One Bryant Park, 5th Floor, New York, NY 10036 The power of global connections" From: jeffrey E. [mailto:[email protected]] Sent: Monday, August 08, 2016 4:59 PM To: Ens, Amanda; Richard Kahn Subject: Re: Preferreds, thoughts on fixed income, mandatory converts lets buy 1 m each On Mon, Aug 8, 2016 at 4:55 PM, Ens, Amanda <[email protected] <mailto:[email protected]» wrote: For the institutional custody account I'm opening for you in the investment bank here, no leverage yet. We would need to set up prime brokerage and we're not there yet. If you plan to use a lot of leverage, I can try to get an exception; prime brokerage usually requires pretty high trading volumes. If we can simply execute the purchase and deliver these to your custody at MS or DB and use their margin, it should be the standard 50% for purpose lending; perhaps higher if you have a non-purpose line. Note that since mando convert preferreds are highly correlated to the stock, the vol is much higher than on a bank preferred. The AGN A Pfd is has a 19% 30-day vol (vs 24% for the common stock) and 30% 90-day vol (vs 41% for the common stock). For comparison, PFF had a 4.5-5% vol. From: jeffrey E. [mailto:[email protected] <mailto:[email protected]> ] Sent: Monday, August 08, 2016 4:40 PM To: Ens, Amanda Subject: Re: Preferreds, thoughts on fixed income, mandatory converts can we put leverage on them, if so what rate 6 EFTA_R1_00107685 EFTA01785504

On Mon, Aug 8, 2016 at 4:30 PM, Ens, Amanda <[email protected] <mailto:[email protected]> wrote: AGN mandatory convert preferred Ticker: AGN A Pfd Coupon: 5.5% Maturity: 3/1/2018 Pfd Price: 881.38 AGN stock ref: 248.31 Convert low strike: 288.00 (at maturity, if AGN is at or below 288, you get 3.4722 shares) Convert high strike: 352.80 (at maturity, if AGN is at or above 352.7959, you get 2.8345 shares) Strip yield: 6.3% (versus common stock which pays no dividend) BofAML price target: $294 (Buy, US-1 top picks list) Upside to BofAML price target: 18.4% If hold pref to maturity and stock is up 25%: 24.4% If hold pref to maturity and stock is down 25%: -15.7% QDI-eligible: No Amount outstanding: $5.06 bn TEVA mandatory convert preferred Ticker: TEVVF Pfd Coupon: 7.0% Maturity: 12/15/2018 Pfd Price: 895.07 TEVA stock ref: 54.21 Convert low strike: 62.50 7 EFTA_R1_00107686 EFTA01785505

Convert high strike: 75.00 Strip yield: 7.9% (vs common stock at 2.5% div yield) BofAML price target: $72.00 (Buy) Upside to BofAML price target: 32.8% If hold pref to maturity and stock is up 25%: 31.3% If hold pref to maturity and stock is down 25%: -7.8% QDI-eligible: No Amount outstanding: $3.7125 bn Assumes convert held to maturity; all coupons included Source: Bloomberg Amanda Ens Director Bank of America Merrill Lynch Merrill Lynch, Pierce, Fenner & Smith Incorporated One Bryant Park, 5th Floor, New York, NY 10036 Phone: 212.449.7781 <tel:212.449.7781> Mobile: 917.386.3280 <tel:917.386.3280> [email protected] <mailto:[email protected]> The power of global connections"' 8 EFTA_R1_00107687 EFTA01785506