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发表于 2011-9-17 13:16
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Current situation
) X+ r6 f! C p% e+ [" _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 L/ M3 {) [$ Y& w% r: Q. q9 A$ I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 c8 n! W v. K6 E7 E2 Yimpose liquidation values.
# W j9 [$ A$ k% f) h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ D: k, W. j4 N( L$ _/ d9 b5 }
August, we said a credit shutdown was unlikely – we continue to hold that view.8 [; I: n% g" y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! [. X8 w. ~# b( ^$ R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; k5 A7 S$ ^( |: ~
5 [" J- n# ~6 Y r
A look at credit markets
$ {: i( @. O$ A# o9 s8 | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: B @3 c3 w8 `. h; A
September. Non-financial investment grade is the new safe haven.: e8 K ]1 @( K/ G$ G9 k" I
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& L" o# \ i+ x k. v/ ?( pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% k# D3 v. A/ C! y; H0 s2 O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& {* ]% j. g& q; P- r$ ~# E' _
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ a1 k: Y* y& Q! R7 A& O; ICCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 C6 ]# G( m9 M5 ~- G3 ^& \# ?positive for the year-do-date, including high yield.
% ?) k2 X: |0 d& [0 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 ]8 ~, l, ^2 M C z
finding financing., M4 j1 h) ]. E8 `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 d$ o: w% N; R% F, B7 iwere subsequently repriced and placed. In the fall, there will be more deals.
6 F/ E7 r4 c- H0 K" Y2 s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ q; o) m7 b3 n* n5 K4 iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; f* \" C- }9 M8 o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 S* ]9 x4 S' x1 S# Kbankruptcy, they already have debt financing in place.
+ o! B* A p' G3 N- z( _" ^ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 W3 \5 M' q- N: I
today.
* u/ S L. [& E1 Q4 B Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# u9 `7 a$ P# v9 H, x- Q8 [9 S8 Z% c
emerging markets have no problem with funding. |
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