Morgan Stanley

Morgan Stanley Morgan Stanley Sales & Trading Investment Grade Top Ideas April 3, 2017 THIS IS SALES AND TRADING COMMENTARY PREPARED FOR INSTITUTIONAL INVESTORS: it is NOT a research report: tax, legal, financial, or accounting advice: or an official confirm. The views of the author may differ from others at MS (including MS Research). MS may engage in conflicting activities -- including principal trading before or after sending these views -- market making, lending, and the provision of investment banking or other services related to instrumentslissuers mentioned. No investment decision should be made in reliance on this material, which is condensed and incomplete: does not include all risk factors or other matters that may be material: does not take into account your investment objectives, financial conditions, or needs: and IS NOT A PERSONAL RECOMMENDATION OR INVESTMENT ADVICE or a basis to consider MS to be a fiduciary or municipal or other type of advisor. It constitutes an invitation to consider entering into derivatives transactions under CFTC Rules 1.71 and 23.605 (where applicable) but is not a binding offer to buy or sell any financial instrument or enter into any transaction. It is based upon sources believed to be reliable (but no representation of accuracy or completeness is made) and is likely to change without notice. Any price levels are indicative only and not intended for use by third parties. Subject to additional terms at EFTA00598382 Morgan Stanley U.S. CORPORATE CREDIT ANALYTICS INVESTMENT GRADE MONTHLY TOP IDEAS APRIL 2017 Sector & Desk Analyst _AL Company Na Fins Autos/Parts i Airlines i Rails / Chems / Rentals Brandon Hole / Jared Zunent American International Group Methanex Corp Sherwin-Williams Corp Progressive Corp AIG 4.875% '22 MXCN 5.65% '44 SHW 3.45% '25 PGR 2.45% '27 Baal / BBB+ Baa3 / BB+ A3 /A A2 /A Long Long Short Short 118 285 108 82 212-761-2093 Energy / Pipelines Continental Resources CLR 3.8%'24 Ba3 / BB+ Long $94.50 / 4.71% Jun McAuliffe / Cameron Thum Sabine Pass Liquefaction COP 5% '27 Bal / BBB- Long $104.487 / 4.41% -/212-761-1464 Cenovus Energy CVECN 6.75% '39 Ba2 / BBB Long 256 / 5.60% Enable Midstream Partners LP ENBL 4.4% '27 Baa3 / BB+ Long 206 / 4.47% EnLink Midstream Partners LP ENLK 4.85% '26 Ba2 / BBB- Long 193 / 4.35% MPLX MPLX 4.875% '25 Baa3 / BBB- Long 172 / 4.12% Valero Energy Partners VLP 4.375% '26 Baa3 / BBB- Long 182 / 4.24% Williams Cos WMB 7.75% '31 Ba2 / BB+ Long $118.75/5.79% Enbridge Energy Partners EEP 5.875% '25 Baa3 / BBB Short 180 / 4.20% Marathon Oil Corp MRO 3.85% '25 Bal / BBB- Short 1691 4.10% Plains All American PM 4.9% '45 Baa3 / BBB- Short 232 / 5.36% Spectra Energy Partners SEP 3.375% '26 Baa2 / BBB+ Short 158 / 4.00% Valero Energy VLO 3.4'26 Baa2 / BBB Short 160 / 4.00% Metals & Mining Newcrest Mining NCMAU 5.75%'41 Baa3 / BBB- Long 238 Jeff Cramer/ Vincent Molinari / 212-761-2267 Telecom / Cable / Media / Towers Cox Communications COXENT 4.5% '43 Baa2/BBB/BBB+ Long 233 David Hamburger Lindsay Tyler Viacom Inc. VIA 5.85% '43, VIA 4.375% '43 Baa3/BBB-/BBB Long 240,223 212-761-1580 The Walt Disney Co DIS 3% '46 A2/ANA Short 90 QVC Inc. QVCN 5.125 % '22, QVCN 5.45% '34 Ba2/BBB-/BBB- Short 228,325 AT&T Inc. T 5.45% '47, T 4.25% '27 Baal/BBB+/A- Short 228,167 Verizon Communications VZ 5.5% VZ 4.125% '27 Baal/BBB+/A- Short 216,152 Tech Seagate Technology STX 4.875% '27 Baa3 / BBB- Long $93.625 / 5.71% Daniel Fuss / Lindsay Tyler / 212-761-1236 Healthcare Celgene Corp CELG 3.875% '25 // CELG 5% '45 Baa2 / BBB+ Long 11 Long 116.5/1163.5 John Lane Penigo Co PLC PRGO 2.3% '18 // PRGO 3.5% '21 Baa3 / BBB- Long // Long 75 // 102 /212-761-2540 Boston Scientific BSX 3.850% '25 Baa2 / BBB- Short 124 Gilead Sciences Inc GILD 2.95% '27 // GILD 4.15% '47 A3 /A Short // Short 119.5 // 152.5 Teva Pharmaceuticals TEVA 2.8% '23 // TEVA 3.15% '26 Baa2 / BBB Short // Short 176.5 // 176.5 Retail / Restaurants f Tobacco / Darden Restaurants Inc DRI 6% 35 / DRI 6.8% 37 Baa3 / BBB Long I/ Long 0+276 /1 9+250 Consumer Products The Gap Inc / Kohl's Corp GPS 5-year CDS / KSS 5-year CDS Baa2 / BB+ // Baa2 / BBB- Long 11 Short +310 // +235 Chase Lancaster Macy's Retail Holdings M 4.375% '23 /I M 6.375%'37 Baa3 / BBB- Long 11 Short g+225bps // g+345 / 212-761-2877 2 EFTA00598383