#MIGlobal

Default Signals

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Speculative Grade DefaultsNote: Please see disclaimer on the last page of this presentation for more information. Views expressed are those of BSP. Opinions, estimates, forecasts and statements offinancial market trends above are based on current market conditions and are subject to change without notice. While the information provided here is believed to be reliableit should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors.Source: Moody’s. Data as of November 30, 2015.*Assumes previous spike was in 1983. 

7 years*

8 years 7 years 7 years

#MIGlobal Source: St. Louis Federal Reserve Database. Data as of 04/25/2016.

Nonfinancial Corporate Debt as a Percent of GDP

Nonfinancial Corporate Debt has Risen to Prior Recession Levels

20%

25%

30%

35%

40%

45%

50%Recession Non-financial Corp. Debt / GDP

Source:ThomsonReuters(4/07/16).

Central Bank Target Interest Rates Remain Low

‐1

0

1

2

3

4

5

6

7

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Percent

European Central Bank

Bank of England

Bank of JapanU.S. Fed

#MIGlobal

Source: Bureau of Economic Analysis. Data as of 12/31/2015. We calculate a measure of the debt service ratio (interest only) for nonfinancial corporate business using the National Income and Product Account measures of “net interest and misc. payments” and “undistributed profits after tax with inventory valuation adjustment and capital consumption adjustment, adding back capital consumption (depreciation).

Nonfinancial Corporate Interest Payments as a % of Estimated Cash Flow

Manageable Interest Burdens Mitigate Default Risk in the Near Term

0.00%

1.25%

2.50%

3.75%

5.00%

6.25%

7.50%

8.75%

20%

30%

40%

50%

60%

70%

80%

90%U.S. Corporate 12-Month Trailing Default Rate (rhs) Interest payments as a % of Cash Flow Estimate (lhs)

#MIGlobal

MidCap: Growth of balance sheetMidCap has demonstrated strong growth since inception driven by a combination of organic growth and recent acquisitions

205 400 782  957 

1,666  1,735 

5,608 

0

1,000

2,000

3,000

4,000

5,000

6,000

2009 2010 2011 2012 2013 2014 2015

US$ Millions

Note: 2015 includes ~$1.9 billion of loans acquired from MGEC consisting primarily of leveraged loans.Source: MidCap Financial (12/2015).

#MIGlobal

MidCap: Diversification across businessesToday MidCap is a diversified lender across eight business areas

2013

Healthcare Asset Based Lending58%

Healthcare Real Estate

13%

Healthcare Leveraged Loans 18%

Life Sciences11%

2015

Healthcare Asset Based Lending24%

General Asset Based Lending2%

Lender Finance6%

Healthcare Real Estate

7%

General Real Estate

6%

General Leveraged Loans44%

Healthcare Leveraged Loans4%

Life Sciences 7%

Source: MidCap Financial.

#MIGlobal

High Yield Trading VolumesIn March 2016, average daily High Yield trading volumes were $10 billion representing the highest on record

0

2

4

6

8

10

12TRACE High Yield Average Daily Trading Volumes by Month ($ Billions)

Source: As of March 31, 2016; SIFMA / FINRA TRACE volumes.

Average

#MIGlobal

Market Liquidity Profile

0%

40%

80%

120%

160%

200%

0

1

2

3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016A

High Yield Trading Volumes ($ Trillions) % of HY Market Outstandings

Source: TRACE HY Volumes as of March 31,2016; SP LCD for High Yield Outstanding.

High Yield Trading Volumes relative to Market Size

US HY Bond Market Size

0.6 0.7 0.7 0.7 1.5 1.6 1.70.8 1.0 1.1 1.3 1.7

There can be no assurance that the investment opportunities described herein will be available in the future or, if available, achieved.This presentation is a summary and does not constitute an offer to sell or a solicitation of any offer to buy or sell any securities.

Please refer to the page entitled “General Statement” at the end of this presentation when reviewing the information presented herein.

6/30/2014 3/31/2016

Sharp Increase in Stressed High Yield Credits1

1 Based on market value of bonds outstanding, $ bnSource: Bank of America Merrill Lynch, DW Partners; as of 3/31/2016

Spread

201‐500 bps

0 – 200 bps

500‐1,000 bps

>1,000 bps

Total Outstanding HY Debt: $1,344 bn

Total Outstanding HY Debt: $1,174 bn

$170 bn

$1,008 bn

$134 bn

$31 bn

$584 bn

$357 bn

$197 bn

$36 bn

There can be no assurance that the investment opportunities described herein will be available in the future or, if available, achieved.This presentation is a summary and does not constitute an offer to sell or a solicitation of any offer to buy or sell any securities.

Please refer to the page entitled “General Statement” at the end of this presentation when reviewing the information presented herein.

Increased “Stressed” Corporate Credit

10

Industry Breakdown of “Stressed” Corporates1 Indicative Non-Energy Companies Trading at Stressed Levels2

1 Based on $ market value of bonds outstanding

2 Represents an indicative bond in the company’s capital structure

Source: Bank of America Merrill Lynch, DW Partners; as of 3/31/2016

Company Sector Spread Debt Outstanding1

Sprint Communications 1024 33,965

Valeant Consumer, Non-Cyclical 1029 30,883

iHeartCommunications Communications 1500 20,588

Windstream Services Communications 1071 10,853

Bombardier Industrial 1012 9,684

Scientific Games Consumer, Cyclical 1500 8,410

Teekay Corp Industrial 2000 7,443

Genworth Financial Financial 1150 6,740

Avaya Holdings Communications 2000 5,967

Navistar International Consumer, Cyclical 1372 5,286

Toys R’ Us Consumer, Cyclical 1735 5,691

Knight Capital Holdings Financial 1018 5,017

Clear Channel Worldwide Communications 1083 4,929

Neiman Marcus Group Consumer, Cyclical 1033 4,711

Hexion Inc. Basic Materials 1226 3,918

Sears Holdings Consumer, Cyclical 1409 3,144

Claire’s Stores Consumer, Cyclical 2512 2,503

Avon Products Consumer, Non-Cyclical 1221 2,314

Advanced Micro Devices Technology 1555 2,260

inVentiv Health Consumer, Non-Cyclical 1094 2,117

Energy, 36%

Basic Materials, 12%

Cons. Discretionary

12%

Communications12%

Cons. Staples9%

Industrial9%

Technology, 5%Financial, 3%Utilities, 2%

#MIGlobal

High Yield Bond Supply from Fallen AngelsThe High Yield market is expected to see $200 billion of Fallen Angels in 2016, representing over 15% of the total market

85 14 7 18 33

123

33 36

108

25 36

95

227

59 70

137 124 117

195 200

0%

5%

10%

15%

20%

25%

30%

35%

0

50

100

150

200

250

300

350

Source: Merrill Lynch research. Goldman Sachs Research for Fallen Angel Candidates based on BBB non Emerging market issuers on negative watch for downgrade. As of March 31, 2016Fallen Angels are defined as investment grade corporates whose credit rating was lowered to high yield.

% of Total US High  Yield MarketFallen Angel Volumes and Par Outstanding ($ Billions)

42%

Cumulative Fallen Angels as % of HY Outstandings

54% 40+%

2002 Cycle 2008 Cycle Current

0%

20%

40%

60%

80%

100%

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Loan mutual funds, financial and insurance companies Hedge,distressed and high-yield funds CLOs Banks

Institutional Investor Base for Non-investment Grade Loans

Sources:S&PLCD(4/11/16).

#MIGlobal

Market Dispersion by Credit Quality – Bonds

Market Dispersion by Credit Quality  Lower Quality Paper Diverging

Note: Views expressed are those of BSP. Opinions, estimates, forecasts and statements of financial market trends aboveare based on current market conditions and are subject to change without notice. Source: JP Morgan. Data presented is as of 3/24/2016.

Spread (bps) Spread (bps)

CCC

B

BBBBB200

600

1,000

1,400

1,800

2,200

Jan‐2014 Jun‐2014 Nov‐2014 May‐2015 Oct‐2015 Mar‐2016200

400

600

800

1,000

1,200

1,400

1,600

Jan‐2011 Jan‐2012 Jan‐2013 Jan‐2014 Jan‐2015 Jan‐201

CCC‐BB Spreads Differential

#MIGlobal

Source: Credit Suisse, Barclays, Citi, Guggenheim Investments. Data as of 04/22/2016. Representative Indices: Bank loans: Credit Suisse Leveraged Loan Index; High-Yield Corporate Bonds: Credit Suisse High-Yield Corporate Bond Index; AA Corporate Bonds: Barclays Investment-Grade Corporate Bond index, AA subset; Agency MBS: Barclays U.S. Aggregate Index (Agency Bond subset); CLO AA and CLO 2.0 BB: JPM CLOIE Index, CMBS 2.0 AA: Barclays CMBS 2.0 Index (AA subset), Treasuries: Barclays U.S. Aggregate Index (Treasuries subset), Non-Agency RMBS: Based on BAML and Guggenheim Trading Desk Indicative Levels.

Cross Fixed-Income Asset Class Yield and Duration

Bank Loans, CLOs, and Non-Agency RMBS Offer a Yield Advantage With Limited Duration Risk

CMBS 2.0 AACLO 2.0 AA

CLO 1.0 AA

High Yield Corporate Bonds

Bank Loans

AA Corporate BondsTreasuriesAgency MBS

CLO 2.0 BB

Non-Agency RMBS Alt-A / Option ARM

0%

2%

4%

6%

8%

10%

12%

0 yrs 1 yrs 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs 7 yrs 8 yrs

Yiel

d

Rate Duration

There can be no assurance that the investment opportunities described herein will be available in the future or, if available, achieved.This presentation is a summary and does not constitute an offer to sell or a solicitation of any offer to buy or sell any securities.

Please refer to the page entitled “General Statement” at the end of this presentation when reviewing the information presented herein.

Opportunity Set in Commercial Mortgage Markets“Wall of Maturities” in CMBS accelerates in 2016 and 2017 (USD billion)

Source: Barclays, DW Partners; as of 12/31/2015.

$0

$20

$40

$60

$80

$100

$120

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Maturing Balance, excluding defeased Balance coming open for prepayment, excluding defeased

#MIGlobal

Structured Finance IssuanceStructured Products issuance is a fraction of Corporate issuance post 2008 crisis

0

1

2

3

2005 2006 2007 2013 2014 2015 1Q2016

Structured Finance Issuance Corporate Bond and Loan Issuance

Source: As of March 31, 2016; SIFMA for Structured Finance issuance; SP LCD, Barclays Research for Corporate issuance.

US & Europe Issuance ($ Trillions)

Ratio of Structured Products to Corporate Issuance

2.0x 1.6x 1.3x 0.2x 0.3x 0.3x 0.2x

#MIGlobal

Structured Products Too Big To IgnoreStructured Products issuance is significantly lower from record levels in 2006, although current outstandings are $5 trillion representing a significant opportunity set

0

1

2

3

2006 2015

Source: As of December 31, 2015; SIFMA. Structured products include Global CDO/CLO, Global ABS, Global CMBS, Global Non Agency RMBS

Structured Products Issuance ($ Trillions)

-75%

0

1

2

3

4

5

6

7

8

2006 2015

Structured Products Outstandings ($ Trillions)

-30%

Global Liquidity – Sovereign Wealth Funds(US$ Billions)

1. Government Pension Fund of Norway $8252. Abu Dhabi Investment Authority $7733. China Investment Corp. $7474. SAMA Foreign Holdings of Saudi Arabia $6325. Kuwait Investment Authority $5926. SAFE Investment Company of China $4747. Hong Kong Monetary Authority $4428. Government of Singapore Investment Corp. $3449. Qatar Investment Authority $25610. National Social Security Fund (China) $236

Source: SWFInstitute(4/26/2016).

Increase in Corporate Cash Balances 2006 to 2016Cash holdings of publicly listed companies, percent of GDP

21%16%

4%

26%16% 15%

3%15% 13%

4%

21%

1%

115%

59% 59% 58%52%

35% 34%26% 22% 20% 19% 13%

0%10%20%30%40%50%60%70%80%90%100%110%120%130%

Japan France China Canada UK Spain SouthKorea

US Italy Brazil Germany Russia

Q12006 Q12016PercentofGDP

Note:Cashandmarketablesecurities,latestGDPdataavailable.Source:Bloomberg(4/07/16).

18 21

61

15 258

258 8

215

103 10278

60 5123 13 11

0

40

80

120

160

200

240

Apple+167%

Microsoft+387%

GE+68% Google+412%

Cisco+144%

Oracle+502%

Pfizer‐8%

Merck+63%

Chevron+40%

Q42007 Q42015US$billions

Note:CashandmarketablesecuritiesSource:Bloomberg(4/07/16).