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发表于 2011-9-17 13:16
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Current situation
- n1 ?; L, N+ g" j1 E6 ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% e# y! x0 U1 C- y j
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; Q: a3 K! v. w/ P- Y- B4 }impose liquidation values.' P3 ]$ ^! b, M5 |, g# ?6 R; J- R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 _( P) L. |2 R7 kAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) |. { N- B2 `5 s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; I$ c" E6 f8 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
! P# w8 Q+ A, Y0 g/ J3 X1 p' Z! _7 G- t( ?
A look at credit markets
: S7 t1 M9 L5 s1 S4 `( {! k Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! L; \. q- M+ H8 ^* f; m! t) F
September. Non-financial investment grade is the new safe haven./ Y5 N f" k- w4 ^1 E# n r% U- f
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; \" u% e; n5 xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 D* @1 k# e4 {6 Y/ e! S' ]- o
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* Y1 O+ }# X. taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
P' |9 g8 Z7 yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ q0 D9 q ^" {! ~) l2 B8 I- H
positive for the year-do-date, including high yield.
8 A! U/ s- L$ e2 @- g) f" e" [, g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 e& `7 v+ _- a2 A' [2 ffinding financing.
1 U7 i0 O0 [& ^2 A# z' l# b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 O% \: x/ W3 r0 i mwere subsequently repriced and placed. In the fall, there will be more deals.7 x: j+ U7 X4 F' }! s2 }; v9 a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. M! s$ A# J! m1 }+ D" i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* e" S; H; a. E' T- c4 _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" A2 j% g B0 W* U
bankruptcy, they already have debt financing in place.
8 f3 A3 N2 a/ m: l. a European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; Z( t) x7 M5 T1 v+ Utoday.
- N! t$ M/ {! v' P7 C! C3 ^! T C$ y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 X/ ~5 x% u h2 z& Y% b4 c1 n+ Temerging markets have no problem with funding. |
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