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发表于 2011-9-17 13:16
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Current situation3 }8 _7 Q7 ~( D( p8 O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# u8 [/ _4 Z6 h3 b/ K4 Z! \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" y& e+ E% K5 h# ]" ?/ T
impose liquidation values.% e5 d$ q' c K3 F# U% E2 ~3 n: O
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# X* `$ L' D: S2 V
August, we said a credit shutdown was unlikely – we continue to hold that view./ C9 h# q- ^; k$ S8 o* `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 _( r+ T& V" x; E8 m4 Z4 c) cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
4 z1 a8 c* {+ B" w9 j/ A) o3 \ _8 v Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# b* [: r, t; i7 x, a, Z7 R- V: f
September. Non-financial investment grade is the new safe haven.
9 b8 o4 ]8 {; Y8 m; y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ h" ]$ g6 x$ k7 e; u1 R4 `0 \, V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- N X# N3 I" ~1 C
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 U3 t7 [9 h( m8 r; X8 I
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 Y, {3 ]7 i9 b0 dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, ~; X/ }, @! i1 \* E& {
positive for the year-do-date, including high yield.9 J% }9 d1 ^$ z4 l+ g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" B. e3 T1 H$ }finding financing.
' ^7 F* ^- X/ U B2 o% j Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
O/ a' R, ~; d1 c* Owere subsequently repriced and placed. In the fall, there will be more deals.
* X6 s% u; n, c7 a6 \: Y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% { m4 i) t7 a4 v. ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# S% i! a' I, C5 Y% _ Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' e+ Y& K4 I9 {: u" Sbankruptcy, they already have debt financing in place.7 _' r0 S* p% x/ O1 W2 N9 v7 n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 U9 k' T/ Q1 V1 L1 j
today.$ r6 I- [8 u- s+ |7 n0 s/ \
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
E8 W" ?5 w4 Femerging markets have no problem with funding. |
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