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发表于 2011-9-17 13:16
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Current situation
6 U4 R. y4 E7 Q" y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( h1 R' |4 l5 H( ~9 \# Nas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% C2 M5 i7 J+ l2 B' Gimpose liquidation values.
" Y; G r4 E# q K/ Y$ T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 O( _! \7 G( L; w4 ^
August, we said a credit shutdown was unlikely – we continue to hold that view.1 u( w( b7 X+ Q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& a7 p v! L: [" iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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/ j5 F1 F/ Q. L7 h/ `" ~1 nA look at credit markets) }: E' |( ?5 a' }+ o# l* t
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 B. U/ D; {4 ?
September. Non-financial investment grade is the new safe haven.
+ y/ O. y' g0 l7 X5 f High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 u s' t1 V+ c, |+ _ W: l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! ^3 @" `2 V5 J6 m1 O$ h2 X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have D t$ j a+ P- Z4 X
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 c# L0 d2 t, | z3 c0 D5 ]( {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 p- `$ A7 A' r& O. O& S- X) q( K' jpositive for the year-do-date, including high yield.
; L! ^0 s& P! A/ p# V9 g1 @- h+ I Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% Z; h/ w$ _9 dfinding financing.
( j8 `0 @% b t( K3 W. r, N Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# S, z3 ?- ^, l' A J& d' m- m' b
were subsequently repriced and placed. In the fall, there will be more deals. u% S) ~; L& ?% X% H/ ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 g' J- j& M! P# i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% C& \6 L" b8 B7 @( Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- y8 U5 e- m8 E( I1 v
bankruptcy, they already have debt financing in place.
; Z4 M4 K3 T7 e European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) x( K W* d. H
today.+ P( D8 Y% C, c! L. g6 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
E: p K: `# q" k& yemerging markets have no problem with funding. |
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