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发表于 2011-9-17 13:16
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Current situation
+ u7 f( w# B* w4 e v8 u4 u The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 S. H) Q( ^4 k5 M5 T( U" U
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! U) j' L+ O/ W$ T4 U Y/ [
impose liquidation values.9 }# C$ S% j4 r4 ~6 [: r; R# J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 K U8 j6 k1 ]1 _& G: d$ y# j
August, we said a credit shutdown was unlikely – we continue to hold that view./ O. k. ] A$ G8 Y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& U; g" @, e& e5 h: ]3 w
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' W- Z T+ U/ M/ r3 J2 B
8 T" X6 [# v* _$ L5 iA look at credit markets' W$ N2 L# y# y4 t; ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% F$ Z. ~$ p7 h5 X0 _7 ^. N" F2 [6 u
September. Non-financial investment grade is the new safe haven.
/ i% M- z6 j7 U8 X/ c0 v; L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ q. ~9 f) U5 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; [& {5 w+ }5 v$ G+ l' T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 h' n M* v- f. t5 F8 Y) n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( U5 I0 t5 h( c* c* p/ J# ZCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( j! o0 o+ e; }2 e, @# o+ `
positive for the year-do-date, including high yield.
% B9 t! Z; y0 e& D+ b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 U: [6 [5 u) T3 R- T) C5 `* m
finding financing.
4 h5 D5 Q6 A, V9 K9 d" @* v+ | Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" o5 x9 t, F8 P
were subsequently repriced and placed. In the fall, there will be more deals.! N3 P' V2 a2 h4 V2 h" g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. b% z o+ }1 b m M0 H* d, O1 _# }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; [5 i: a9 W) h: X5 f% h; x
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 w# C7 A% R' |/ @8 ]4 {bankruptcy, they already have debt financing in place.) S5 u, A% i- }* F, z0 |1 d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ D1 }4 ]% K6 w+ _$ Qtoday.5 `( q0 w! v ~6 D1 F0 q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. }9 N3 {/ G9 ~+ O9 `) H
emerging markets have no problem with funding. |
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