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发表于 2011-9-17 13:16
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Current situation
" L4 Q/ i0 o) Y: W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 m/ [' ~- d' ?9 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, X1 g$ o' l+ _1 \2 K9 P7 G6 V! v5 Nimpose liquidation values.
6 U: W1 l! B' c# c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# T( s( [( t6 p& X5 a0 \
August, we said a credit shutdown was unlikely – we continue to hold that view.- |" t6 Q- s2 P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) F0 r0 h- Y8 W0 z( j/ Z" O2 Ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; |) R( T) r. k( v
8 t1 D" m' d2 ~4 v& v& ~. |
A look at credit markets
; q" R' F* |) ?/ x: y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! r9 g( }, l0 I5 H* L; E; h
September. Non-financial investment grade is the new safe haven.
+ B3 u- \1 x; O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% d7 Z6 k. Z1 a7 v# E) V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ D! @3 ~% c# {# o" Q6 xbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& x2 G7 Z" X" m3 ~ h, Xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# b; u, P; S: b) Y, k! s- rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are _) s* i7 ~& l& S0 A) V5 B
positive for the year-do-date, including high yield.4 S y8 S" {0 Z. I& K) c% h8 ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble U2 T! O- y. x9 b6 Z; b' i
finding financing.
4 ]; I* @5 w/ W& X1 r @/ A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 F% s9 _7 y( R
were subsequently repriced and placed. In the fall, there will be more deals.
3 @: G l: t( f, o( S5 V: H1 \ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
U0 n9 H; A7 j6 @7 `7 iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ Z6 }' b; e6 d9 U2 U/ f+ M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ ]. }$ K* j0 Pbankruptcy, they already have debt financing in place.
7 {1 r' K0 _' A1 ~; _* u1 L/ K6 I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 _& U& i j( O* k& t/ Ptoday.4 [0 X: W( x! q; `' P
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- ^0 M% i2 r! H2 Y! @ u$ E$ }" uemerging markets have no problem with funding. |
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