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发表于 2011-9-17 13:16
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Current situation' s! s4 x2 h9 j9 ~/ @ c. S
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ W! G4 g- G$ x- w5 L2 @9 f+ e6 Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) V7 z$ m) l7 J; ?8 l
impose liquidation values.
, i# g+ M+ u5 I; i( e In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 @3 i1 C5 F! M+ p0 Y+ M2 nAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* Q7 X$ O# j6 R! }2 m5 J- q0 @ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 q2 H/ _% Y. Y4 e3 e) g8 j& Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
) X4 ?# D$ [, G. u. o" T3 F2 M5 \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 I$ J: u9 t8 n$ ^September. Non-financial investment grade is the new safe haven.
8 Q+ B8 F& ?5 n. x, }6 j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. h' l0 H) p) {: P5 Jthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% P! G# C# A* x: y& @% L: [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: \; a! J% A0 d; ?" ^- r$ G( _0 Saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; C5 E: L8 Y9 W' m% xCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; o+ F5 N$ m0 J
positive for the year-do-date, including high yield.& @! ~& ~" O' W7 E. e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* C7 `) F- S# pfinding financing., e0 Z o( e( m. X$ K) x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 ]# ~0 T9 `8 v3 ^2 o6 m" K
were subsequently repriced and placed. In the fall, there will be more deals./ F" b# ?' [# t. C. {
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ F, Z5 i# o% q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* T1 j/ n9 o8 y" {) t/ hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- i) P% c* `/ w$ P) {2 `8 Tbankruptcy, they already have debt financing in place.
4 B, m* C0 `; X' `$ e European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 u4 u( J# m0 @7 D3 g, E4 X$ W+ f" [7 G
today./ k0 U0 x" e+ `: s! `. |
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# X4 [; Z4 k1 m, x2 O2 c0 J w
emerging markets have no problem with funding. |
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