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Had a long discussion with Dave Snyderman. We feel strongly that the arb won 't support higher fees. Also,
manager fees are coming down, each deal we've done has been at progressively lower fees and we believe this
trend will continue
All that being said, I can do 10bp senior, 2.5bp sub. and 20% of excess cash flow after cumulative equity 18%
IRR. Our goal is to partner with managers and do a series of deals. there are two managers with whom we are
already on our third deal (and the most recently inked of those was done at 10 senior only plus incentive). I think
the cumulative business will be worthwhile even if you feel the first deal is too skinny.
Appreciate your consideration of our position. hope we can work something out.
I'm around this weekend to discuss.
Rega~d$ . Jim
Jim
Thanks
aps
Andrew P. Shook
President & Chief (nve~tment Officer
(schl.l$ Capital Management. LLC
712 5th Ave. 10th Floor
New York. NY 10019
8/25/2009
Re: Deal status Page 1 01'3
Seems like we're about ready to go, I just want to make sure we're all on board as far as the target portfolio, The
compromise we made was to do a 100% synthetic deal for ease of execution in exchange for getting the fee
structure we required . One of the benefits of this is that it gives us great flexibility in the construction of the
portfolio. We think the recent dramatic widening in spreads has created an excellent environment for ramping a
deal and want to make sure that we take full advantage of this.
The original portfolio target spreadsheet that' have, and I missed the last team call SO I'm probably a generation
behind, had a strangely low spread target. That of course would not at all be beneficial to us. I have attached the
target portfolio that I would like for this deal with target spreads that I believe are very achievable in the current
market Given the breadth of collateral to choose from in a synthetic deal. I'm sure this will work for everyone
Appreciate all the work to date and looking forward to a great deal.
Have a nice weekend everyone.
-Jim
8125/2009
j
/ . Page 1 of 1
Of course, the actual security selection is totally your purview. I just wanted to make sure the overall portfolio
characteristics worked for our strategy.
I look forward to starting right away.
Thanks for working thru this with me.
-Jim
Jim
Sorry for the delay ... ..1have been slammed all day. I just rang and rolled into \loice mail.
We performed much analysis regarding execution. We have a comfort level surrounding the 160 WAS target
That said, I want to make sure we all understand and are comfortable witl1 the Resource Americallschus
philosophy.
Simply put, Ischus will buy credits. not spreads. Relative value? Yes. Will we take a view? Yes But we will not
assemble a portfolio we are not proud of and feel strongly about in the name of a spread target.
If we are all in agreement on this, we should push ahead 100%. If not. we should rethink the trade.
Regards,
Ap$
Andrew P. Shook
President and CIO
Ischus capital Management, U.c
712 FIflt1 Avenue
10th ~Ioor
New Vorl(, NY 10019
8/25/2009