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发表于 2011-9-17 13:16
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Current situation
- _ ]% w7 n# _ D8 c! ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 F+ u: b/ Z. ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! L/ _+ P: ^5 J# d
impose liquidation values.
; T" y5 L* l+ P* h5 L! \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 ?" f, f5 c2 N' Z% l3 H" B0 o, ~
August, we said a credit shutdown was unlikely – we continue to hold that view.5 ]: a' I3 D* W: a1 a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- V1 V+ O$ e& {, t& l7 o! H! |! u0 }) fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ g: M- @0 \' i/ U6 y x
9 d- Z, P: |% c2 H" [A look at credit markets9 [- j( R8 I6 c+ U3 W
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; s" X. x) \8 { C( @" w2 M9 Z
September. Non-financial investment grade is the new safe haven.
: H- P( s& O; c+ I High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 h' \* _9 x5 ?! r7 Ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! v) C1 ]) \& M8 ]5 q" K; m0 R: z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" w5 n) p5 l; g5 M4 ?& Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 K+ v) m8 o- I2 `. [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: J0 L$ O! S0 c+ k) L3 Xpositive for the year-do-date, including high yield.: x2 z$ r4 s/ \ q3 U K' j: S, ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ @8 c% U7 y6 h0 \& Y7 |; X6 Pfinding financing.
- X3 d5 [+ s0 X. _' P D+ T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- F1 E$ B+ s1 n n3 qwere subsequently repriced and placed. In the fall, there will be more deals.
( \& G$ x; z5 t$ n Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; F( ^5 ]7 s. J5 L2 B% Y# B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 o0 Q8 |( _5 W# b0 z1 {# w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( s9 F0 s+ @8 M; Abankruptcy, they already have debt financing in place.* A% d) u, B; U% E4 f B' m7 c7 C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* T4 E* R& ~% k: z, l. D# Ptoday.
% z- D9 @3 B8 }- ?2 O, h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 A: J; a! }* ]$ j" g
emerging markets have no problem with funding. |
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