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发表于 2011-9-17 13:16
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Current situation5 G3 k' W( U: x4 L* Z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ F3 M5 l) ?; g8 j6 mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% X) c, V) Z6 Aimpose liquidation values.
/ t8 G7 U5 F' O) o, s- _ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ X- N# P @" i' T
August, we said a credit shutdown was unlikely – we continue to hold that view.
( M4 L# h/ g% y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 H- q6 r6 |1 T: p+ K$ U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% n% @# j3 J- f, ~
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A look at credit markets. i% f8 F: e: L6 a
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- c1 s( R* Y3 B# d
September. Non-financial investment grade is the new safe haven.1 J/ ]3 Q3 |& B! v6 ~; O$ |, {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 ^! ?$ T" R* K( a6 K9 ^' x& y" tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; j7 n2 v" w% O1 B% [+ T& R1 }5 Nbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 h* t5 W% d% s/ L' [) e% Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! n" E/ n: u; T' I% c7 a' |CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: R0 x9 O J7 l( d( Z+ lpositive for the year-do-date, including high yield.! U+ B7 F; O2 h( x- y+ ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; ]% |3 N" y6 z. x4 M8 Yfinding financing.5 Y& I' }( O0 d' X' h( U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" t8 I) ?+ \! |1 w2 ?2 {# z
were subsequently repriced and placed. In the fall, there will be more deals.1 ]3 X$ b* U3 q# I) n* H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. \3 l& x+ P( N! ~8 S+ T3 W8 P, His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# z4 |6 v0 H! x5 _! ^1 E
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) ~' m/ p, {. m7 s) s h9 @
bankruptcy, they already have debt financing in place.* U9 V# Z' E/ W
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 `+ K/ R& V( k
today.
- t7 Z: w! p& a Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 k8 Q5 ^4 u1 _! _% ]0 w: N6 Z
emerging markets have no problem with funding. |
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