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发表于 2011-9-17 13:16
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Current situation5 m0 L- b H8 N- `! v" G. d' L& J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 l' q2 j1 |+ }% h) q7 `. h1 {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' e' ` K3 s5 d. ]! p/ g( Limpose liquidation values.
6 e8 `$ Q: \7 v( \7 p* ] In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' y* w7 q: ?1 u a! y& Z$ r/ AAugust, we said a credit shutdown was unlikely – we continue to hold that view.
6 @( ?5 [. Z) ^3 z% L The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ E) Q: a' g: a8 }scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) G; Z; d& A, n( {" _A look at credit markets
& U0 `+ e. e( x2 p; c4 A& v6 O1 F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) a1 g$ I. N$ u2 g2 U# I RSeptember. Non-financial investment grade is the new safe haven.* W' u" u$ j1 p
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: w! h% [3 b- v3 N5 Othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) v% f; ^. g% y+ W* ^; L' K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have e# l9 E5 d: o9 x: Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) l( R/ Z- a5 I7 n) ^
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ l; E) S" _ K" t5 H& H. S: epositive for the year-do-date, including high yield.) t8 p' @- e$ z& g: a; B
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, f+ J/ w6 N/ N
finding financing.
5 Q4 ^3 H+ l/ ?7 ^4 P! x1 W# Q Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. T z$ M" z( H; A1 k iwere subsequently repriced and placed. In the fall, there will be more deals.
! J& l4 }3 m4 K* D Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 z- U3 m# ]0 ~; P* C8 t: |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# U& F" H; S4 Y6 ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! \- {( d( y/ X, X# Gbankruptcy, they already have debt financing in place.) A% s4 U8 F2 c; V8 A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% T% I5 m: @. ~9 O; y" ?% C+ ztoday./ \+ D+ @) ^1 I- y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 v! m% o8 Z$ S1 _) P
emerging markets have no problem with funding. |
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