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发表于 2011-9-17 13:16
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Current situation
7 t( i! @3 S4 f2 ~3 d+ Y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 ?# c ^ d- ^! ?as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 Y3 J# q0 _9 E1 Yimpose liquidation values.7 }$ X' z" m+ C6 B R$ Z! D. M* ~
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 Z$ d4 E" }3 r# \! S- s
August, we said a credit shutdown was unlikely – we continue to hold that view.) W( m) a `9 s# m0 q1 L! ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; z6 X' V5 L M% m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. Y; O- H" F+ N
3 R( B0 U1 k1 }0 P/ R3 I# n" hA look at credit markets) ~' f! ^8 J: _! Z- L2 v$ E
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
S; K. z! U9 ?4 ?) X& O; SSeptember. Non-financial investment grade is the new safe haven.
; P# a/ @- g [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% M8 A' h0 n( P7 Z. S, w4 M2 sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 O* k; F. A: k5 P0 U
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% z' j2 A( v4 ^) Z% }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( z9 e% Y3 m) `; x9 p
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 W; k4 C+ Y: i$ |6 Zpositive for the year-do-date, including high yield.
2 k" ~5 Y( h" S1 ]" o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 x* ^' E/ N, X; k, w" H: Cfinding financing.
+ R% }# Q. e) Q, u8 ^& Z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ L/ m: i* k4 _; @) a+ i% Y% iwere subsequently repriced and placed. In the fall, there will be more deals.
2 d) m" K2 Z2 Q9 z$ A8 R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" R. ?3 M; g5 q( lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& u6 j9 W/ g) Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) b9 U# w6 C# K; f7 Q# Ebankruptcy, they already have debt financing in place.$ S- f' e, } w* `
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 P2 `1 a6 x' e' `' z0 stoday.
; t, G0 E! {7 q+ r$ o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 I' t# M; u! y: nemerging markets have no problem with funding. |
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