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发表于 2011-9-17 13:16
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Current situation
4 T6 H" Z( X6 C$ A/ T3 W+ E# V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 _* F3 a. N# z1 }$ x
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' _9 s. M$ L. vimpose liquidation values.. V0 p! c6 |( r
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) f; \& X! }2 K# o
August, we said a credit shutdown was unlikely – we continue to hold that view.+ k: W; x$ b, ?4 I3 Q* u6 `- Q7 O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ _1 W+ y; n& D; f5 Z7 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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' C8 t6 J- k9 Z: b* |! N6 z: Q' YA look at credit markets
. n+ A2 ?# w. V" A Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 F. M7 t: y. Z2 c* J. Z1 Y/ B
September. Non-financial investment grade is the new safe haven.
5 l7 a$ B% t2 z R9 U5 j" _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 ~: P: H0 o n6 o b! j
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
7 n7 d/ Y, R2 ?& ]0 Jbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& o' x& M0 \5 s/ p' v" W0 raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 M) P: ]6 t* s) D4 ~$ E$ E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ ]- p4 d. w( u: F8 Q& I: |positive for the year-do-date, including high yield.- u" X# Y0 L$ @" R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, x( f- L6 d; X7 L! X$ U% b( M b& F
finding financing.
1 m; c' \0 p" M+ D; M Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( F7 g. Y& b& |! V% p7 Kwere subsequently repriced and placed. In the fall, there will be more deals.5 @1 _3 C, ^" ~ L0 h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 @2 Z4 l1 ]4 X) l' P% _/ ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. y% c2 ~/ A q) Z7 {
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- O, P: \' U! q7 b% m% a2 h+ Pbankruptcy, they already have debt financing in place.- V! @5 d% S, s# o7 r4 q/ l
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 G3 `+ ^" b3 h- Q# k8 Btoday.! j3 A' u( j. Y6 H7 ]1 K; O) x! j; y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 _0 B0 x F% L1 ?/ Q: [
emerging markets have no problem with funding. |
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