Real Capital Session A1 Andrew Huntley Tuesday, February 26, 2013 - PowerPoint PPT Presentation

To be among the best institutional investment managers and inspire the confidence of Albertans Real Capital Session A1 Andrew Huntley Tuesday, February 26, 2013 1 Confidential - Internal Use Only

Guess the Broker… “If you squint, you can see the covenant” Only job he’s ever had “The spread is so high, it’s up in the nosebleeds…” Hosted breakfast “I need an indicative quote” “Dear Lender” , Lender, Broker Servicer Thunder Bay is a major centre Four kids and a 2-seater sports car?? Doesn’t have an office in Toronto Will never have an office in Toronto Still thinks Winnipeg is the financial capital of Canada 100 years old Thinnest package on the street I used to work there 2 Confidential - Internal Use Only

Illustrative Capital Stack Stabilized Canadian or U.S. Deal Non-Stabilized / Transitional U.S. Deal First Mortgage First Mortgage Loan-to-Value 60-65% Loan-to-Value 35-55% Government Benchmark Bond + Spread of 1.85-2.25% LIBOR + Spread of 2.00-3.50% All-in fixed rate 3.85-4.25% All-in floating rate 2.25-3.75% 5 to 10 year term 1 to 5 year term Senior Mezzanine Loan-to-Value 45-65% LIBOR + Spread of 6.00-9.00% All-in floating rate 6.25-9.25% Equity Junior Mezzanine 35-40% Yields 10% + Equity 3 Confidential - Internal Use Only

Bonds vs. GICs Corporate spreads have contracted significantly in 2012 DEX All Government Bond Index (Blue) returned 2.11% in 2012 DEX All Corporates Bond Index (Yellow) returned 6.22% in 2012 Typical bond funds yielded over 4.0% 4 Confidential - Internal Use Only

Pension Fund Composite Asset Mix Shift from traditional to alternative investments… *Data from Pension Investment Association of Canada 5 Confidential - Internal Use Only