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发表于 2011-9-17 13:16
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Current situation; q/ q1 R. ? T9 L- v3 c) L
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 K+ x0 T5 g- k7 bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, Q: v% L! g: `3 b$ g6 L w) L
impose liquidation values.
- Z6 r% c( c4 r( Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- m; G6 N" Q/ fAugust, we said a credit shutdown was unlikely – we continue to hold that view." e: N) b& e! {' Q+ ^7 I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 [9 U0 W. Z0 Z1 J5 e! S# F `( O: C1 Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! P8 v* \* g2 V8 U% i
; v. D2 }0 z c* Y
A look at credit markets2 ^# b# R* G9 G$ Q( w) f4 `4 v3 w
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 f: x$ a4 W; n8 p+ XSeptember. Non-financial investment grade is the new safe haven.
: J7 _0 g' V7 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ K J& Y# @5 W/ h1 \8 d/ C, Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' T$ J) E) i) _, @' p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) I& U/ v4 }4 u4 Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! H$ [0 z8 I+ n# {5 o2 J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- f. o8 ^/ \: Z, y' Dpositive for the year-do-date, including high yield.
1 F; \* u0 b( @/ s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: U* X C6 T3 X; c( R0 e4 w
finding financing.; y! f" D0 o: H1 F9 C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( C! N, @4 O( U0 }! ?; kwere subsequently repriced and placed. In the fall, there will be more deals.
" v/ S; E# _$ y9 u- ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* L6 u4 ^& J8 c& ?2 Y0 M I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ P% s- `# Y) p2 w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. x6 v! t6 E( s, R) E& f. Q
bankruptcy, they already have debt financing in place.
9 D5 t7 b( \$ ~& }! x% n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
S7 p' O' G# R/ G( E/ h% ?) i# q$ vtoday.
1 Z$ ^! q6 }, {0 o% p3 ^- c- O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 _1 m5 b7 J, {) Wemerging markets have no problem with funding. |
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