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发表于 2011-9-17 13:16
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Current situation: A% d* z/ B' A
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 c' m% Y) X) u# [. tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! ]: {7 j5 y, a5 D) E
impose liquidation values.+ ^7 t- e' @. D
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) t* _- ?* W. ~, u, o" ~' t
August, we said a credit shutdown was unlikely – we continue to hold that view.# e* [5 R E& e5 x+ `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 r* H+ U2 T5 X3 gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# V4 }1 s! ^& R9 u3 e r
1 S' `' \9 u4 K4 l/ c$ ^A look at credit markets
2 ?; e+ m/ z* H" H" @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 d' t' I9 v8 U1 E: w& iSeptember. Non-financial investment grade is the new safe haven.
$ I5 [- ~* Y' J/ F* M5 ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 H' b1 D$ p; A6 r
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, h8 {: d y" K/ @7 ^
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 p1 \# H9 g7 M/ F0 m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, B% E1 a4 I! H; O7 ^CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 _( |( y2 I. Epositive for the year-do-date, including high yield.' q4 d( ?, D, k0 D& Z4 o7 y S- l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 i/ a$ s2 v E5 x5 B$ `5 @finding financing.( w9 e" X' |3 F! T! [' d ~. e$ q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, B" d: o- R; X. g; r. J+ U" p* J) h
were subsequently repriced and placed. In the fall, there will be more deals.8 q+ B- c6 _( j" }; M
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- b8 t0 y1 _1 e7 Z. {
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, G5 |7 W" [! A
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& g7 t$ d4 R& h' v# Wbankruptcy, they already have debt financing in place.0 x! j% g i' w- X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 _+ D9 l9 \& P( Y9 Ktoday.) ?+ M7 O: W$ N! o1 S& E
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 }& u( V* P/ C. Nemerging markets have no problem with funding. |
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