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发表于 2011-9-17 13:16
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Current situation
! Y( j* H3 d: z; `( o1 \" @5 q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 n$ n3 [+ f5 ` g- [& b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
`5 M% Z1 z( @8 j6 x$ Dimpose liquidation values.
0 {" B; H' J( z X. w- `/ P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ L/ h( v; w8 h2 L$ s4 G h2 \August, we said a credit shutdown was unlikely – we continue to hold that view.9 l; L( U- C: b L
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! |/ ^. d3 k( a3 |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
# ]' Z, t( p5 a/ a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% P. W7 C/ S$ j4 Z. S8 A+ ^$ J
September. Non-financial investment grade is the new safe haven.
+ Y8 ?. K J3 m1 m5 W& E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) p1 k3 Z$ c" Y5 X& a1 o% i$ F0 d
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 |2 `& b) `1 n. }# Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 n# L) N8 A* P4 ^+ g |- kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ G. b- s2 d& QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 U) `0 O3 h; jpositive for the year-do-date, including high yield.
7 P l, `) H& ?7 p d. K) m& q3 A Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 z4 H M8 L* l' b* M" x) Afinding financing.
3 ~; Z' g+ L9 b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# n2 N# A- Z; Q) @' z- w
were subsequently repriced and placed. In the fall, there will be more deals.$ G+ G; L% A/ N1 [. ]
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; j( D+ q" ?9 w, b! S$ Iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* v; \: J& ~6 C7 j8 k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- |- |# x L/ I1 a1 [bankruptcy, they already have debt financing in place.; W$ j' E* \" @# ~; |4 V x
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 \# r( F8 W T' r9 G1 p1 f
today.: G" a! a* U) k# {9 J5 s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) w- C' H. f3 g+ I! D% P1 ?3 X
emerging markets have no problem with funding. |
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