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发表于 2011-9-17 13:16
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Current situation
7 _2 a6 C2 U. v: T- s5 J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* Z( Z6 W Q8 {7 b7 uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 |$ a6 I4 r0 m6 o
impose liquidation values.
( l# M6 h3 }' U6 j# x* h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* J) E: G# ` C, j( r. yAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ F0 w0 C: q( Z$ Y R" f# S# `8 V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 c* ^! ?% A3 P! Q0 ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets) q3 l* X/ a" W0 O, ]% n( K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: T. [& N0 e) S. hSeptember. Non-financial investment grade is the new safe haven.
* B4 I8 l& n# x! j% G8 E" V* c+ k High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 y' ~$ g) w2 z& q* r8 j( Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 j: ]9 C# U* S5 J" H* ^5 obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' J; k& N; T" I: ]" Y/ l$ g9 ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 x8 y8 s- z2 [: @2 c) Q3 v
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ r. \8 _' i* W. E$ M
positive for the year-do-date, including high yield., y2 t0 ^7 y' T7 n" d% J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 v1 j7 |1 e+ q$ G2 y( Gfinding financing." j# R& G2 k5 W, v: O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( I) A- L, {+ g7 ^
were subsequently repriced and placed. In the fall, there will be more deals.* X0 z. p, T; N. r7 C5 q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, y! x) q( P9 Z& ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; D t, i9 Z& z+ ~going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 C# l0 G" d1 `, A8 ]0 y/ j
bankruptcy, they already have debt financing in place.
0 \4 J. ~: [. u8 |. M3 }/ |5 C0 l European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. X% E% s+ _6 n6 Y% K2 J
today.5 d# {5 u, L+ u" t4 J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 j) E- ]7 R- u
emerging markets have no problem with funding. |
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