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发表于 2011-9-17 13:16
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Current situation
+ c% q* u1 V% T- x' g2 \ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 f/ w2 i: g7 h4 @! q+ M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 O7 m j5 [) @1 O6 S& ]- q5 o6 ^( A
impose liquidation values.
4 v6 p# @: {( ?/ S/ C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ C$ ?! W5 W* j4 Z! b- x* i
August, we said a credit shutdown was unlikely – we continue to hold that view., k l, ~' t5 S& ?& c; T' S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 S( t3 G* S9 R4 xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& C/ A8 ]7 k& G4 F! \, pA look at credit markets: Z9 m& _% F6 c0 p, D
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
_( Z' U. D4 L! e$ @# pSeptember. Non-financial investment grade is the new safe haven." V& Z) O/ F4 N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' X. u0 W3 ~; O" y8 `: o3 L! Hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 ^1 f. z' g& P$ N! h: y+ d c# \/ G+ j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* Q' U( c2 f/ \* q. c" d2 ]: |% m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% | |2 e1 l! Q; ` S4 V
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- d& \1 K% B8 n( H; D9 _9 _
positive for the year-do-date, including high yield.* l' |: |, d+ p+ N0 A! z' y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ L9 r- y) {% W% b# R5 rfinding financing.* J) ]3 k0 z* ^! ?5 r3 q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 b* a! K8 I4 ]
were subsequently repriced and placed. In the fall, there will be more deals.
7 N! z: d# m* {1 O3 } Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 P. D/ Y* Y' e; Y* G
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ {4 T' @' _9 k: d) A/ |! O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 y1 t* {1 S Y' O+ q" ~- m( \bankruptcy, they already have debt financing in place.
5 a! C( q V" L" { F; ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( h: o& s- O% P$ _" p
today.
2 K3 R) O* ?" M. Q! Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( x8 [3 H1 K7 @# z* I$ J
emerging markets have no problem with funding. |
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