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发表于 2011-9-17 13:16
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Current situation
% u/ e% U% |. s* O, r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ y9 j. X1 g, d G/ Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! f, k; G) V3 R" r4 limpose liquidation values.
' E% [, W, m/ T# L& k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 Y' H4 B8 C2 m; d. N A+ ?+ kAugust, we said a credit shutdown was unlikely – we continue to hold that view.* S' ]( G" \" X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension h, M! T, U. M/ d
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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1 m( x1 c: C) N8 z2 T( lA look at credit markets, s/ E, v/ y8 Y1 b5 R. ]9 `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 L t, Z1 h9 r/ a" n
September. Non-financial investment grade is the new safe haven.3 M3 G; c0 y" X( F* J* Z& x& ^
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 b( \4 ~5 D+ F; s3 E5 |! s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: {1 @3 Q& f" |! k$ {' q# O! Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; \4 f5 J4 O" y+ N6 W1 a# Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 B: {2 k/ q$ BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 }9 i2 n; ^! W3 c9 Z
positive for the year-do-date, including high yield.
% P: M! v% l9 Z8 \3 e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' ^# V9 n+ H9 |
finding financing.8 N0 ^3 O4 m( Z1 X3 C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 S+ ] c7 ]/ i7 X) a
were subsequently repriced and placed. In the fall, there will be more deals.+ M( W [" Y) c* c; N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. t8 ~/ x% z C# W9 b. q( Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 O0 }% m1 C& a! I) ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" o1 |/ a/ j1 n) M* `' M7 _6 P1 ]
bankruptcy, they already have debt financing in place.
" e( H! f7 N g: Q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- m9 E- p5 h6 j9 s6 @/ {( X
today.; f/ J6 f' x9 @2 P. O4 {
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, @9 U) |* C+ t; Z* N
emerging markets have no problem with funding. |
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