be tax advice. Please be advisedthat any discussion of U.S. tax matters contained herein (including any attachments) (i) is not intended or written to be used, and cannot be used, by you for the purpose ofavoiding U.S. tax-related penalties; and (ii) was written to support the promotion or marketing of the transactions or other matters addressed herein. Accordingly, you shouldseek advice based on your particular circumstances from an independent tax advisor. Copyright Barclays Bank PLC (2013). All rights reserved. No part of this publication may be reproduced in any manner without the prior written permission of Barclays.Barclays Bank PLC is registered in England No. 1026167. Registered office 1 Churchill Place, London, E14 5HP. Additional information regarding this publication will befurnished upon request. AS6911