Timed Item: 1:00 pm
NORTHERN TRUST
Joint Meeting of the Retirement Boards
Meeting Date: 8/24/2015
Northern Trust Financials
Enduring financial strength and stability
Northern Trust Update
City of Fresno Fire and Police Retirement System &
City of Fresno Employees Retirement System
Robert Ernst, Senior Vice President
[email protected]
(312) 444-5498
©12015 Northern
Trust Corporation
A Presentation
to City
Don Anderson, Senior Vice President
[email protected]
(312) 444-5386
of Fresno Retirement Systems – August 24th, 2015
Northern Trust Overview
2
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
A Unique Business Focus
Founded in 1889, Northern Trust is a market leader of asset servicing and asset
management solutions for institutions and private clients around the globe.
Corporate & Institutional Services (C&IS)
WORLDWIDE INSTITUTIONAL INVESTORS
Asset
Servicing
Asset
Management
Assets
under custody
US $6.18 trillion
Assets
under administration
US $4.5 trillion
Wealth Management
U.S. and European PRIVATE CLIENTS
Assets
under management
US $946 billion
A highly focused business model supporting two client bases across a
single operating platform
As of 6/30/2015
Source: Northern Trust
3
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
A Unique Differentiator: Financial Strength and Stability
Northern Trust’s strong capital position, high-quality balance sheet and superior credit
ratings position us to be able to invest in our business across cycles and to withstand
unforeseen adverse developments.
Strong Capital Position
High-Quality Balance Sheet
Capital ratios all exceed regulatory classifications of “wellcapitalized.”
Balance sheet is highly liquid and low risk
Northern Trust Corporation Capital
Ratios
Q2 2015
“Well Capitalized “
Guideline
Leases &
Loans
27%
Advanced Approach
Common Equity Tier 1
12.0%
6.5%
Tier 1
12.6%
8.0%
Total
14.4%
10.0%
Supplementary Leverage
6.3%
N/A
Common Equity Tier 1
10.7%
6.5%
Tier 1
11.2%
8.0%
Total
13.2%
10.0%
NORTHERN TRUST CORPORATION
Leverage
7.6%
5.0%
Other
9%
Money
Market Assets
31%
Securities
33%
Standardized Approach
Superior Credit Ratings
No other large US bank has a higher long term rating assigned
by Standards & Poor’s and Fitch Ratings
Capital ratios are preliminary until regulatory reports have been filed
4
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Standard &
Poor’s
Moody’s
FitchRatings
DBRS
Short-Term / Commercial Paper
A-1
P-1
F1+
R-1 (middle)
Long-Term / Senior Debt
A+
A2
AA-
AA (low)
Short-Term / Deposits
A-1+
P-1
F1+
R-1 (high)
Long-Term / Deposits
AA-
A2
AA-
AA
(Aa2 deposits)
(AA deposits)
THE NORTHERN TRUST COMPANY
Current Industry and Client Themes
Industry Themes
Industry and client themes are shaping our trajectory
Economic
Headwinds

Regulatory
Pressures

Reputational
Challenges

Economic headwinds are likely to continue to result in persistent near term challenges in spite of improved
market performance in the US
More regulation increasing expenses and associated cost of doing business
Reputational issues in industry attributed to securities lending, foreign exchange, transition management,
LIBOR manipulation and Madoff-related lawsuits
Client Themes
Increasing
Complexity


Financial Pressures

Risk Management
5
Change in demand from month-end to actionable, real-time data
Continuing pressure to lower costs or evolve cost structures; growing use of diverse asset classes to
increase returns
Intensive risk management, measurement and monitoring, driving data and transparency requirements
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Growth and Complexity
1980
1990
Current
Hedge Fund
Services
Middle
Office
Outsourcing
ETFs
Tax
Transparent
Pooling
Asset
Mgmt
US
Custody
US
Custody
Credit
Treasury
Mgmt
Asset
Mgmt
Passport®
Global
Custody
Transaction
Execution
(TOE, GCM)
US / CAD
GAAP
HQ Reporting
RAS/
CLP
Securities
Lending
Treasury Mgmt
Foreign
Exchange
CAD/
US Tax
Reporting
Global
Custody
Foreign
Exchange
Collateral
Management
Transfer
Agency
Derivatives
Hedge &
Private Equity
Admin.
Intraday
Data Delivery
Global
Regulatory
Filings
Institutional
Governance
Services
Securities
Lending
CAD/
US Tax
Reporting
Hedge Fund
and Private
Monitor
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
RAS/
CLP
Credit
Regulatory
Reporting
DC Smart
Rebalancing
6
Fund
Accounting
Treasury Mgmt
OCIO
Global
Regulatory
Compliance
US / CAD
GAAP
US
Custody
Multi-Basis
Accounting
Master
Record
Keeping
Asset
Mgmt
Passport®
Australia
Investment
Acctg. and
Tax
Peek Through
IRAS
HQ Reporting
Alternative
Assets
Credit
Regulatory
Reporting
Brokerage
Transition
Management
IRAS
Mobile
Delivery
US
Insurance
Acctg. &
Sched. D
Fiduciary
Support (e.g.
Fair
Valuation)
Corporate
Cash
California Locations
10 Offices
Santa Barbara
Montecito
Santa Barbara
1485 East Valley Road
206 East Anapamu
Menlo Park
2500 Sand Hill Road, Suite 150
San Francisco
580 California Street, Suite 1800
Mill Valley
575 Redwood Highway
Pasadena
201 South Lake Ave, Suite 600
Los Angeles
2049 Century Park East, Suite 3600
Newport Beach
16 Corporate Plaza Drive
San Diego
4370 La Jolla Village Drive, Suite 1000
La Jolla
1125 Wall Street
Marin County
San Francisco
Silicon Valley
Santa Barbara
Montecito
Pasadena
Orange County
La Jolla
San Diego
Washington
Minnesota
Wisconsin
Nevada
California
Illinois
Colorado
Michigan
Massachusetts
Connecticut
Ohio
New York
Delaware
Missouri
Georgia
Arizona
Florida
Texas
7
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Public Funds Clients in California
Representative California Public Funds Clients:

City of Fresno – Fresno

Kern County Employees’ Retirement Association – Bakersfield

City of Oakland – Oakland

Los Angeles City Employees' Retirement System – Los Angeles

East Bay Municipal – Oakland

Los Angeles Fire & Police – Los Angeles

Fresno County – Fresno

Orange County Treasurer – Santa Ana

Golden Gate Transit Amalgamated Ret Board – San Rafael


San Joaquin County – Stockton


San Mateo County Employees Retirement Association –
Redwood City

San Francisco City and County Employees' Retirement System –
San Francisco
Los Angeles Water & Power Employees Retirement Plan – Los
Angeles
Alameda-Contra Costa Transit District – Oakland

8
Stanislaus County Employees’ Retirement Association - Modesto
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Commitment to Servicing City of Fresno Retirement Systems
9
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
City of Fresno Retirement Systems - Client Servicing
CITY of FRESNO RETIREMENT SYSTEMS
Senior Management Oversight
Mike O’Grady
President, C&IS
Peter Cherewich
C&IS – Northern America
Jeffrey M. Porta
Division Manager
Relationship Management
Robert Ernst
Relationship Manager
Patrick Fitzgibbons
Account Manager
Rich McConville
Back-Up Relationship Manager
T. J. Parker
Back-Up Account Manager
Servicing Team
Mike Szydlowski
IRAS Consultant
Zach Davis
IRAS Analyst
Antwon McGruder
Commission Mgmt.
Neel Patel
Accounting Analyst
Fran Wawrzyniak
Treasury Management
Don Anderson
Securities Lending
Richard Clark
Investment Relationship
Manager
Joe Martinez
Transition Mgmt.
Core Custody Functions
10
Asset Pricing &
Coding
Trade & Cash Processing
Accounting & Regulatory
Reporting
Income
Processing
Corporate & Class
Actions
Proxy
Services
Transition
Management
Global Custody
Operations
Investment
Manager
Liaison
Performance, Risk &
Compliance
Tax
Reclamation
Business Continuity &
Disaster Recovery
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Our Relationship in Summary
Services Provided
Key Highlights

Transition
Management
Compliance
Analyst
Risk
Services
Performance
Reporting
Securities
Lending

Global
Custody
City of
Fresno
Relationship
with Northern
Trust
Fair
Valuation
Tools
11
Asset
Mgmt.
Passport
Cash
Sweep
Commission
Recapture
Controlled
Disbursement
Benefit
Payments
Brokerage




Central source of data repository for
the entire portfolio
Data repository has expanded
throughout tenure of the City of
Fresno's relationship with Northern
Trust
Adding Value Highlights


Open status for many emerging
markets
Unitized accounting for the two plans
Tenure allows assurance of Class
Action proceeds and eases historic
research of asset related activity
Striving enhance reporting by
supporting additional analytics for “risk”
governance.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015

Helping City of Fresno to manage
access to information: enhanced
reporting to provide more transparency
Client connections and data security:
added Passport® capabilities to securely
initiate transaction globally and to provide
cash movement alerts to stay connected
to your portfolio
Addressing regulatory and accounting
change: created reporting to assist you
with accounting standards – GASB 40,
53, 67 and Fair Value
Custodian Safekeeping, Securities Processing,
Cash Management and Accounting
12
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Overview of Custodial Responsibilities
Cash
Processing
Pricing
Trade
Processing
Income
Collection
Asset Coding
Data Repository
Transaction Processing
and Audit at Local
Operations level
Corporate
Actions
Transitions
Derivatives
•
•
•
•
•
•
Private
Equity
Security Level Audits
Controls and Procedures – Quality Assurance
Exception Based Audits and Analysis
Accounting Pronouncements – FASB/GASB
Regulatory Policy – DOL
Manager Reconciliation
Investment
Level
Reporting
Performance
Reporting
Northern Trust Passport®
13
Benefit
Payments
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Final Audit in Accounting
Plan Level
Reporting
Final Output / Report
Delivery
End-to-End Financial Accounting

Cash Forecasting
Holdings Reporting
Transaction Reporting
Expense Reporting
Price Reporting
Exposure Reporting
Audit Reporting
14






Projected Cash Detail and Balance Summary: Two reports out of a suite of reports that show
projected cash activity for current day as well as up to 90 days in the future. Reports are
updated throughout the day.
Asset Summary – Concise: At-a-glance version of holdings report, split out only by
asset classes
Income Received and Income Receivable: Subsets of the larger Income & Expense
Detail
Expense Detail with Vendor ID: Displays the vender description and tax code for
expenses paid
Price Detail Report: Shows the date, source and price type (i.e. bid/mid/offer) for each
security
Top 50 Equity Holdings and Top 50 Fixed Income Holdings: Two reports can consolidate
multiple managers to show total exposure in Equity or Fixed Income asset class.
Audit Indicator Report: Unaudited reporting is available prior to the completion of the monthly
audit. This report shows which accounts have been finalized.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
End-to-End Financial Accounting
 Class Actions Event Detail: Informs clients which specific investments make them eligible to file
Class Actions Reporting
a claim for the class action event. Report is not client specific.
 Class Action Filed Activity: Displays all historical investment activity that was sent to the claims
administrator for each client portfolio
Plan Allocation/Unitization Reporting
GASB Reporting
Private Equity/Ltd Partnerships
Gen Ledger/Trial Balance Reporting



15
 Comprehensive accounting at both the asset pool and participant scheme level detailing
income, fee and gain/loss treatments, rate of return calculations, asset allocation reporting
and ownership reporting
 A suite of reports available to assist clients with GASB 28, 40, 53 and 67 accounting and
reporting requirements. Reports show detailed and summary Sec Lending, Risk analysis,
Derivatives, MROR and Fair Value disclosures.
 A suite of reporting tools to assist clients: LP Adjusted Valuation, Exposure and Vintage year
Reporting. Analytical & tracking abilities.
 A suite of accounting based reports: Trial balance, detailed Income/expenses, holdings
detail & summary based on legal structure and risk.
All reports can be run daily or on a scheduled frequency (e.g. First Day of Month, 15 th Calendar Day, Last Day of Month, When Audited, etc.).
All reports can be formatted as a PDF, Excel or Tab Delimited.
All reports can be viewed via Passport® or delivered via email.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Performance Measurement and Future Technology
16
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Performance Product Spectrum
Northern Trust’s products are developed with user experience, coupled with
industry-best practices and knowledge
Measuring
Understanding
Monitoring
Planning
Risk and Return
Attribution Analysis
Compliance Monitoring
Policy Decisions
What Has Happened
Why It Happened
Daily performance

Total fund attribution

Historical analysis
 Volatility metrics

Equity, fixed, balanced and
global mandates




Risk adjusted return metrics
Performance Comparisons
Extensive benchmark
availability and customization
 Robust peer groups


3rd party peer groups
Alternative Asset Solutions
Comprehensive private
equity solutions
 Burgiss Group software solutions


3 types of benchmarking
Stock level detail
 Risk attribution

Style Analysis
Fundamental portfolio
characteristic analysis
 Returns based
style analysis
 Barra style factor
analysis
 Environmental analytics

Vintage Year Universes
Venture Economics
comparative data
On-line Access
Exportable
Ad-hoc Analysis
Customizable Reporting
Hardcopy Reporting
Consultative Approach
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Comprehensive tests available
Daily monitoring
 Exception based
e-mail notification
 Outsourced service
available
Event Monitoring
Exception based market
volatility monitoring
 Comprehensive
graphical reports

PE Transparency


17
the Current Portfolio
“Peek-through” to
underlying company
holdings for exposure
reporting
for the Future

Asset allocation modeling
Surplus-at-risk analysis
 Manager optimization

Implementation Decisions

Manager search assistance

Manager diversification
analysis
Market Risk Analysis

Value at risk


Risk budgeting
Predictive tracking error

Stress Testing
Liquidity Modeling

Capital Call Forecasting
2015 Capital Summary – Performance
Product and Capital requests can be broken down into four main categories:
Improved
Client
Experience
New Analytics
& Innovation







Core
Calculations





Efficiencies



18
IRAS Dashboards: New Types of Exhibits, Easy Set Up Features, Drill Through Templates
IRAS Content on the C&IS iPad: Investment Program Monitoring & Analytics Available Anywhere!
Integrated Reporting: Even More Customization Options, Commentary, External Exhibits
Scheduled Extract Product: Great for Delivery to Data Warehouses
IRAS Dashboard & iPad: Largest Holdings, Best/Worst Contributors and Performers, Regional/Sector Analysis, Policy
Level Attribution & Contribution, & Other New Templates
Integrated Reporting: Policy Level Attribution & Contribution, 3 New Asset Allocation Templates Market Index Page,
Risk Statistics, and Other New Templates
HFS Middle Office to IRAS Integration: Great for Asset Owners with Internal Asset Managers
PACE/Derivatives: Short Term Futures & Other Enhancements
Service Oriented Architecture: Consistent Calculations on All Platforms
Faster Attribution: Lower Processing Costs/Better User Experience
eVestment Universes: More Peer Group Comparisons
Productivity & Workflow Improvements: More Efficient Analysts/Faster Delivery
Performance Engine Screen Conversion to Net: Modern, Stable Platform
Benchmark Consolidation & Streamlining: Reduced Training and Development Costs
New Global Nightstreams: Supports Middle Eastern Clients and Australian Super Annuation Funds
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Northern Trust Passport®: Performance Delivery
Passport Dashboards
– Customizable
Performance
Dashboard
Integrated Reporting –
Monthly Reporting
Package
Fundamentals
– Online
Performance
Analysis Tool
19
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Sample of Existing Integrated Reporting Templates
24
Investment Risk & Analytical Services
20
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Dashboards & iPad
Target Market

Asset Owners & Asset Managers
Solution:

Dashboards and IRAS content on the C&IS iPad app (Q2) deliver
the information our clients want where they need it

Executive summaries and graphic analytics, as well as the ability to
provide data and detailed answers, provides the right level of
information to each client

Easy set up features include template libraries, fast response time
and ‘One Click’ answers

New analytics in Q2 include largest holdings, best/worst
contributors and performers, regional and sector analysis, as well
as policy level attribution and contribution

Enhanced information delivery and client experience are key
product themes within Performance and across IRAS
21
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Securities Lending
22
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Definition and Overview
Parties to a loan:



Lender (Client)
Borrower
Lending Agent (Northern Trust)
– The beneficial owner of the securities
– To whom the assets are being lent, usually a broker-dealer
– The party negotiating and facilitating the loan
Securities lending process:



A common market practice
whereby securities are
transferred on a temporary
basis from a lender to a
borrower with the latter
obliged to return the
securities either on demand
or at the end of a specified
period.

The market practice where securities are temporarily borrowed by the borrower from the lender, often
via an intermediary called a lending agent.
The borrower provides collateral with an agreed margin in exchange for the securities and pays a fee
for the transaction.
Where borrowers provide cash as collateral, the cash is invested according to agreed investment
guidelines and provides an additional opportunity for generating revenue. The borrower receives a
rebate from the lender which is offset against income earned from the cash reinvestment.
Loaned securities are marked-to-market daily by the lending agent. The borrower will provide further
collateral if prices increase.
Why lenders lend:




An investment tool to enhance portfolio returns
To offset custody or administrative fees
Does not interfere with portfolio strategy
It promotes market efficiency and liquidity
Why borrowers borrow:




23
Hedging
Short sell
Arbitrage strategies
Settlement obligations
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
The Life Cycle of a Loan
Securities Lending Authorization Agreement
Master Borrowing Agreement
1. Initiate Loan
Security
Availability
Client
(The beneficial
owner of
the securities)
Loan
Allocations
Northern
Trust
2. Negotiate Terms
3. Receive Collateral
4. Move Security
Non-Cash
Collateral
Cash
Collateral
5. Daily Mark to Market
6. Return Security
7. Return Collateral
24
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Borrower
(The entity to whom
the securities are
lent, typically a
broker/dealer)
Understanding the Components of Securities Lending Income
Yield on
Cash Collateral
Investment
Reinvestment Spread:
Basis points earned from
reinvestment of cash collateral
(Yield on Cash Collateral
Investment – Fed Funds Rate)
Federal Funds
(or benchmark) Rate
Intrinsic Value Spread:
Basis points earned
from lending security
to borrower, based on
intensity of borrower
demand
(Fed Funds Rate –
Rebate Rate)
Rebate Rate
(Positive, above 0%, is paid
to borrower. Negative, below
0%, is paid by borrower)
Reinvestment Spread + Intrinsic Value Spread = Total Securities Lending Spread
Total Securities Lending Spread x Loan Volume = Total Gross Securities Lending Income
25
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Total
Securities
Lending
Spread
How Revenue is Generated: Cash Collateral Loan
Example: Northern Trust lends $25 million of US Treasuries at par
The $25 million market value loan is for 30 days collateralized with cash (fed
funds at 0.15%)
26
1
Receive cash collateral valued at $25,500,000 (102%)
2
Cash collateral invested in a collateral pool at yield of 0.20%
$
3
Rebate paid to borrower at rate of 0.05%
$ (1,062.50)
4
Gross Revenue (gross spread 15 bps)
$
3,187.50
5
Monthly lender’s fee (@ 40%)
$
1,275.00
6
Net client earnings
$
1,912.50

Gross Spread = Lending Spread + Investment Spread

Lending Spread = Fed Funds – Rebate Rate

Investment Spread = Reinvestment Yield – Fed Funds
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
4,250.00
Program Philosophy & Overview
June 30, 2015
Emphasis on customization, automation and transparency
Philosophy




Lendable Base



Borrower Network




Global Team



Collateral Structure


27
Capital markets activity designed to enhance the return of an overall investment program
Extract intrinsic value from each loan
Customized participation and collateral selection to match individual risk tolerance
Does not interfere with investment strategy
$846 billion lendable securities for 378 clients
$116 billion loans outstanding
Diverse, global client base spanning 26 countries
57 approved parent borrowers
24-hour trading in 53 worldwide markets
Top 10 borrowers represent 77% of loan volume
Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Credit Suisse Group, The Royal
Bank of Scotland, Bank of America, Barclays PLC, UBS AG, Deutsche Bank AG
191 Securities Lending partners in Chicago, London, Toronto, Hong Kong and Bangalore
Managers average approximately 21 years industry experience
Experts are actively engaged in global industry groups (i.e. RMA, ISLA, PASLA and CASLA)
$122 billion in collateral ($69 billion cash, $53 billion non-cash). Approximately 55% of cash is held
in commingled pools, 45% is in separately managed accounts
Cash managed by Northern Trust Asset Management ($273.7 billion in total AUM for Short
Duration Fixed Income)
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Managing Risk
Risk
Definition
Mitigating Factors
Borrower Risk
Borrower default combined with
insufficient collateral
 Borrower default indemnification
 Rigorous credit committee review of borrowers
and exposure limits
 Daily marking of loans/collateral (initially
collateralized at 102% for same currency, 105% for
cross currency.)
 Risk analysis tools (MSCI Barra) to measure and
calibrate exposure
Risk Management
is instrumental to
our program
Trade Settlement
Risk
Investment manager sells loaned
security and borrower fails to
return in time to settle the trade
 Timely communication of trade
 Robust automated reallocations
 Trade settlement protection
Additional Risks with Taking Cash as Collateral
Cash Collateral
Reinvestment Risk
Cash collateral investment
becomes impaired or decreases in
value
 Client approved investment guidelines
 Robust independent oversight of cash investments
 Dedicated team of fixed income research analysts
 Daily automated monitoring of portfolio guidelines
and compliance
Interest Rate Risk
Loan rebate rate exceeds earnings
on cash collateral investments
 Close daily communication between lending and
cash management teams
 Shared risk between Northern Trust and client
 Weekly “gap analysis” and periodic stress testing
of portfolio
28
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Borrower Risk Management
Our borrower selection follows stringent approval procedures and financial viability standards
 Overall Credit Risk - Established framework to size borrower credit limits to

reduce concentration risk via three tests: Credit exposure relative to the borrower’s
capital, size of our exposure to the borrower relative to other market participants,
and size of our exposure to the borrower relative to Northern Trust’s total lending
program
Ratings The majority of our borrowers will have a long-term individual or parentlevel credit rating of A- or better and a short-term rating of A-1 or better from at
least one NRSRO.


Financial responsibility and compliance - Each borrower and
parent borrower must provide audited financial statements, be
financially sound and in compliance with regulatory capital
requirements
Parent Organization - We also focus on the condition and
creditworthiness of the borrower’s parent organization
We employ a dynamic, ongoing risk and exposure management process for our borrowers




29
Credit analysts review
market commentary and
data to analyse financial
stability

Daily
review
Quarterly
review

Provides oversight while
maintaining a responsive
capability to take actions as
needed
Monitors borrower
exposures derived from a
Value at Risk (VaR)
approach using each
borrower's loan and
collateral positions

Collateralized Product
Risk Committee
Supplements traditional
credit analysis by providing
insight into risk from
borrowers' Securities
Lending activity
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Annual
review

Securities Lending group presents on
each borrower to Counterparty Risk
Management Committee
Review financial performance of our 10
largest parent-level borrowers based on
their latest quarterly results, and all
borrowers capitalization, public rating of
the parent and compliance with our three
concentration tests
Present a comprehensive
analysis on borrowers and credit
limits to the Credit Policy
Wide-scale analysis includes
review of financial statements,
VaR, capital calculations, rating
agency analysis, and regulatory
compliance
General Recent Observations and Trends
 Market Drivers
 Signs of weakness in the Chinese economy along with the deepening
fiscal crisis in Greece weighed on markets during the second quarter.
Ongoing improvements in the U.S. and U.K. were positive offsets.
 As financial regulation continues to take shape, demand from borrowers to
pledge more and varied non-cash collateral types has been on the rise as
dealer balance sheets contract.
 Speculation on the timing of Federal Reserve interest rate increases also
contributed to market volatility.
 Market volatility, as measured by the CBOE Volatility Index (VIX), rose
21% during the quarter.
 Demand from the Borrower Community
Equity Markets


30
o
Loan volumes softened somewhat towards the end of the quarter as
short covering was on the rise accompanied by a contraction in
lending fees.
o
The energy exploration and production sectors continue to
experience strong demand.
o
The yield enhancement season in Europe reached it’s peak in May,
resulting in higher levels of borrower demand for shares of dividend
paying stocks.
Fixed Income Markets
o
Changes in the regulatory environment negatively impacted
demand for US Treasury and Agency collateral, especially versus
cash collateral, resulting in lower overall lending spreads.
o
Demand to borrow on a term basis versus noncash collateral,
including equities, is on the rise.
o
Demand for corporate and emerging markets bonds was impacted
by the same global macro factors as equities.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Collateral Reinvestment: Current Observations & Trends



31
Economics continue to drive divergent Central Bank activity:

The European Central Bank (ECB) continues to promote an accommodative monetary policy intended to fight deflationary pressures
and slowing growth. They are maintaining their deposit rate of -20 basis points; have embarked on an asset purchase program to
include government debt and private debt; and extended their long-term, low-rate debt offer to banks. Local yields in Europe are
declining but USD investments in European credit products have remained substantively unchanged.

The US Federal Reserve (Fed) continues to prepare the market for a less accommodative policy in response to an ever declining
unemployment rate and continued growth in US Gross Domestic Product (“GDP”). Market expectations are for a rate increase in late
2015. USD yields should increase as the investor moves farther out along the yield curve.

The Bank of England (BOE) continues to monitor their strengthening economy and quicker-than-expected reduction in unemployment,
but low inflation prints will likely delay their first rate hike to 2016. Local yields should increase as the investor moves farther out along
the yield curve.

Events in Greece are causing both the Fed and the BOE to take note of increasing uncertainty in the global economic landscape, and
is providing extra incentive for the ECB to continue it’s accommodative stance.
Supply dynamics in the short-term markets continue to exert downward pressure on yields:

Regulations being placed on financial institutions reduce the supply of short term investments, which put downward pressure on yields.

In the U.S., the prospects for higher rates have not made their way to the short-term markets. The technical factors of supply and
demand are outweighing the economics pointing to higher rates.
Current portfolio positioning:

Neutral portfolio duration to minimize the impact of future rising rates.

Strong overnight liquidity positions focused on repurchase agreements and time deposits of well-capitalized financial institutions.

Longer-dated trades of floating-rate instruments are preferred over fixed-rate offerings.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Brief Overview of Key Regulatory Developments
Northern Trust is tracking global regulatory developments that may impact securities lending and is actively engaged with various federal agencies on these
regulations either directly or through industry groups.
Regulatory Development
Anticipated Impacts
Status
Dodd-Frank
Volcker Rule - 619
•
Final Rules issued December 2013;
Conformance deadline July 2016
(extended from July 2015)
Awaiting final rules.
Counterparty Concentration Limits – 165(e)
•
•
Securities Lending Transparency – 984
•
•
Money Market Reform
•
•
Financial Transaction Tax Directive (FTT):
Proposed EU Directive
•
•
Financial Stability Board (FSB):
Work stream on Securities Lending and
Repos under the FSB Shadow Banking
Task Force
•
•
•
Total Loss Absorbing Capacity (TLAC)
32
•
The final regulation does not exclude securities lending cash collateral pools from the scope
of the Volcker Rule and therefore may curtail agent lenders’ sponsorship of unregistered
cash collateral pools.
Limits a bank’s combined credit exposure to a single counterparty to no more than 25% of
the bank’s capital.
Credit exposure calculations include indemnified securities lending transactions; agent
lenders may face constraints on providing indemnification and accepting sovereign debt as
collateral.
Requires SEC to increase transparency in securities lending.
Awaiting proposed rules (overdue
since mid-2012); no clear timeframe
Expectation is that SEC will develop regulations that align with proposals from the Financial
for rules to be issued
Stability Board’s Work stream on Securities Lending and Repo.
SEC adopted rules for “prime” money market funds (including registered 2a-7 funds) that
involve requirements such as variable NAV. Additional restrictions, such as redemption
gates and liquidity fees will be at the discretion of the fund board.
Funds having over 99.5% invested in government securities are exempt from these new
requirements.
Final rules approved July 23, 2014,
October 2016 compliance.
Sets out the framework for a harmonized FTT across 11 participating EU member states.
Key EU meetings in October 2014 did
Client purchases, sales and exchanges of financial instruments, the conclusion of derivative not result in expected progress.
contracts, repos, and securities lending transactions are all in scope of the draft document, Implementation now aimed at 2016 /
2017 but significant technical
which is far from final.
challenges remain
Examines securities lending and repurchase agreements.
Guidelines for minimum margins and
Published policy recommendations on transparency, disclosure, minimum standards on cash haircuts published October 2014.
reinvestment and collateral valuation, and requirements on collateral rehypothecation. FSB
Data Experts Group proposed standardized data reporting elements for securities lending
Awaiting adoption of FSB framework
and repo transactions.
by local regulators.
Published standards for evaluating margin sufficiency on transactions that are not centrally Northern Trust and other agent
cleared, which may result in higher requirements. Recommended haircut floors for certain
lenders are participating in a voluntary
transactions; excluding agency securities lending transactions assuming cash is invested
Fed/OFR pilot study on data collection
consistently with earlier FSB standards and non cash collateral is not re-used.
GSIBs to be subject to even higher capital requirements; defines instruments eligible to
Proposal published in November
satisfy TLAC requirements.
2014, awaiting final standards.
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Investment Profile: Core USA Cash Collateral Fund
June 30, 2015
Core USA 6/30/15
Average Yield
Market to Book
Avg Loan Duration
0.30%
0.99999
58 Days
* Based upon traded basis from holdings reports
NOTE: This information was created using the best unaudited data available to us and may not be completely reliable, accurate, or timely. Data is prepared on a
settled basis, which may differ from traded basis data on the Cash Collateral Holdings report. “Traded Basis” reflects pending trades.
33
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Fresno
Historical Net Earnings Fiscal Years Ended June 30
CITY OF FRESNO
$2,500,000
$2,154,273
Int'l Equity
$2,000,000
Int'l Fixed
US Equities
$1,723,512
US Corp Bds
$1,500,000
$1,153,376
$1,000,000
$1,237,025
$1,105,631
$1,025,408
$1,105,208
$848,762
$823,419
$500,000
$0
2007 2008
34
2009 2010
2011 2012 2013
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
2014 2015
US Agencies
US Treasuries
Earnings Scorecard Year Ended 06/30/15
35
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Earnings Performance Comparison
Year Ended 06/30/15 versus Year Ended 06/30/14
36
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Performance Scorecard: Top Ten Earning Securities
37
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Transparency and Information Delivery
Flexible, electronic reporting: Northern Trust provides you with customized reports to help monitor
your Securities Lending activity
Daily reporting
Monthly reporting

Performance scorecard:

Securities loaned – detail

Borrower utilization – summary by borrower

Account earnings and performance
Account utilization – loan detail, summary by
account

Security level detail

Client by asset type and account earnings

Date range comparison



Collateral – by security type, country and detail
holdings
Executive Summary

Historical statistics graph

Earnings statement - summary and detail
Securities Lending
Data Block on
Passport®
Helping to keep you
informed about your
Securities Lending
performance.
Facilitates the online
distribution of vital,
tailored information on
each client’s portfolio
holdings, characteristics,
investment performance
and commentary
38
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Why Northern Trust
Northern Trust provides managed risk and proven performance supported by committed professionals.



Fully committed to
Securities Lending
Stable and experienced team
dedicated to
Securities Lending
Close coordination between
custody and asset management







A Core
Business
Trade settlement
Income
Corporate Actions
Unrivaled
Client
Focus
Dedicated relationship staff
demonstrating corporate
culture of exceptional client
service
Anticipate client needs and
proactively customize
solutions
Northern Trust
Global
Securities
Lending






Relationship focused, not
transaction oriented

Named Securities Lender
of the Year – Custody Risk

34-year track record of innovative solutions
supported by robust risk management
Focused on optimizing the intrinsic value of client
assets
Consistently exceeds industry benchmarks
#1 in trade value for Fixed Income and Equities for
Autoborrow
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Sustained financial strength
and stability
Important to work with a
stable and disciplined agent
Indemnification only as
strong as provider
Unique
Global
Integration
Proven
Performance
Results

39
Exceptional
Capital
Strength

Market expertise provided
by a single global team of
professionals
Technology efficiency
achieved through a single,
global proprietary trading
platform
Competitive advantage
gained via distinctive global
infrastructure
Commission Recapture
40
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Commission Management Review – Year ending June 30 2015
July 1, 2014 through June 30, 2015
Program Commission
$ 568,903.39
Rebate basis
$ 28,193.40
Rebate
$ 21,501.82
Rebate %
80 – Domestic
70 – International
% CM trades of total
8.83 %
Effective commission rate
41
Before rebate
1.23 cps (cents per share)
After rebate
1.18 cps
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Effective Commission Rates –Year Ended 06/30/15
42
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Commission Management Summary
 Current Environment
 Commissions have been falling for the last few years
 Providers excluding trades having commissions under a specified level, usually 3cps
 Many CM providers and participating brokers left the space
 Program economics tough in the lower commission environment
 Northern’s Commission Management, a smarter approach
 Northern Trust Securities restructured its Commission Management program
 Economics work for all parties
 All trades are eligible
 Rebate basis is 80% commission in excess of the executing brokers cost of trade processing
 Economics work for City of Fresno Retirement Systems
 Recaptured amount lowers effective commission
 Benefit to plan until there is no rebate available
 No rebate available means plan is trading at broker’s cost.
43
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
NORTHERN TRUST
Corporate Biographies
northerntrust.com
Biography
Robert Ernst
Senior Vice President
Corporate & Institutional Services
Relationship Manager
Northern Trust - Chicago
Professional Experience
Bob has been in the Public Fund/Government Entities Segment since September 2004. Prior to
this, he had spent six years in Northern Trust's London Branch where he served as relationship
manager servicing international custody clients with ultimate responsibility for their satisfaction.
On an ongoing basis, he serves as the client's strategist and facilitator by managing Northern
Trust's commitment to the client; addressing client issues to ensure appropriate resources are
dedicated to the relationships; and establishing a solid business relationship.
Bob previously worked as an Information Consultant in Corporate and Institutional Services. He
and his team were responsible for solving a broad range of complex issues for prospective and
existing clients. A cohesive set of experts with in-depth experience in transitions, daily valuation
and technology, the consulting group adds a new dimension to relationship service.
Prior to joining the Information Consulting group in 1994, Bob spent six years with the
Correspondent Trust Services group as the product manager and technical resource for a full
function trust accounting system offered to community trust departments.
Before joining the Information Consulting group, Bob spent his first eight years with Northern Trust
in various supervisory and management roles within Worldwide Operations.
Year Started at Northern Trust
1980
Year Started in Industry
1979
Credentials and Affiliations

45
B.A. degree in Economics from Denison University in Granville, Ohio
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Biography
Don Anderson
Senior Vice President
Corporate & Institutional Services
Senior Relationship Manager
Northern Trust - Chicago
Professional Experience
Don Anderson is a Senior Vice President at The Northern Trust Company, Chicago. Don is a
Relationship Manager for Northern Trust Global Securities Lending, specializing in the Public Funds
and Taft Hartley segments. He is responsible for ensuring that securities lending clients receive
quality and coordinated services from our operations, trading and investment areas. Don also leads
sales and marketing efforts within the same segments.
Prior to joining the Securities Lending team, Don spent two years as a Senior Investment Consultant
and six years as a Division Manager within Northern Trust's Investment Risk & Analytical Services
Group.
Before joining Northern Trust, Don spent ten years with other custodial organizations, primarily in the
field of investment performance and analytics
Year Started at Northern Trust
1997
Year Started in Industry
1985
Credentials and Affiliations


46
B.A. degree in economics from the University of Illinois
M.B.A. from Northern Illinois University
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
Important Information
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S.
The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust Global Investments Limited (reg. no. 03929218) and Northern Trust Global
Services Limited (reg. no. 04795756) are authorised and regulated by the Financial Services Authority.
The material within and any linked material accessed via this communication is directed to eligible counterparties and professional clients only and should not be
distributed to or relied upon by retail investors. For Asia Pacific markets, it is directed to institutional investors, expert investors and professional investors only and
should not be relied upon by retail investors.
Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services
(Guernsey) Limited are licensed by the Guernsey Financial Services Commission. Northern Trust International Fund Administrators (Jersey) Limited and Northern
Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. Northern Trust International Fund Administration Services
(Ireland) Limited, Northern Trust Securities Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of
Ireland. Northern Trust Global Services Limited has a Luxembourg Branch, which is authorised and regulated by the Commission de Surveillance du Secteur
Financier (CSSF). Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF).
Northern Trust Global Investments Limited has a Netherlands branch, which is authorised by the Financial Services Authority and subject to regulation in the
Netherlands by the AutoriteitFinanciëleMarkten. Northern Trust Global Services Limited has a Netherlands Branch, which is authorised and regulated in the
Netherlands by De Nederlandsche Bank. Northern Trust Global Investments Limited has a Sweden branch, which is authorised by the Financial Services Authority
and subject to regulation in Sweden by the Finansinspektionen. Northern Trust Global Services Ltd (UK) Sweden Filial is authorised by the Financial Services
Authority and subject to regulation by the Finansinspektionen. Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office. Our
registered office is authorised and regulated by the Central Bank of the United Arab Emirates. The Northern Trust Company operates in Australia as a foreign
authorised deposit-taking institution (foreign ADI)and is regulated by the Australian Prudential Regulation Authority. The Northern Trust Company has a branch in
China regulated by the China Banking Regulatory Commission. The Northern Trust Company of Hong Kong Limited is a securities dealing company regulated by
the Securities and Futures Commission. Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency. The Northern Trust
Company has a Singapore Branch, which is a foreign wholesale bank regulated by the Monetary Authority of Singapore. The Northern Trust Company operates in
Canada as The Northern Trust Company, Canada Branch, which is an authorised foreign bank branch under the Bank Act (Canada). Trustee related services in
Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorised trust company under the Trust & Loans Companies Act
(Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation.
January2015
47
A Presentation to City of Fresno Retirement Systems – August 24th, 2015
NORTHERN TRUST SECURITIES LENDING
BORROWER LIST
JUNE 2015
Current Borrowers
Borrower Name
ABN AMRO BANK N.V.
ABN AMRO SECURITIES (USA) LLC
BANK OF AMERICA CORPORATION
MERRILL LYNCH CANADA INC.
MERRILL LYNCH INTERNATIONAL
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BANK OF MONTREAL
BANK OF MONTREAL, CHICAGO BRANCH
BMO CAPITAL MARKETS CORP.
BMO NESBITT BURNS INC.
BARCLAYS BANK PLC
BARCLAYS CAPITAL INC.
BARCLAYS CAPITAL SECURITIES LTD.
BARCLAYS PLC
BNP PARIBAS
BNP PARIBAS ARBITRAGE
BNP PARIBAS PARIS
BNP PARIBAS PRIME BROKERAGE INTERNATIONAL LTD., DUBLIN
BNP PARIBAS PRIME BROKERAGE, INC.
BNP PARIBAS SECURITIES CORPORATION
BNP PARIBAS, LONDON BRANCH
BNP PARIBAS, NEW YORK BRANCH
CANADIAN IMPERIAL BANK OF COMMERCE
CIBC LONDON BRANCH
CIBC WORLD MARKETS INC.
CANTOR FITZGERALD & CO.
CANTOR FITZGERALD L.P.
CITADEL CLEARING LLC
CITADEL SECURITIES LLC
CITADEL SECURITIES LLC 8430
CITIGROUP GLOBAL MARKETS INC.
CITIGROUP GLOBAL MARKETS LIMITED
CITIGROUP INC.
COMMERZ MARKETS LLC
COMMERZBANK AG
COMMERZBANK AG FRANKFURT BRANCH- AUKI
COWEN EQUITY FINANCE L.P.
COWEN GROUP INC.
CREDIT AGRICOLE S.A.
CREDIT AGRICOLE SECURITIES USA, INC.
CREDIT SUISSE AG, DUBLIN BRANCH
CREDIT SUISSE GROUP AG
CREDIT SUISSE SECURITIES (EUROPE) LIMITED
CREDIT SUISSE SECURITIES (USA) LLC
DANSKE BANK A/S
DBS BANK LTD
DEUTSCHE BANK AG
DEUTSCHE BANK AG, FRANKFURT BRANCH
DEUTSCHE BANK AG, LONDON BRANCH
DEUTSCHE BANK SECURITIES INC.
FIDELITY CLEARING CANADA ULC
FMR LLC
NATIONAL FINANCIAL SERVICES LLC
GROUPE BPCE
NATIXIS S.A.
HEALTHCARE OF ONTARIO
HSBC BANK PLC
HSBC HOLDINGS PLC
HSBC SECURITIES (USA) INC.
IBG LLC
TIMBER HILL LLC
ICBC FINANCIAL SERVICES LLC
NTAC:2SE-18
Parent Borrower
ABN AMRO BANK N.V.
ABN AMRO BANK N.V.
BANK OF AMERICA CORPORATION
BANK OF AMERICA CORPORATION
BANK OF AMERICA CORPORATION
BANK OF AMERICA CORPORATION
BANK OF MONTREAL
BANK OF MONTREAL
BANK OF MONTREAL
BANK OF MONTREAL
BARCLAYS BANK PLC
BARCLAYS BANK PLC
BARCLAYS BANK PLC
BARCLAYS BANK PLC
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
BNP PARIBAS
CANADIAN IMPERIAL BANK OF COMMERCE
CANADIAN IMPERIAL BANK OF COMMERCE
CANADIAN IMPERIAL BANK OF COMMERCE
CANTOR FITZGERALD L.P.
CANTOR FITZGERALD L.P.
CITADEL SECURITIES LLC
CITADEL SECURITIES LLC
CITADEL SECURITIES LLC
CITIGROUP INC.
CITIGROUP INC.
CITIGROUP INC.
COMMERZBANK AG
COMMERZBANK AG
COMMERZBANK AG
COWEN GROUP INC.
COWEN GROUP INC.
CREDIT AGRICOLE S.A.
CREDIT AGRICOLE S.A.
CREDIT SUISSE GROUP AG
CREDIT SUISSE GROUP AG
CREDIT SUISSE GROUP AG
CREDIT SUISSE GROUP AG
DANSKE BANK A/S
DBS BANK LTD
DEUTSCHE BANK AG
DEUTSCHE BANK AG
DEUTSCHE BANK AG
DEUTSCHE BANK AG
FMR LLC
FMR LLC
FMR LLC
GROUPE BPCE
GROUPE BPCE
HEALTHCARE OF ONTARIO
HSBC HOLDINGS PLC
HSBC HOLDINGS PLC
HSBC HOLDINGS PLC
IBG LLC
IBG LLC
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LTD
Country name
Netherlands
United States
United States
Canada
United Kingdom
United States
Canada
United States
United States
Canada
United Kingdom
United States
United Kingdom
United Kingdom
France
France
France
Ireland
United States
United States
United Kingdom
United States
Canada
United Kingdom
Canada
United States
United States
United States
United States
United States
United States
United Kingdom
United States
United States
Germany
United Kingdom
United States
United States
France
United States
Ireland
Switzerland
United Kingdom
United States
Denmark
Singapore
Germany
Germany
United Kingdom
United States
United States
United States
United States
France
France
Canada
United Kingdom
United Kingdom
United States
United States
United States
United States
S and P S and P Moody's Moody's
ST
LT
ST
LT
A1
A
P1
A2
A1
A
P1
A2
A2
AP2
Baa1
A2
AP2
Baa1
A1
A
P2
Baa1
A1
A
P2
Baa1
A1
A+
P1
Aa3
A1
A+
P1
Aa3
A1
A+
P1
Aa3
A1
A+
P1
Aa3
A2
AP1
A2
A2
AP1
A2
A2
AP1
A2
A2
BBB
P3
Baa3
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
Aa3
A1
A+
P1
Aa3
A1
A+
P1
Aa3
NR
BBBNR
NR
NR
BBBNR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
A1
A
NR
Baa1
A1
A
P2
Baa1
A2
AP2
Baa1
A2
BBB+
P2
Baa1
A2
BBB+
P2
Baa1
A2
BBB+
P2
Baa1
NR
NR
NR
NR
NR
NR
NR
NR
A1
A
P1
A2
A1
A
P1
A2
NR
BBB+
NR
Baa2
NR
BBB+
NR
Baa2
A1
A
NR
Baa2
A1
A
NR
Baa2
A1
A
P1
A2
A1+
AAP1
Aa1
A2
BBB+
P2
A3
A2
BBB+
P2
A3
A2
BBB+
P2
A3
A2
BBB+
P2
A3
A1
A+
NR
A2
A1
A+
NR
A2
A1
A+
NR
A2
A1
A
P1
A2
A1
A
P1
A2
NR
NR
NR
NR
A1+
AAP1
Aa2
A1
A
P1
A1
A1+
AAP1
A1
NR
BBB
NR
NR
NR
BBB
NR
NR
A1
A
P1
A1
Borrower Name
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LTD
ING BANK N.V.
ING BANK N.V. AMSTERDAM BRANCH
ING BANK NV, LONDON BRANCH
ING FINANCIAL MARKETS LLC
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE BANK NA
J.P. MORGAN CHASE BANK NA, LONDON BRANCH
J.P. MORGAN CLEARING CORP.
J.P. MORGAN MARKETS LIMITED
J.P. MORGAN SECURITIES LLC
J.P. MORGAN SECURITIES PLC
KNIGHT CAPITAL GROUP
KNIGHT EXECUTION AND CLEARING SERVICES LLC
JEFFERIES INTERNATIONAL LIMITED
JEFFERIES LLC
LEUCADIA NATIONAL CORPORATION
GUGGENHEIM SECURITIES LLC
LINKS HOLDINGS LLC
LLOYDS BANK PLC
LLOYDS BANKING GROUP PLC
MACQUARIE BANK LIMITED
MACQUARIE BANK LIMITED, LONDON BRANCH
MACQUARIE GROUP LIMITED
MAPLE BANK GMBH
MAPLE BANK GMBH, TORONTO BRANCH
MAPLE FINANCIAL GROUP
MAPLE SECURITIES (UK) LIMITED
MAPLE SECURITIES USA INC.
MITSUBISHI UFJ FINANCIAL GROUP INC.
MITSUBISHI UFJ SECURITIES (USA) INC.
MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC
MIZUHO CORPORATE BANK LIMITED
MIZUHO SECURITIES USA INC.
MORGAN STANLEY
MORGAN STANLEY & CO. INTERNATIONAL PLC
MORGAN STANLEY AND CO. LLC.
MORGAN STANLEY CANADA LIMITED
MORGAN STANLEY MUFG SECURITIES CO. LTD
NATIONAL AUSTRALIA BANK LTD.
NATIONAL BANK FINANCIAL INC.
NATIONAL BANK OF CANADA
NATIONAL BANK OF CANADA FINANCIAL INC.
NOMURA HOLDINGS INC.
NOMURA INTERNATIONAL PLC
NOMURA SECURITIES INTERNATIONAL INC.
NORDEA BANK AB
NORDEA BANK NORGE ASA
OFFICE OF THE STATE TREASURER OF THE STATE OF GEORGIA
RABOBANK NEDERLAND
RBC CAPITAL MARKETS, LLC
RBC DOMINION SECURITIES INC.
RBC EUROPE LIMITED
ROYAL BANK OF CANADA
ROYAL BANK OF CANADA, LONDON BRANCH
ABBEY NATIONAL TREASURY SERVICES PLC
ABBEY NATIONALTREASURY SERVICES PLC (US BRANCH)
SANTANDER UK PLC
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), NEW YORK BRANCH
SG AMERICAS SECURITIES LLC
SOCIETE GENERALE
SOCIETE GENERALE, NEW YORK BRANCH
SOCIETE GENERALE, PARIS BRANCH
STANDARD CHARTERED BANK
STANDARD CHARTERED PLC
STATE STREET BANK & TRUST COMPANY, CANADA BRANCH
STATE STREET BANK AND TRUST COMPANY
STATE STREET CORPORATION
SVENSKA HANDELSBANKEN AB (PUBL)
NTAC:2SE-18
Parent Borrower
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LTD
ING BANK N.V.
ING BANK N.V.
ING BANK N.V.
ING BANK N.V.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
J.P. MORGAN CHASE & CO.
KNIGHT CAPITAL GROUP
KNIGHT CAPITAL GROUP
LEUCADIA NATIONAL CORPORATION
LEUCADIA NATIONAL CORPORATION
LEUCADIA NATIONAL CORPORATION
LINKS HOLDINGS LLC
LINKS HOLDINGS LLC
LLOYDS BANKING GROUP PLC
LLOYDS BANKING GROUP PLC
MACQUARIE GROUP LIMITED
MACQUARIE GROUP LIMITED
MACQUARIE GROUP LIMITED
MAPLE FINANCIAL GROUP
MAPLE FINANCIAL GROUP
MAPLE FINANCIAL GROUP
MAPLE FINANCIAL GROUP
MAPLE FINANCIAL GROUP
MITSUBISHI UFJ FINANCIAL GROUP INC.
MITSUBISHI UFJ FINANCIAL GROUP INC.
MITSUBISHI UFJ FINANCIAL GROUP INC.
MIZUHO CORPORATE BANK LIMITED
MIZUHO CORPORATE BANK LIMITED
MORGAN STANLEY
MORGAN STANLEY
MORGAN STANLEY
MORGAN STANLEY
MORGAN STANLEY
NATIONAL AUSTRALIA BANK LTD.
NATIONAL BANK OF CANADA
NATIONAL BANK OF CANADA
NATIONAL BANK OF CANADA
NOMURA HOLDINGS INC.
NOMURA HOLDINGS INC.
NOMURA HOLDINGS INC.
NORDEA BANK AB
NORDEA BANK AB
OFFICE OF THE STATE TREASURER OF THE STATE OF GEORGIA
RABOBANK NEDERLAND
ROYAL BANK OF CANADA
ROYAL BANK OF CANADA
ROYAL BANK OF CANADA
ROYAL BANK OF CANADA
ROYAL BANK OF CANADA
SANTANDER UK PLC
SANTANDER UK PLC
SANTANDER UK PLC
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
SOCIETE GENERALE
SOCIETE GENERALE
SOCIETE GENERALE
SOCIETE GENERALE
STANDARD CHARTERED PLC
STANDARD CHARTERED PLC
STATE STREET CORPORATION
STATE STREET CORPORATION
STATE STREET CORPORATION
SVENSKA HANDELSBANKEN AB (PUBL)
Country name
China
Netherlands
Netherlands
United Kingdom
United States
United States
United States
United Kingdom
United States
United Kingdom
United States
United Kingdom
United States
United States
United Kingdom
United States
United States
United States
United States
United Kingdom
United Kingdom
Australia
United Kingdom
Australia
Germany
Canada
Canada
United Kingdom
United States
Japan
United States
United Kingdom
Japan
United States
United States
United Kingdom
United States
Canada
Japan
Australia
Canada
Canada
United States
Japan
United Kingdom
United States
Sweden
Norway
United States
Netherlands
United States
Canada
United Kingdom
Canada
United Kingdom
United Kingdom
United States
United Kingdom
Sweden
United States
United States
France
United States
France
United Kingdom
United Kingdom
Canada
United States
United States
Sweden
S and P S and P Moody's Moody's
ST
LT
ST
LT
A1
A
P1
A1
A1
A
P1
A1
A1
A
P1
A1
A1
A
P1
A1
A1
A
P1
A1
A1
A
P2
A3
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa3
A1
A
P2
A3
A1
A+
P1
Aa3
A1
A+
P1
Aa2
NR
NR
NR
NR
NR
NR
NR
NR
NR
BBBNR
Ba1
NR
BBBNR
Ba1
NR
BBBNR
Ba1
NR
NR
NP
NR
NR
NR
NR
NR
A1
A
P1
A1
A2
BBB+
P2
Baa1
A1
A
P1
A2
A1
A
P1
A2
A2
BBB
P2
A3
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
A
P1
A2
NR
A
P1
A2
NR
A
P1
A2
A1
A+
P1
A1
A1
A+
P1
A2
A2
AP2
A3
A1
A
P1
A1
A1
A
P2
A3
A2
AP2
A3
A1
A
P2
NR
A1+
AAP1
Aa2
A1
A
P1
Aa3
A1
A
P1
Aa3
A1
A
P1
Aa3
A2
BBB+
NR
Baa1
A2
BBB+
P2
NR
A2
BBB+
NR
Baa1
A1+
AAP1
Aa3
A1+
AAP1
Aa3
NR
AAA
NR
Aaa
A1
A+
P1
Aa2
A1+
AAP1
A2
A1+
AAP1
Aa3
A1+
AAP1
Aa3
A1+
AAP1
Aa3
A1+
AAP1
Aa3
A1
A
P1
A1
A1
A
P1
A1
A1
A
P1
A1
A1
A+
P1
Aa3
A1
A+
P1
Aa3
A1
A
P2
Baa2
A1
A
P1
A2
A1
A
P1
A2
A1
A
P1
A2
A1
A+
P1
Aa2
A2
ANR
Aa3
A1+
AAP1
Aa2
A1+
AAP1
Aa2
A1
A+
P1
A2
A1+
AAP1
Aa2
Borrower Name
SWEDBANK AB
TD AMERITRADE CLEARING INC.
TD AMERITRADE HOLDING CORPORATION
PERSHING LLC
THE BANK OF NEW YORK MELLON CORPORATION
SCOTIA CAPITAL (EUROPE) LIMITED
SCOTIA CAPITAL (USA) INC.
SCOTIA CAPITAL INC.
SCOTIABANK EUROPE PLC
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA, LONDON BRANCH
THE BANK OF NOVA SCOTIA, NEW YORK BRANCH
THE BANK OF NOVA SCOTIA, TORONTO BRANCH
GOLDMAN SACHS CANADA INC.
GOLDMAN SACHS INTERNATIONAL
GOLDMAN, SACHS & CO.
THE GOLDMAN SACHS GROUP INC.
RBS SECURITIES INC.
THE ROYAL BANK OF SCOTLAND GROUP PLC
THE ROYAL BANK OF SCOTLAND PLC
TD SECURITIES (USA) LLC
TD SECURITIES INC.
THE TORONTO-DOMINION BANK
U.S. BANCORP
US BANCORP INVESTMENTS INC
UBS AG
UBS AG, LONDON BRANCH
UBS LIMITED
UBS SECURITIES LLC
FIRST CLEARING LLC
WELLS FARGO & CO.
WELLS FARGO BANK N.A.
WELLS FARGO SECURITIES, LLC
Parent Borrower
SWEDBANK AB
TD AMERITRADE HOLDING CORPORATION
TD AMERITRADE HOLDING CORPORATION
THE BANK OF NEW YORK MELLON CORPORATION
THE BANK OF NEW YORK MELLON CORPORATION
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE BANK OF NOVA SCOTIA
THE GOLDMAN SACHS GROUP INC.
THE GOLDMAN SACHS GROUP INC.
THE GOLDMAN SACHS GROUP INC.
THE GOLDMAN SACHS GROUP INC.
THE ROYAL BANK OF SCOTLAND GROUP PLC
THE ROYAL BANK OF SCOTLAND GROUP PLC
THE ROYAL BANK OF SCOTLAND GROUP PLC
THE TORONTO-DOMINION BANK
THE TORONTO-DOMINION BANK
THE TORONTO-DOMINION BANK
U.S. BANCORP
U.S. BANCORP
UBS AG
UBS AG
UBS AG
UBS AG
WELLS FARGO & CO.
WELLS FARGO & CO.
WELLS FARGO & CO.
WELLS FARGO & CO.
Country name
Sweden
United States
United States
United States
United States
United Kingdom
United States
Canada
United Kingdom
Canada
United Kingdom
United States
Canada
Canada
United Kingdom
United States
United States
United States
United Kingdom
United Kingdom
United States
Canada
Canada
United States
United States
Switzerland
United Kingdom
United Kingdom
United States
United States
United States
United States
United States
S and P S and P Moody's Moody's
ST
LT
ST
LT
A1
A+
P1
Aa3
NR
A
NR
A3
NR
A
NR
A3
A1
A+
P1
A1
A1
A+
P1
A1
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A1
A+
P1
Aa2
A2
AP2
A3
A1
A
P1
A1
A1
A
P2
A3
A2
AP2
A3
A2
BBB+
NP
Ba1
A3
BBBNP
Ba1
A2
BBB+
P2
A3
A1+
AAP1
Aa1
A1+
AAP1
Aa1
A1+
AAP1
Aa1
A1
A+
P1
A1
A1
A+
P1
A1
A1
A
P1
A1
A1
A
P1
A1
A1
A
P1
A2
A1
A
P1
A1
A1
A+
P1
A2
A1
A+
P1
A2
A1+
AAP1
Aa1
A1+
AAP1
A2
Although this report has been prepared using information believed to be reliable, it may contain information provided by third parties or derived from third party information, and/or
information that may have been obtained from, categorized or otherwise reported based upon client direction. The Northern Trust Company does not guarantee the accuracy,
timeliness or completeness of any such information. The information included in this report is intended to assist clients with their financial reporting needs, but you must consult with
your accountants, auditors and/or legal counsel to ensure your accounting and financial reporting complies with applicable laws, regulations and accounting guidance. The Northern
Trust Company and its affiliates shall have no responsibility for the consequences of investment decisions made in reliance on information contained in this report.
NTAC:2SE-18