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发表于 2011-9-17 13:16
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Current situation
& ]) l* D& Q: D n; G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% J( |; j A6 N) C3 p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: r5 C; a: E9 w! `6 Z
impose liquidation values.
" U+ O. {* {/ Z5 S. j In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 Q; ]9 ] H- {4 B) pAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: e5 x' K$ t+ o3 T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" i9 n0 d3 ] |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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! G2 N5 Z" k) V, LA look at credit markets2 P# \ M9 L( g/ f1 T$ s
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in W: ^ T& k; [# p5 W/ R/ k
September. Non-financial investment grade is the new safe haven.+ W6 l$ M0 r0 d1 [3 t9 p
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. g$ |! l7 i5 g$ g4 |( uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" _ [; ?" { X K% F7 |: s" z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' K9 d, f/ W v' D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 h; m7 y& f* { R J$ ^CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( l' I/ i/ d+ ^6 e" i0 J
positive for the year-do-date, including high yield.! @1 ?; g. n; ] u1 ^; e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! [! y/ @; X! Y; y/ V* [finding financing./ N& R) Q$ q4 k2 I' y) k2 p
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 q7 ] O" r- Q5 y
were subsequently repriced and placed. In the fall, there will be more deals.
; @+ y w5 X4 R- r8 d Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, l2 q" E+ c4 @2 Y- B7 Q2 }% E
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: h* g% g0 `+ \) p+ }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; e* S! O, Y6 l0 G% |4 \bankruptcy, they already have debt financing in place./ V+ S4 b3 A6 u! G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 p: V5 U& c$ {3 E0 ztoday.
7 {% k2 U) B' J* F# ^7 E5 s Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, W5 J6 p6 L& U9 [4 Q/ Demerging markets have no problem with funding. |
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