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发表于 2011-9-17 13:16
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Current situation
% A# Q) C* Y" t0 r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 I3 a) ^" H2 l' ]1 Y O6 M: } \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, `" I! N I, V6 |+ e- ximpose liquidation values.
) c: E! B+ N, C+ f( b* r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ b# {0 }& C, {3 sAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 x) b4 x! B8 y& @3 K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 O4 A$ K$ h0 G! q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. i5 b' E4 P) m
: A' [% y' P0 Q" u/ A# g5 fA look at credit markets
) a& v3 g/ z% X Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 m: N' Z$ G/ C- e" NSeptember. Non-financial investment grade is the new safe haven.
4 g8 h. ^+ N- I+ V1 b4 q: S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; v% G2 w; @! p- Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
j% d, A' Y0 y4 F0 i( T. |billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have q* D/ @+ U& x$ t6 u, S
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ l9 r9 r/ e' _3 Y. `CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 c* T! c, ^3 Kpositive for the year-do-date, including high yield.- Z$ ^: H! C7 ^, b' M( W3 I
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 \% m1 ~. Q1 ^ ~finding financing.
1 ]0 `* C2 s8 D: a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ {% V1 ]9 C) c. vwere subsequently repriced and placed. In the fall, there will be more deals. {" ~. @6 U) n3 Q, j
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- m* g% h4 ]5 c- ^- G9 \& K1 O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. M$ a0 w5 c6 K. c( {0 J( A8 Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! d3 \6 I2 u( A: w( E
bankruptcy, they already have debt financing in place.
2 `( N- G0 u) V7 ]( n6 L European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 u' a( d* }5 Btoday.
( B/ U# s; [( q. h3 o( @9 Q! t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) R- m: y: c0 ^' n* E. lemerging markets have no problem with funding. |
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