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发表于 2011-9-17 13:16
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Current situation
, a+ M% d2 P& t6 N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, O3 e2 a& s! U+ B" a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( Z$ K9 Q" \/ I8 w" W' [# nimpose liquidation values.
) i4 f" | @/ B4 h \, ~ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- e8 ^* `0 ]9 s9 \1 J2 LAugust, we said a credit shutdown was unlikely – we continue to hold that view.! ~: h0 C/ I, @% n8 M
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# \) F6 N) O. H3 { {; s
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 J. o$ B6 Y. v/ T4 j7 l* Q
, X" y6 g* `3 nA look at credit markets% k; L$ v, N( E9 y) q1 B* z! }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
p) ^1 Q6 h9 l9 @- b3 ySeptember. Non-financial investment grade is the new safe haven.
; Q) s: X6 ~1 U- k2 d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 k# C+ C. }9 i- d, ]
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* @3 P4 N- J3 m) ^, v: ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- Z( d( S! c- @6 u
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: w4 y" L Y U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 X I8 ~ l4 Z
positive for the year-do-date, including high yield., U/ Y& I5 r, J. G; c& ]0 b2 o- s N
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' l8 a! k X9 n# L6 p
finding financing.
1 g) j$ J( `! b; i5 q/ @/ B Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- n( f1 c3 Q" ]' }& _5 f* Y4 Ewere subsequently repriced and placed. In the fall, there will be more deals.
% `! N& M9 U8 f4 c: G0 N! B Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 r7 p+ w) _) ^2 sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, E) a! J7 }& i% y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" B( N0 t1 ~ h! ^1 u+ tbankruptcy, they already have debt financing in place.0 l1 B" {1 ~) n2 N9 O# Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 |, j# d! H( ~3 g7 _' ?1 l w
today.8 {. M& E- A! u! O9 s l0 I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- V; J4 ~) h3 D
emerging markets have no problem with funding. |
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