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发表于 2011-9-17 13:16
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Current situation
. A3 K9 f) J" S5 g9 ~/ D- J. V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! n6 l; X& a3 V+ p4 `- E3 kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' c) P. Q. h( C3 P
impose liquidation values.4 W5 E8 e7 N2 R" y% J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( _. d' V, v; B. u* \: YAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 t4 q* t+ s8 R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ X! a1 g# {5 c6 R6 B1 S5 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
, ?% E$ {8 o2 L2 K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# p7 f: E9 ]% w$ W( A% ~September. Non-financial investment grade is the new safe haven.+ v, c6 V9 s& g, b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 t K4 Q. f- l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) s) I/ ~6 _8 n: |0 r5 N3 H3 Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' e8 P: O1 w# n) m, p0 ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 [1 a# W- Y5 k- lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" ]/ }% G: f, t1 j: D$ }2 k# Kpositive for the year-do-date, including high yield.
: u3 j4 O/ [/ |9 H5 U Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ W9 w4 a& J; H# U
finding financing." a! c8 E/ J' L; }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. v4 ]; e% Y" l6 ], Z8 i% Nwere subsequently repriced and placed. In the fall, there will be more deals.7 }) N6 D1 c2 H+ f% m" g& w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ g! g; N% z3 Q( V' x ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! ]* X. L' Z' p, q, j& a$ egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 s6 U" u6 y& C" i# @
bankruptcy, they already have debt financing in place.: |& @6 {: l9 v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, n" p+ Y" P7 _/ qtoday.8 d2 U# X5 w9 K% | [
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in x }" a, W' W% D9 F
emerging markets have no problem with funding. |
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