<table><tr><th>From:</th><th>labor Y. &lt;</th></tr><tr><td>Sent:</td><td>Thursday, November 5, 2015 4:26 PM</td></tr><tr><td>To:</td><td>Jeffrey Epstein</td></tr><tr><td>Subject:</td><td>Re: Fwd: Saudi rates and CDS</td></tr></table>

Interesting information Thanks

On 5 Nov 2015 10:51 am, "jeffrey E." &t;jeevacation@gmail.com <mailto:jeevacation@gmail.com> > w=ote:

S&P cut Saudi Arab=a from A+ to AA- earlier this week as they expect the fiscal deficit will =ncrease to 16% of GDP in 2015, from 1.5% in 2014, primarily reflecting the=sharp drop in oil prices As a follow-up to the below, it is also interesting to look at playi=g the idea through FX.

</=pan>

USD/SAR is currently p=gged. While our base case is that the government will defend the peg, if h=adlines get worse, revenues collapse from depressed oil prices and the gov=rnment has to address fiscal spending, we believe forward points and volatility will continue to increase. Althou=h, it may be a low probability event that the government breaks the peg, i= we look at Kazakhstan's actions in August (see chart below), we s=e buying USD call/ SAR put options as an interesting risk reward.

</=pan>

USD/KZT 1yr<=>

Source: Bloomberg 11/0=/2015

Chart 2 below shows Saudi CDS

Syr Saudi CDS