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发表于 2011-9-17 13:16
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Current situation9 \& K L2 l" ]" J4 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 g! v- o! y: t6 t! K }) Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* ^, c7 c; O! Pimpose liquidation values.6 e" L% z! y; g+ z, e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 a2 x) w' R1 i; Y- Z; zAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 e( j- P: H0 A- m2 v- Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 D+ m. C u, o9 J) a& o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
* x* ? Z- T5 c( K' i0 a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
e% p& t- W& j0 \September. Non-financial investment grade is the new safe haven.
9 s& ^; s3 E3 g1 f High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- k" I) o6 F# G5 N- s, vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 O7 D1 ^. t! x/ I4 \/ W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. }6 d, A% ~( ?4 P0 G! Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" G1 L+ J I0 \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
i- o5 N' F- @+ G8 r( z& H: Wpositive for the year-do-date, including high yield.
4 ?7 e+ e! V: v1 A( @, b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: d' d J! ] Q/ z' P: |
finding financing.
7 \+ _" t0 v9 a4 Q. m1 g/ t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 P& |6 k4 A) X; r
were subsequently repriced and placed. In the fall, there will be more deals.! P9 I7 m, }* b* U1 J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and8 q+ B: }- U- Q, I! r8 j3 ~* [8 ?4 {3 ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" S% o2 b+ z3 d# \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 t* Q5 q5 {$ bbankruptcy, they already have debt financing in place.
/ F# b5 `/ b, A1 d' T9 E European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 K% P' m4 p: ?! g) ~0 R. Ttoday.# e- r( }) K) c1 g) v$ [
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ ~ Y' @1 D+ G, ^) K" s @emerging markets have no problem with funding. |
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