<table><tr><th>From:</th><th>jeffrey E. &lt;jeevacation@gmail.com&gt;</th></tr><tr><td>Sent:
To:</td><td>Thursday, November 5, 2015 4:33 PM
Jabor Y.; Jennie Enterprise</td></tr><tr><td>Subject:</td><td>Re: Fwd: Saudi rates and CDS</td></tr></table>

core club, 66 east 55 , andrea wil= bring you to jennie. 2 pm as you requested.

On Thu, Nov 5, 2015=at 11:26 AM, Jabor Y. <mailto > > wrote:

## Interesting information Thanks <=p>

On 5 Nov 2015 10:51 am, "jeffrey E." &=t;jeevacation@g=ail.com <mailtoleevacation@gmail.com» wrote:

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

## </=pan> (cont.)

please =ote

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