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发表于 2011-9-17 13:16
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Current situation
" p' J: v$ S* ], ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 ]; @0 @- I( Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 ?# ^2 L! ~5 C
impose liquidation values.6 ]" E8 O( t2 m7 w z7 _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 s( ^6 B* U O2 K6 @8 f% n: lAugust, we said a credit shutdown was unlikely – we continue to hold that view.
& W" t/ {. d& u% l9 K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ c( X! C, P! V$ k k/ Q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
$ [8 r- P+ |" f) b! B/ b Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! C# Y! q7 p/ q8 t( U. T/ D0 c+ fSeptember. Non-financial investment grade is the new safe haven./ c: O7 ^+ }9 b' } p7 o' j# @
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# \/ Y8 C. ^. z# l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ j& x6 _: c6 ^8 \2 a( hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 g# r; @, a/ [8 S4 u/ @! @- K+ L
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 I8 i% q4 [# w% [1 L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" i2 {) ` A$ C( J9 y o
positive for the year-do-date, including high yield.$ x: c5 `! V: U. a3 ^' z% J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: Y8 H3 D( O% D/ Rfinding financing.8 s7 i+ Q1 |( d* s
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 M7 d+ z8 N8 y7 P0 ]' \# N) p
were subsequently repriced and placed. In the fall, there will be more deals.& D7 Z& v8 n/ A, f9 s7 y3 ^
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! c+ q$ K9 D# h& e5 M$ S& H0 T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' u0 x5 ^7 d1 Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 T2 Z# T% w* L' O3 y% y
bankruptcy, they already have debt financing in place.
8 Z) ]2 J! [% }) y1 n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' G: \( ]& v5 C' g3 r7 A/ {! s* m" Stoday.* ?6 ^6 C: E2 i3 a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! P2 |8 U: m$ x
emerging markets have no problem with funding. |
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