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发表于 2011-9-17 13:16
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Current situation
+ @' d2 e( F4 R# \" y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' J( Y. R; ~ ~% C+ W7 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 E4 L+ ?+ }7 R, l
impose liquidation values.
4 x- D- l _7 W% ~; p' k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& x- r9 h6 f3 J* d2 Y8 T( w
August, we said a credit shutdown was unlikely – we continue to hold that view.% F% ^2 q# |$ f& }/ K. n
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 ^. i5 V' H$ d/ e% w3 s6 ?scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
4 T6 |( b. E7 W Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 g: B! l" z, k. Y0 a, J
September. Non-financial investment grade is the new safe haven.& m1 f7 k! j- O+ `( v! [" j
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- V4 O" _0 D( k( M- ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ X3 U* q( F0 k3 E7 cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 s6 g4 V. h1 D' s8 b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% g9 i2 i4 B3 b8 O( C6 ~# n6 ~7 FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ h2 c) [2 j: \5 p
positive for the year-do-date, including high yield.+ R( J; F6 C& u% x' z) G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 ]' U1 J: N9 I- _6 e
finding financing.! h* v2 B) f4 H( k/ V+ r' ^% o4 _! K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* U, X2 b1 I* q+ Awere subsequently repriced and placed. In the fall, there will be more deals.+ ~- o# h2 L4 j1 G
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& q% `9 G$ ~; L- V% N
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) ?4 Z ]8 O& f6 M1 k( t" i
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 z+ C, d" _* r7 xbankruptcy, they already have debt financing in place.
7 K9 }" k W* F* Y' B" v+ O( H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* i" t% t/ m/ N. wtoday.
' S+ V8 r4 b/ o7 w0 Q( p/ l( M) e Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in H0 @9 x/ u {& D$ r/ Q+ b0 y
emerging markets have no problem with funding. |
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