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6.F. - Page 18 of 39 <br />REDWOOD CITY <br />Credit Spreads Widen with Market Volatility <br />For the Quarter Ended December 31, 2018 <br />Market Update <br />• Volatility in equity markets in the fourth quarter caused an increase in demand for haven assets like Treasury bonds, widening <br />credit spreads further to the highest level since 2016. <br />140 <br />120 <br />100 <br />N <br />80 <br />.S 80 <br />a <br />60 <br />00 <br />40 <br />20 <br />0 <br />Dec'13 <br />Yield Spread (OAS) of 1-5 Year AAArA Corporate Index <br />Dec'14 <br />Dec' 15 <br />Source: ICE BofAML Indices, as of 12/31/2018. OAS is option -adjusted spread versus a comparable maturity Treasury. <br />Dec'16 <br />Dec'17 <br />1 <br />1 <br />I <br />I <br />I <br />Dec'18 <br />PFM Asset Management LLC 1416 <br />