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发表于 2011-9-17 13:16
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Current situation
: f& u+ R& l" Q% a The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' t% y7 A( E; |; R( ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' i7 ^* z4 j, |- Ximpose liquidation values.' e4 R$ ?# X4 @8 W0 d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& _" z. P# w$ U/ H0 R# ^6 J
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 `' z9 ^1 G8 |2 ~0 X1 |3 V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension U$ K9 U6 h0 y" A0 \ x
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# w* H! p: H0 aA look at credit markets
3 m& j& H4 Z2 F2 c, H# ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! I& k# V% {6 {; s+ a& @September. Non-financial investment grade is the new safe haven.; @7 G# G$ g( q# Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ ~4 R" w3 P! y3 F O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! W; V9 X$ d. B5 e
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& T: y6 Q) A& xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 o! H4 H2 d% G) v9 l9 L; DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% W$ E7 W9 c% G! C5 B) zpositive for the year-do-date, including high yield.
. g" A4 f# ~2 Q' d, B# H Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ Q0 }% B% ?. @. h+ j0 e% F9 `
finding financing.
. F3 `, q' a9 W1 G, t( N$ p: ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 s# g9 S- j# n5 w8 K- O! G. L
were subsequently repriced and placed. In the fall, there will be more deals.
8 ], j$ V- T6 r1 X5 s4 E" Q. f2 K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* n, R+ m, }. T, g* m! {
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* `( f2 P- w4 B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) a {4 H" l$ c' e
bankruptcy, they already have debt financing in place.
: S7 ]1 G' W A9 {* q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 g! R! ?0 }6 n5 F1 Q. ?today.
8 z2 x. w. C; Y, i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 { J1 ?2 e3 |/ U! m8 uemerging markets have no problem with funding. |
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