EFTA01385489

January 2018 HY Corporate Credit HY Multi Sector.Media. Cable & Satellite Frontier capital structure, particularly if the broader HY market has a more challenging year than it experienced in 2017. . Sell Frontier 10.5% Sr Notes due 2022: $77.00, 17.9%, 1,566 bps Buy Frontier 7.125% Sr. Notes due 2023: $67.50, 16.9%. 1.470 bps DISH — BUY: Each time DISH bonds back up we revisit our thesis, but generally always come back to three tenets: it's one of the best cash generators relative to total debt in our coverage space (FCF / debt of nearly 10%), the concerns around the industry and specifically DISH's business model are overdone, and there's an asset on Network's balance sheet (spectrum) that we believe will also help propel forward the legacy DBS side of the house. It's a mature business and management has been very vocal and honest about that, but as we mentioned in our Cable / Pay-TV overview, the inevitable acceleration of the decline in linear-TV hasn't materialized in the way bears predicted. Additionally, the DBS industry has been quick to transition to take advantage of the growing demand for OTT services and has created two of the best services in the industry. They're lower margin subs absolutely, but it stems the impact of outright losing all the cash from the churned DBS subscribers. Given the maturity of the business, we also expect the Restricted Group to de-lever, particularly as DISH exists its spectrum accumulation phase and pivots towards one of spectrum commercialization. At nearly 7% we think DISH remains cheap. DISH 7.75% Sr Notes due 2023: $105.50, 6.89%, 440 bps Intelsat - BUY Longer-Dated Jackson: It's been another whirlwind year for Intelsat - a failed Softbank deal, liability management exercises, potential monetization of spectrum assets, multiple Epic satellite launches, industry multiple contraction amongst its peer group. While the fundamentals of the business remain in flux with the ex-mobility growth in Network Services yet to turnaround, an approaching media renewal cycle that will have a hit to revenues, and -20% of government contracts up for renewal in 2018, we still think there is value at Jackson with additional value to be had in the longer- dated '23s and '25s. Despite near-term headwinds, Intelsat has gone through certain various capital structure activities to extend the maturity wall, effectively buying the company more time to prove the use case for the next gen HIS works. Guidance for 2018 is now widely expected to be flat to down from an EBITDA perspective (a phenomenon that can be seen explained via the recent moves in Lux bonds), but management remains confident that the only issue up for debate is one of timing on when growth will return. As we progress through 2018 and the company becomes more positive about the trajectory of the business into 2019, we think the Jackson box certainly rallies. Further, as the industry overall begins to trend closer towards the inflection point in HTS vs legacy services, we think industry valuations will improve, providing further cushion to the Jackson story. Intelsat 5.5% Senior Notes due 2023: $82.00, 9.75%, 750 bps Intelsat 9.75% Senior Notes due 2025: $96.50, 10.43%, 795 bps Page 216 Risks include accelerated detedoradon of subscriber bends, mwsdn compressiort elevated C•w&c and baements/ issuance to fund spectrum purchases out d the Ratted Group. Risks include slower growth on Epic biros, bss of government contact worse media renewal pricing then expected Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0086775 SDNY_GM_00232959 EFTA01385489