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发表于 2011-9-17 13:16
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Current situation
2 t9 }, W* N1 S6 J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* X2 \4 u! y/ _7 [( M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 \% D& j8 _ ^5 I" G: _impose liquidation values.
! P$ m% K! I; s' Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& T% k" A% u, b0 L4 s* cAugust, we said a credit shutdown was unlikely – we continue to hold that view.' s1 N {/ a) k& g9 _! j
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: ^$ L& R- k5 k% K/ u: R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 K: H8 }+ G+ D2 c. e
5 Z7 M& u6 G+ {1 n1 v4 ]4 K
A look at credit markets
) y. q" r2 Y0 w5 t& { Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ V! d; F9 j% V8 a7 @September. Non-financial investment grade is the new safe haven.
3 e% ~7 K/ Z4 s7 w5 f+ E) w( ~, w* W High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ Z% R1 k) \. Q7 c; O% H m
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 f2 a4 a3 h2 T- _
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have F' [2 r) e$ [- n5 x
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' Y1 k6 E- Q9 @; m/ gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# ]: Q/ a/ V: Z0 `
positive for the year-do-date, including high yield.
9 L4 p8 I0 m5 O N) i) j# r6 a+ _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 U5 W' I% M" Y( d. Z& t( ^3 g
finding financing.' X) W7 e u# Y4 }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# e+ i9 q! i5 l a8 Lwere subsequently repriced and placed. In the fall, there will be more deals.
+ _/ n3 D- e. Y6 o. `3 k- s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 l) t( f9 c; B t0 u' n2 O; q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. \% j/ W* _7 K3 d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 Z* E0 S7 ?; r1 B5 a+ }& _: L
bankruptcy, they already have debt financing in place.9 z x. f/ ~+ z2 O
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ R) H) I. j3 [# M: H! L
today.3 |$ i. _) X, {" W+ A& I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 B6 j* {- P# U3 V
emerging markets have no problem with funding. |
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