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发表于 2011-9-17 13:16
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Current situation
$ }) t! ?: e% q+ B2 V0 k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 r' A% b3 l( v4 }; a. @9 f* Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" L$ o( M4 n% n+ X. \
impose liquidation values.5 A3 F) Z( m" ]) y' q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' c! B: I# s t/ S- k0 I
August, we said a credit shutdown was unlikely – we continue to hold that view.
% l* c1 r$ Y8 X/ R, W+ _1 h! ?" l# ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 t b8 Q# w! R$ hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets/ S! D, g1 r7 P z8 {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) _! |/ P+ q$ T6 U, a. CSeptember. Non-financial investment grade is the new safe haven.& Y8 r$ j, A8 @) U7 o- w
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- c7 i7 k4 t$ A! Y/ A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. [% b, @) W& d6 F8 W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: a- w( G* h4 Y/ E! I! `' n6 b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' `( }) x% s* O9 I: n2 F+ c
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% |: X# F- {) {: Y8 upositive for the year-do-date, including high yield.
) J; f' Z- p w Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# L' K- U7 d' |' L' o' I) Q0 mfinding financing.
$ s5 S# A6 B4 C8 E1 h" }& V1 A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 F, q: I* p- S7 Gwere subsequently repriced and placed. In the fall, there will be more deals.
! X, |# n; t R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ O) U; |2 r/ V; l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, X% A! V8 c, r! E2 `1 t
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 ?2 r4 V4 ?+ e+ ]bankruptcy, they already have debt financing in place.
7 w' F- q0 E" l: g8 L3 z, E European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 o- R9 `8 [/ i9 u* d3 W. ^
today.) {! m/ O* r* h3 O: R- r: z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in W' H$ W: A' Q% S
emerging markets have no problem with funding. |
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