Freeman & Co.

LLC
Investment Banking State of Affairs 2009 Q1
SAMPLE PAGE ONLY
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 Index

1. 2009 Global Investment Banking Outlook

• By region page 4
• By product page 5
• By industry page 6
• Competition landscape 2006 vs. 2008 page 7
2. Investment Banking Fee Pools Summary
• By region page 9
• By product page 10
• Statistical overview from 1998 to 2008 page 11

Freeman & Co. LLC

Source: Thomson Reuters / Freeman & Co.
2
 Index (continued)

3. Analyses & Trends

• European rights issuances may spur US & Asia companies to raise new equity capital page 13
• Convertible bond market comes to a halt as its investor base evaporates page 14
• Corporate investment grade bond fee pool likely to increase in 2009 page 15
• Yield hungry investors are moving into Investment Grade corporate bonds in 2009 Q1 page 16
• High yield issuances also gained some traction in Q1, but growth was limited to BB rated page 17
• Lack of institutional buyers hurt the leveraged loan market in 2008 page 18
• Securing acquisition financing is likely to continue to prove difficult in 2009 page 19
• Private equity firms adapt to the lack of financings and use their cash to make acquisitions page 20
• Private equity firms will have to exit their portfolio companies by 2011/2012 page 21
• Major US and Europe lending institutions have retreated to their home markets… page 22
• …. Which creates opportunities for local players in some emerging markets like India page 23
• Resilience of Asian bond activity depends on national market characteristics page 24

Freeman & Co. LLC

Source: Thomson Reuters / Freeman & Co.
3
Global investment banking 2009 outlook – by region
Americas Europe Asia
IB Fee Pool ($Bn)

FY 2008 34.0

FY 2009 Forecast
27.2
23.5
Global IB Fees 2008
$69.1 Bn 16.9 11.6
-20%
9.3
- 23% -28% -20%

Global 2009 Forecast

$53.4 Bn • Fee pool estimated to
contract by 20% in 2009
• High volatility in stock market
will continue to dampen IPO
activity until 2010
• Cash-rich companies take
advantage of depressed
stock prices to make
strategic acquisitions
• Fee pool estimated to contract
by 28% in 2009
• Decline led by UK, Russia,
and CIS where banks are
severely hit by economic
crisis
• Increase in rights offerings
was driven by financial
institutions to boost their Tier
1 capital ration in 2008. In
2009, rights issuances will be
driven by corporations to
reduce their debt ratio
• Fee pool estimated to
contract by 20% in 2009
• China will cushion some
of the fee contraction in
DCM and M&A as its
domestic bond market
continues to develop
• India may see an
increase in lending by
domestic banks as
foreign banks pull out
from emerging markets

As access to equity capital markets continues to be constrained, private equity firms will have to
focus on debt restructuring and operational improvements

Freeman & Co. LLC

Source: Thomson Reuters / Freeman & Co.
4