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发表于 2011-9-17 13:16
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Current situation* y, B+ a9 w+ d4 i( \. {0 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, S6 j5 @6 {: X# g$ V7 h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" m% M: s4 B( H7 _% w& q6 |impose liquidation values.
/ B9 s& L, Z6 X* u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ G: @7 r* ]; s! y: v3 I3 T' OAugust, we said a credit shutdown was unlikely – we continue to hold that view.( G/ @0 h- `1 e% ^' l* t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- m8 M! L; H7 p2 m3 d+ Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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8 w! Y$ L0 T4 dA look at credit markets
5 v; M" t$ n; _4 S: J3 L9 j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 w) H z: u* F7 b& Z: h, L" `0 f
September. Non-financial investment grade is the new safe haven.! U: ^0 ]$ Q0 D( n5 m2 t4 U
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: r5 C7 b4 o qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 S" r8 O9 E( I7 P5 p# y$ W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' M+ ?+ d2 R, z: @+ faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; L% j0 F# j% \, N0 Q( s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
, B$ ^2 k5 G8 q8 p- hpositive for the year-do-date, including high yield.2 F* l) G3 O4 P a+ ?5 u9 P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 H4 F% W* _* @* r5 R
finding financing.% t$ F- Y Y9 B+ r' [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 }1 o0 A- U) g L" Hwere subsequently repriced and placed. In the fall, there will be more deals.
3 I+ G) n* L% |5 x; ? b7 N! E% D Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, l8 D$ m4 Q% E) Gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 `9 [% f* W" ^ {5 v: A% o [3 @' f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 O0 L9 G. `( m, B& M. ] m& Ubankruptcy, they already have debt financing in place.# ~% `7 R( S, j1 f0 I! Q6 |
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& x7 X( {9 v4 c r* i6 ]4 O( s
today.5 ^ a- i: |) @4 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; v5 A! C! N/ l
emerging markets have no problem with funding. |
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