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发表于 2011-9-17 13:16
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Current situation
) X. N8 d3 @. Y0 F The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long Z6 n' n: X( z. A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! y) V9 Z* L/ R( m: g* X
impose liquidation values.
* P( l6 v% S- V; Q$ F/ Q/ w. m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 p( K7 D! ~2 U$ |, A# [+ mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
c2 e; f3 f3 T G& D( D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 v. C; x" |& A3 W6 bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 c v. y) }& y
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A look at credit markets
" t6 G% r7 w. w8 y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# q. \/ `9 M& P& I, j: d9 u
September. Non-financial investment grade is the new safe haven.
$ r, W1 @9 K- A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: p/ n3 b3 Q" Y! |then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& F: z* x. {9 h* z$ o: S9 _# `billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& w8 Y, r5 _& F3 M3 Daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 n3 n3 W2 }0 b9 w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 H6 ~' G# Z5 ^5 S! N
positive for the year-do-date, including high yield." u6 h5 B( [# Q' k2 ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ s& y# w1 `+ h1 W- w; {
finding financing.4 a$ p- k' J4 k# H# ?
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: H: ^. A F1 t- J9 }3 j& zwere subsequently repriced and placed. In the fall, there will be more deals.' D. ]8 m! }' y6 L. H3 k9 l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) g* w0 z9 i% b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 P8 w! t+ @( T3 w# egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, F5 v( o9 } U! J; n+ H: L C4 d
bankruptcy, they already have debt financing in place.
5 _" w# B, n" [8 M/ G European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% c$ e( y5 W, ` l3 n8 G# b
today.
: i0 N' p1 F6 ~4 Y. r& W+ b% m- H: _ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" K' i" |; Z0 Z! Z5 z; _emerging markets have no problem with funding. |
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