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发表于 2011-9-17 13:16
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Current situation! y$ ?1 n' j4 g* A9 @: f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ o9 P( H/ m6 ?$ w3 ^/ W7 O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ z2 i" h4 ~5 @- _impose liquidation values.
, w% H1 I2 X2 b+ j" q" q0 K; G In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In W: C7 R% w+ v+ R
August, we said a credit shutdown was unlikely – we continue to hold that view.
3 Q$ p! u3 x* ] The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; V% w! b' y& d8 Q8 v) \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ a- C- ~0 T F3 B) x" A, y/ T
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A look at credit markets
2 Y! i% _' w+ g# J0 V4 m$ ~8 d Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 y u$ t! g* BSeptember. Non-financial investment grade is the new safe haven.3 J0 c, Q3 L8 n9 X' W, b9 \
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; {1 A7 r6 Q. k& tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. _ n8 M. D- c$ l: T1 W3 u. s
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 c* a" c4 @% Q/ W5 L4 eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 y+ t0 N( r8 U+ u5 a) W6 |% yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ L" ]4 f' ?( S; v" u3 Vpositive for the year-do-date, including high yield.; y$ p& E( ]4 ~" D: e6 I3 i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% F1 P7 J4 B/ O) V! K& ?9 ? ~
finding financing.
( y. w0 w* y1 s' _7 l3 b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, z3 d3 B2 T) C# Y
were subsequently repriced and placed. In the fall, there will be more deals.% i/ b% l0 \! g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, J: [- L: S" e2 T' v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, a5 ]. N# W+ n- O0 w7 @4 C$ q4 r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( v" x# E1 X& p1 r: @+ V- s7 a0 \bankruptcy, they already have debt financing in place.9 G6 q5 [% G# E, N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ q" ?% A ]8 @$ A& V( ^& b& ztoday.
( a+ k0 n, @4 `, f# `. E3 U9 \ G Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* F5 p; p2 W2 \. e, C: b
emerging markets have no problem with funding. |
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