CORE Track Session Credit Market Update: Is the Thaw Real? Wednesday, March 23, 7:45 – 8:30 a.m. Sponsored by William Blair & Company and BDO

Credit Market Update: Is the Thaw Real? Moderator: Mark Cordes, Audax Group Panel: Juan E. Alva, Fifth Street Finance Tom Klimmeck, Madison Capital Partners Charles F. Riceman, Golub Capital Brian Harrer, U.S. Bank Sponsored by:

Private Equity Outlook 3 Deals and Capital Invested, US Private Equity Capital Invested ($B) $ 173 $ 307 $ 596 $ 217 $ 61 $ 145 # of Deals Source: PitchBook

Private Equity Outlook 4 Quarterly Deals and Capital Invested, 2007 – 2011 Q1 Source: PitchBook

Private Equity Outlook 5 PE Backed Companies by Vintage, Year of Investment PE-Owned Companies Source: PitchBook

Private Equity Outlook 6 PE Exits, # of US PE Exits Corporate Acquisition IPO Secondary Transaction Total Count of closedate Source: PitchBook

Private Equity Outlook 7 PE Backed Companies, Source: PitchBook

Loan Market Update 8 Middle Market Loan Volume, Source: Standard & Poor’s 4Q10 Review  Increased volume driven by: (i) economic recovery; (ii) tax driven M&A activity; and (iii) increased liquidity  Refinancings (32% share) and dividend recaps (20%) were largest use of proceeds  LBO’s in ‘10 represented 16% of volume vs. 49% in ‘07  Healthcare is largest industry segment at 12% share, up from 10% in ‘07  Computer/electronics, chemicals and food/beverage were biggest share gainers in ‘10 vs. ‘07  Services/leasing, utilities, printing/publishing, and oil/gas were biggest share losers in ‘10 vs. ‘07 Market Loan Volumes – New Issues Middle Market Sponsored Volume

Loan Market Update 9 Distribution of Loan Maturities, Market Loan Volumes – New Issues Middle Market Sponsored Volume Total Additions New Deals Facility Increases Amend/Extend Subtractions Paydowns Partial Paydowns HY Take-outs Defaults Amend/Extend As of 12/31/ As of 12/17/ Significant progress was made in extending near- term loan maturities in In addition to nearly $50 billion of Amend-to-Extend (“A-to-E”) deals, issuers printed more than $114 billion of bond-for-loan takeouts, $43 billion of which repaid loans. Arrangers expect A-to-E activity to remain strong in 2011 as issuers look to address 2013 / 2014 loan maturities through IPO’s, M&A activity, cash flow or full refinancings. Loan Maturity Additions and Subtractions,

Loan Market Update 10 Middle Market Pricing, Source: Standard & Poor's 4Q10 Review and Madison Capital *MM Sponsor pricing is primary issuance, tranche weighted, and includes upfront fees amortized over three years. Source: Standard & Poor's 4Q10 Review, Fannie Mae, Bloomberg and Madison Capital Primary Spreads for B+/B Credits Vs. New Issue MM Sponsor Deals All-In Cash Coupon (B+/B credits)

Loan Market Update 11 Debt Multiples / Equity Contributions Source: Standard & Poor’s 4Q10 Review Average Leverage Multiples of LBO Loans Deals < $50MM in EBITDA LBO Purchase Multiples & Equity Contributions Deal < $50MM in EBITDA

Loan Market Update 12 Institutional Loan Investors Source: Standard & Poor’s 4Q10 Review Investor Market Share for Highly Leveraged Issuers < $50 million in EBITDA  Health of the lending market improved significantly in 2010  Default rates at 60%  Increasing liquidity into the mid-market is being driven by:  Accelerating repayment rates  Improved CLO balance sheets  Improved commercial bank balance sheets  Revitalization of structured products groups within banks  Growing hunger for yield  Optimism continues to build for both large market and mid-market CLO issuance; ~50% of CLO’s reach the end of their investment period by 2012  “Loan ratings” management remains key issue for mid-market CLO managers  Loan mutual funds are biggest driver of new money into large, liquid market

Coming Up Next... ACG Core Track (Elizabeth G) 8:45 - 9:30 a.m. Capital Markets Update: From Leverage to IPO 10:00 – 11:00 a.m. The Sell Side Process: Tactics for a Changing Game 11:15 a.m. – Noon Lower Middle Market Update 2:00 – 3:00 p.m. Strategies for Add-On Acquisitions Noon – 1:45 p.m. Lunch & Keynote with General Stanley McChrystal (Ret) Sponsored by Fifth Street Capital (Elizabeth Ballroom)