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发表于 2011-9-17 13:16
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Current situation
/ |. K, B( M5 a6 h, A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; B" k4 Z# c8 w! H8 O$ v9 x5 _
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, {* S9 F. U' ~5 ^, ]6 zimpose liquidation values.
# q8 `5 ^ q3 B1 } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ F9 I9 D* g1 E( {3 a
August, we said a credit shutdown was unlikely – we continue to hold that view.
$ d+ S7 S" G+ n$ i2 K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, R; H% d' g: `# A8 j
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& u$ r/ R3 Z7 s
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A look at credit markets
: t( v7 N- S7 f" y+ ^8 ^' y" X! r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; @; c0 O# V( C: @7 dSeptember. Non-financial investment grade is the new safe haven. h! D, c; f' H: g7 v- d
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 w" {2 f, Z& k
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- j0 [, r G4 b) |7 H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- L4 i' W6 X c" a8 _2 qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ r$ ]2 F+ p5 a# B, J1 B/ S
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: M1 @4 c+ s: f: ^positive for the year-do-date, including high yield.! K8 b9 R: ] B/ e ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ ^4 m( g! Q, N q5 C/ u
finding financing.+ i* y* F$ i/ K3 @
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. u0 \* y0 p: \1 e! A
were subsequently repriced and placed. In the fall, there will be more deals.
( }$ G3 B& d i7 P! z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 I! ]3 |& R9 |. e1 L
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' x: K9 P) S5 H Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 V s/ R2 [+ p2 O" C/ G& E
bankruptcy, they already have debt financing in place.
- h3 u+ ~* R8 D. J* c F European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# x; q. L1 x, T; @% D# G" E. z7 I
today.
& l3 |2 C& H4 D" { Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, A5 C! f2 {; E. d% z1 T; Nemerging markets have no problem with funding. |
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