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发表于 2011-9-17 13:16
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Current situation
; R( y) ~2 v8 t# A& q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. B! o! j) {/ u( T H' i
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' p3 Z: V8 H: Kimpose liquidation values.
* Z6 }* {6 i3 C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, D4 ~8 K) `, J4 P! f7 j1 F& B5 NAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ ]& S$ v8 C' z% `! T# K8 g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 F" P8 H& b% E
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: O; F. V! U8 Y; X4 ]7 OA look at credit markets
$ `5 I- K& x' B# {$ B. ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' |% d. h( Q d5 \; D. p
September. Non-financial investment grade is the new safe haven.
5 x3 `- y# H* H' D- M% j! |; ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) [. s% S l' tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. ]3 q% D/ z% C5 a% O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& h% v) f% T/ p4 \/ @4 @access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' `( u% W, y+ B% MCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 F: `% s2 }1 C0 E. q1 [: U5 f0 \positive for the year-do-date, including high yield.
/ R6 H, R) f5 ^. ?4 _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ n3 |3 \; B; x8 G2 D/ H1 T
finding financing.
( c% f% F v( R5 o2 w8 G; T) F. ? Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 [8 e' y( d) D( E, a/ Twere subsequently repriced and placed. In the fall, there will be more deals.. W; B+ e- f L: d0 v+ m
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# B; S' d/ n0 u& V. his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! t( L3 Q \) ~ Z: T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; [5 y+ I4 Z4 ]* t
bankruptcy, they already have debt financing in place.
: s' u: b. |4 [: b6 H& f" s6 z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 P" F6 u# o$ } o4 ^today.5 [9 u% v' {3 L( {! }
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* R) V/ a6 C# |* a1 W+ D5 j: C
emerging markets have no problem with funding. |
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