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发表于 2011-9-17 13:16
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Current situation
: G* @( ^4 W0 U# N1 C The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ L. ?* ~' Q% w6 G5 n" Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 N$ \/ c: ~+ v9 y
impose liquidation values.
y8 b3 x: o; |; c) F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ o" V1 f/ a4 }) n% b; ]1 d3 Q
August, we said a credit shutdown was unlikely – we continue to hold that view.+ X6 P+ m1 B' F- B1 u ?( q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 e' n5 D; b6 L2 u& i7 wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ o% T+ V' E3 G5 i! _
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A look at credit markets7 [: @# m1 I) e7 e: K j0 i
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 @4 \( h( H$ a, X
September. Non-financial investment grade is the new safe haven.
0 K1 i- j; B- C" D8 p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( K7 X5 |* v5 G' r- @8 c
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. }/ ?5 ^& R z% m5 rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, |' ~" h: l: }- O6 ] U6 U- D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: ?' k8 n6 M9 @. W* a. H9 m/ kCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 e" F6 X# Y4 c+ Spositive for the year-do-date, including high yield.) f* J& k' H' f* @0 a
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: V+ l+ ?9 z) E6 q. R0 Vfinding financing." w& r% Q' z6 c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 C' Y$ \6 z% u! o) l+ X3 ^1 I4 O
were subsequently repriced and placed. In the fall, there will be more deals.- V+ t" \. i2 E+ M
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! y. N- R2 d8 n# V# ?. y. `# T; i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: S$ ~& r1 c6 {0 Rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- ?8 w- E4 N7 f4 \( Fbankruptcy, they already have debt financing in place.
" e7 t' y3 h6 K) r7 x" q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 x$ {7 a/ W6 O* ~8 U
today.
- J S* n3 r1 O0 h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 K- T2 p9 d' j7 {emerging markets have no problem with funding. |
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