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发表于 2011-9-17 13:16
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Current situation. F% j5 \$ C+ x7 M0 \/ e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' [0 [' I4 i$ Q4 W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may8 l/ {8 i7 I: v% y
impose liquidation values.
( {/ X S1 x5 U0 y, | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% N/ f2 v# |, ~: i9 P, B# T
August, we said a credit shutdown was unlikely – we continue to hold that view.
' W( r/ [4 e+ S h, {# N0 D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 E6 G( y- L. L+ O" @( \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
# h$ w7 a$ Y+ O9 ]8 C1 e C! D( U$ u, Z# S- X
A look at credit markets
) ^% X8 R; @1 L4 U+ |; o. h Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- @) @" x1 O9 L% k; k1 ]
September. Non-financial investment grade is the new safe haven.
9 A- i2 P* `% J* Z I, [9 ^ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) t+ o4 ~% O% K7 n2 T+ y9 \then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# r/ c9 Z; P* c- Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
$ }/ ]( e( U# z; u5 A+ l! W/ F1 a% iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 g1 ^( T6 a- E. N9 ^/ [2 ?# qCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( U+ q4 T3 t! C1 Kpositive for the year-do-date, including high yield.
3 i6 a+ J/ o2 y( I Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. Z2 Z: x* {! w0 M3 M4 |finding financing.- K. p/ E/ w: u6 w/ C7 M
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# k5 Q! f0 L( X/ ]* Swere subsequently repriced and placed. In the fall, there will be more deals.+ Z" G5 N! o6 X
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* {, X. {- k* F5 s6 B( Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' d- _+ i! b0 h) P7 B* k% p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# D4 ^- Q! D7 M5 {7 y- X1 Z* j
bankruptcy, they already have debt financing in place.9 G5 [2 n% E( D( y, j4 \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ X% f2 X/ Z! S; e, itoday.
' Y7 ]' D! {( [ A ~6 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) R! S9 g, u7 n/ o6 u) O" T; n* Temerging markets have no problem with funding. |
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