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发表于 2011-9-17 13:16
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Current situation r e0 |3 s( t9 W" O U4 t
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 M% }$ ?6 `4 G& c7 ^0 x3 N, jas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% z( f; j' V- i5 r) F( Ximpose liquidation values.! \( q! s4 T4 L1 N' ~- v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 [5 h/ U/ X+ k+ y. {: W, @" n+ I
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 C( o8 S) r e/ U! _6 C7 i/ { The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension g Q- G4 r3 y) W+ w+ K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
9 m) V' t5 s& m( t* e0 S
) J/ }1 N& y0 a$ y! wA look at credit markets
3 a( F2 L! B0 A7 f# I* H% x& I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" x9 S4 y# Z. e1 @* FSeptember. Non-financial investment grade is the new safe haven.0 h9 n: U5 e- j# k/ ~& M: j: V4 s
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# v0 t5 D6 |) b* T" C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, a" h& F* N4 W5 e v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# e6 n2 _ f( c/ Z$ g7 k! ~
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& t: h2 `$ e# J$ ]
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 N6 P6 i7 `" n0 @* N6 u; y! bpositive for the year-do-date, including high yield.
# p. m) a5 ?& W2 P2 A Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 s4 ~. X4 B1 [& H; Wfinding financing.
+ r: {- s6 u6 u5 X3 g Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 K6 z, j* z6 z! F" H# X
were subsequently repriced and placed. In the fall, there will be more deals.6 u4 b3 y& V: T0 \0 w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 z# c% t! V+ r8 E# c* T4 `3 V: H
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 T$ h1 h* j3 Y) E9 T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. v" {5 O& {$ L, K& l' ]
bankruptcy, they already have debt financing in place.
' v* ?2 J6 \3 f/ E: ]# b5 S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: c; |' b2 E P# gtoday.
1 x. o$ U4 B5 @3 N2 T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. R* N7 \. d" r2 ]) h
emerging markets have no problem with funding. |
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