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发表于 2011-9-17 13:16
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Current situation# x: S% L0 a; c6 ~# ?! o
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( @3 J: ]2 w5 L. f, Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 A/ q8 b, Y: T# X$ b
impose liquidation values.0 Z6 H+ m! l' a9 U' k8 U
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 ?6 w# l5 O W; ?' W; G5 F8 n' vAugust, we said a credit shutdown was unlikely – we continue to hold that view.% {9 j& q- X+ N$ ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 s- J4 P6 e0 r1 ]9 z ]
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ c: y. i, p" d1 W/ L
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A look at credit markets, g9 t9 U" x. j/ e
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 }2 o( M; ^) j4 K7 eSeptember. Non-financial investment grade is the new safe haven.0 r5 h o( \1 P, C" a) Y8 N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) B' `3 v+ _; w* [- B, u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% J- T2 ]& [1 vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% N( F3 c! J( maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 X3 C: d: J( U$ U: {8 A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ @# A0 h( q/ E3 d! g! Npositive for the year-do-date, including high yield.
% u) T5 X/ r" r6 m9 X# j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" ?6 J# n' m' B* Pfinding financing." ^8 h( Y R* Z: N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ F9 r; x3 p0 F
were subsequently repriced and placed. In the fall, there will be more deals./ z/ J& d9 {9 S; o! j. E _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( d/ f# j' O6 B1 N% Y$ H
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) e- w/ E8 Z c& j7 k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( n) U) i; g* Q4 w
bankruptcy, they already have debt financing in place.
- e% S9 e- W4 T; P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! P1 n+ y1 M* o' k3 h; g/ `9 K0 ^
today.
* _9 C. I4 L: @7 V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) B; E* L- x2 X; O/ q4 M8 S! F- ^
emerging markets have no problem with funding. |
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