EXHIBIT 232¶
From: Paul S njpmorgan.com> To: Brad Wechsler <BVVechslereeNslIc.com> CC: Team < ;Jeffrey Epstein (jeevacationggmailcom) <jeevacation©gmail.com>;Nelson, Justin D” <justin.d.nelsongjpmorgan.com> Sent: 10/26/2015 10:03:12 PM Subject: Proposed Portfolio Attachments: Consumer.zip; Defense.zip; Gaming.zip; Healthcare.zip¶
Brad,¶
Below would be our proposed investments breakdown for $20mm:¶
| Theme | Proposed Investment |
|---|---|
| Consumer Discretionary | $ 2,500,000 |
| Interactive Gaming | $ 2,500,000 |
| Healthcare | $ 2,500,000 |
| Defense | $ 2,500,000 |
| Preferreds | $ 6,000,000 |
| HY: Frontier 8 ½% 04/15/20 | 1,000,000 |
| Structured Notes: TBD | $ 3,000,000 |
| Total | $ 20,000,000 |
1. Consumer Discretionary:¶
Rising disposable income, lower oil prices, labor market strengthening and tame inflation should continue to boost confidence and spending.¶
| -------- | ---------------- | -------- | -------- | | | CO/THE | OW | 130.00 | | NKE | NIKE INC -CL B | OW | 135.00 | | | WHOLESALE CORP | OW | 162.00 | | HD | HOME DEPOT INC | OW | 127.00 | | RAD | RITE AID CORP | OW | 10.00 |¶
2. eGaming / Interactive Gaming:¶
There are more than 700 different eGames events annually (ESPN plans to broadcast an eGame event for the first time in 2016), with a fan base that exceeds 260 million people. 2015 marks the first year global games market sales are projected to overtake filmed entertainment bringing in $91.5 billion and is forecast to rise to $113 billion by 2018. Despite an addressable market many times larger than ten years ago. valuations for the leading gaming vendors are trading at significantly lower multiples than at the top of the last cycle.¶
| Ticker | Name | Rating | Target | ADR |
|---|---|---|---|---|
| UBI FP | Case 1:22-cv-1-0904-JSR | Document 285-80 | Filed 08/15/23 |
|---|---|---|---|
| UBISOFT ENTERTAINMENT | OW | 20.00 | |
| SQUARE ENIX HOLDINGS | |||
| 9684 JT | CO LTD | OW | 4000 |
| 7974 JP | NINTENDO CO LTD | N | 19,000.00 |
| NVDA | NVIDIA CORP | N | 24.00 |
| 700 HK | TENCENT HOLDINGS LTD | OW | 187.00 |
3. Healthcare:¶
The percentage of the American population that is over 65 years old has increased from 13% in 2010 to an estimated 18% in 2025. Company pipelines have also become more robust with a 54% increase since 2007 in the number of drugs gaining FDA approval. We think the sell-off which was due to the practices of a few select companies was too broad and overdone. We would use this as an opportunity to add to our core names.¶
| -------- | ------------------ | -------- | -------- | | | CO | OW | 78.00 | | PFE | PFIZER INC | OW | 40.00 | | MRK | MERCK & CO. INC. | OW | 66.00 |¶
4. Defense:¶
Geopolitical events in Russia. the Middle East and the South China Sea are forcing governments to quickly ramp up defense spending. Defense stocks are well positioned in a low-growth environment with high earrings visibility, improving defense budget outlooks, and good shareholder return¶
| -------- | ------------------ | -------- | -------- | | | CORP | OW | 169.00 | | | CORP | N | 198.00 | | BA | BOEING CO/THE | OW | 177.00 | | RTN | RAYTHEON COMPANY | OW | 130.00 | | LMT | LOCKHEED | CORP N | 225.00 |¶
5. Preferreds: (We would like to put one turn of leverage on these in the margin account)¶
Preferreds performed quite well amidst recent market turbulence, with rapid price and liquidity recovery. While Preferreds, as hybrid securities, might have been expected to experience more volatility during this period, we believe that the fundamental strength of bank balance sheets as well as the securities’ fixed income duration (as rates rallied) cushioned the sector. The broader firm tone in the markets coupled with the fact that bank earrings season is largely completed and the market saw no preferred issuance is creating a strong technical backdrop for the assets.¶
Indicative Pricing¶
| CUSIP/ISIN | Security | Ask | ||||
|---|---|---|---|---|---|---|
| 38148BAB4 | GS 5 3/8 Perp | 99300 | Ba1 / BB | 5/10/2020 | 5.50 | 3mL+392.2bps |
| 617474AA9 | MS 5.55 Perp | 100.750 | Ba1 / BB | 7/15/2020 | 5.37 | 3mL+381bps |
| 46625HJQ4 | JPM 6 3/4 Perp | 106.875 | Baa3 / BBB- | 2/1/2024 | 5.70 | 3mL+378bps |
| 060505EN0 | BAC 6.1 Perp | 99.750 | Ba2 / BB+ | 3/17/2025 | 6.13 | 3mL+389.8bps |
| 172967JM4 | C 5.95 Perp | 96.875 | Ba2 / BB+ | 5/15/2025 | 6.39 | 3mL+390.5bps |
6. Frontier Communications:¶
FTR 8 X% 04/15/20¶
Indicative Offer 104.50¶
YTM: 7.30%¶
Frontier is the largest rural telecom company in the U.S.. focused on providing services to small and medium-sized cities. With a market cap of $5bilfion. FTR is the 5th largest US wireline company. Over the last 5 years. FTR has increased revenue 5x and has achieved geographc diversification & product mix through tactical acquisitions of broadband assets from both AT&T and Verizon. The bonds offer attractive relative value, picking up -200bps vs. BB comps and -50bps over single-B comps. Frontier issued $6.6bn of bonds on September 11th to back its purchase of landline assets from Verizon Communications, a deal largely anticipated by the market. Post issuance, the supply overhang has now been virtually removed from the Frontier complex.¶
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- Structured Notes: In these volatile markets, we continue to like structured notes that provide protection on the downside coupled with unlimited upside or double-digit coupons. We will show these as we think pricing looks interesting.
Paul I Maraging Director I Global kwestment Oppontritles Group1J.P. Securities LLC I J.P. Private Bank I J.P. Chase Bank NA¶
320 Park Avenue. 14th Floor. New lbrk. NY 1002211 (212)622-2770 1 F: (212) 310-01081¶
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