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发表于 2011-9-17 13:16
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Current situation
7 W" e7 O+ U/ M/ Q/ ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" V5 L7 F: m4 p- a, u- g4 c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" p, h8 ]5 [4 E$ I7 }4 F& qimpose liquidation values.- A C: Y9 W! j) W" Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 p' E+ A0 r8 ]# o
August, we said a credit shutdown was unlikely – we continue to hold that view.: A! h6 k3 ?1 N o# \1 V3 B# y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension7 l- t! a5 g8 \( J% _6 ^
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% {% }! X/ ^; R' D" J3 n0 g5 F
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A look at credit markets
l1 ^5 j7 A9 t- u4 x Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( B) [1 S3 U1 m; u- ~
September. Non-financial investment grade is the new safe haven.( c8 { z1 t( G# @% i0 w
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! o! Z3 r8 f0 Fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 h |( x8 |3 d6 E( bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 J: m; Q0 l. C8 `$ Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 k+ ?- d. @, t5 R7 D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 J6 k" Z' o- G, |# Epositive for the year-do-date, including high yield.
6 } t- a; A* l( a, k" U! X Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! A: x/ _' h: h6 l @5 g: G
finding financing.
( h# Q$ `6 i2 M# c' r5 U: C Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 o# x8 |" a( }; f" u$ b) v0 R. ~! v
were subsequently repriced and placed. In the fall, there will be more deals.
* I, a5 M$ |! F3 ]. n, ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. h) X3 Y: R- E5 t+ j) r7 j' Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 ^( z2 a$ t* q5 o0 d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& i1 u$ E/ e" B9 U5 ?8 `bankruptcy, they already have debt financing in place.
; [. u- N6 I6 b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain t4 D2 H6 \2 m# Y7 T
today.
/ m! K' p1 l4 J3 k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" U A9 o4 ^1 Y' u' Qemerging markets have no problem with funding. |
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