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发表于 2011-9-17 13:16
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Current situation
! P3 L3 G# `+ L" ?( W+ r* U( z* H! q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, U& D+ {: i. e+ c8 I' p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- K! H8 U6 n7 L3 B8 ?impose liquidation values.3 F, u6 w6 t' s( I' Y: x
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 R2 Z6 K. F- M4 ^, a0 u: V
August, we said a credit shutdown was unlikely – we continue to hold that view.* f# y+ ?$ @, {/ T* S4 I( H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" g9 }" A" q! [# `% o) [
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets0 O/ a6 _# X+ s4 d/ t
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ o' U+ i) F+ j: p' A( O
September. Non-financial investment grade is the new safe haven." f: t; u8 V, Y# M; z7 n3 s
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. K+ }: K) h3 V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# \) q. }0 [ @: I2 abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ v% B* x/ G# P4 P
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 \( l$ w" k8 f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" K8 C: h1 \4 ], a" O/ i0 w/ b- vpositive for the year-do-date, including high yield.
7 c9 b6 J8 J* ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 P- m+ [2 `" ]% }$ W4 Y: Hfinding financing.& M @5 O0 F& O+ `6 c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 t+ m& l- `% u# E, W$ g- p6 Y1 lwere subsequently repriced and placed. In the fall, there will be more deals.
6 H- Y% S5 U& Z- s/ ?: X Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 q: d3 z- }7 {% Y) f
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. ~5 r1 d! M2 P, r1 \# _" I2 M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' v9 K* O6 A9 i8 D
bankruptcy, they already have debt financing in place.
* w. W7 A1 e1 E$ {9 ?) ` European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& }0 {6 L/ a. J$ Otoday.
+ b4 f6 K/ W) U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& n3 ?: p7 `& }# `emerging markets have no problem with funding. |
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