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发表于 2011-9-17 13:16
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Current situation1 u- ]: z" H' V! `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 D/ ?$ B2 F) T* D3 w* D9 tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# O- V$ r# E& K, b9 Iimpose liquidation values.5 B5 b4 i+ l- k6 ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 D3 |; G6 x% l9 q8 C# t
August, we said a credit shutdown was unlikely – we continue to hold that view.( V( z* R/ B6 l) _8 p( l, R! O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ S2 O. ]$ M3 ?& k: Y% P! e r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
& K M& s0 o+ W' E) M. r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 }. N' l$ x2 ^) S
September. Non-financial investment grade is the new safe haven.
' [, K# C, b+ E1 ^% | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ @- O$ d" s) }: B& |7 N( gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( V ~, D& h- M8 r; q$ K4 t. W; O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! p1 a+ y; H2 c: c
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 K6 J* W7 X( F6 y/ c8 h
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 e: H4 o8 w( Z6 R/ o
positive for the year-do-date, including high yield.
0 z2 n3 J7 g, J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 ?3 Q) w# S3 A% z. s1 s0 }- x: D5 m
finding financing.# s% ~3 y8 [/ T/ U# [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- g9 W! G/ Q5 c- h0 x. zwere subsequently repriced and placed. In the fall, there will be more deals.$ {7 }" |: Z' `: `; p6 A
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, F3 D5 ^. }" O, K$ I9 \/ D4 f5 K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 i% u5 Q% e/ D" Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, f f1 L: Z/ I% ^+ A) B9 B$ C
bankruptcy, they already have debt financing in place.2 H }( H7 @7 G. w& G# U$ d5 E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 W4 \' S8 r$ K; C8 W/ Y& Q
today.
& y& L* q: v! [& ~0 z: E3 V) u8 ? Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% F5 F+ k9 Z9 N) \
emerging markets have no problem with funding. |
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