From: "Jeffrey E." <[email protected]>

From: "Jeffrey E." <[email protected]> To: G Sera Subject: Re: Idea for trade Date: Wed, 24 Sep 2014 11:55:38 +0000 phone number today/? On Wed, Sep 24, 2014 at 4:29 AM, G Sera <1 > wrote: Ciao Jeff, a small idea for possible trade. You are the expert so please apologize me for stealing 30 seconds (you are a fast reader :) 1-Many big and profitable luxury/fashion companies have been for 2 years bugged on a monthly basis by the big banks to please accept loans at really low interests. Sometimes the push I have seen was really hard to please accept that gift, especially in the Anglo-Saxon countries. 3 CFOs have commented to me how incredibly pushy they were 2-Many of those companies cannot/do not want to deploy the money in operating investments. You can just open so many stores per year or other acquisitions. Thus they deployed the money in stock buy back (that by the way also helps greatly with stock options for managers) 3-The banks I have seen were offering from bullets to 3-6 years maturities 4-A few virtuous companies very very solid have resisted that push because they do not want to combine financial leverage with operational one. Their stock in most cases underperformed the market 5-The rest of the companies (especially the ones that cannot count on a strong US retail consumer rebound and maybe are more exposed to chine consumers) are now getting worried the impact that this extra leverage will create in the next 24-36 months when operations might not be super strong and liquidity might dry up Being beta neutral (I am since we spoke end of July), there is a significant case for the virtuous companies to overperform the rest as these loans come to expiration and there is less liquidity in the system The same thinking might apply to other industries but I have less datapoints With a simple work your teams can come up with a portfolio of 10-15 to go long and short with the above parameters Hope to see you soon Thank you GS please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited EFTA00997237 and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00997238