Investment Equity Cushions Support High Recovery
Rates Historically
• Portfolio Advisor investment selection emphasizes meaningful equity cushion and places significant value in analyzing values of investments
• Portfolio Advisor calculates equity cushion at the time of investment and updates underlying investment valuations each quarter
— Valuation using complementary methods, including DCFs, public trading comparables, and precedent MIA transactions with
consideration of equity contributions (and book values)
— Portfolio Advisor valuation work is prepared utilizing a conservative investment case
Distribution of Recovery Rates by Equity Cushions'
Recovery Rate (%)
100%
80%
60%
40%
20%
0%
<10% 10%-20% 20%-30% 30%•40% 40%-50% 50%60% 60%-70% 70%80% 80%-90%
Eqtity Cushion (%)
(1) Instrument Discounted Recovery from Moody's 'Lessons from a Trillion Dollars in Defaults- April 2017.
An equity cushion may not guarantee against a potential rating down-grade
Deutsche Asset Management Infrastructure Debt Presentation: RIN II Equity
March 2018 30
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