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发表于 2011-9-17 13:16
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Current situation
/ W: K* v R" J T' {( _+ h1 { The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# @. v0 K' V" a9 k) B) z3 a, ~6 L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ g. P ^/ K& h) i/ s4 U8 w3 Nimpose liquidation values.! s# A& O+ c3 L3 A7 S8 s
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, K9 G8 m( ?2 U3 ?5 H
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 {* ]: h) j0 {0 U F0 j The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ O% W0 f( O0 ?. {1 y3 a9 Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 o+ G0 c$ q" ?3 E5 | ]) f# @' mA look at credit markets0 m1 T/ ~ R: [
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 O( K3 E, q# E% ~4 i( cSeptember. Non-financial investment grade is the new safe haven.& M+ `- ]. z: @& N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 m" k8 N: ^) d2 x
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 d9 ?( `4 S3 e: V, p; O7 d6 Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& b: O% _0 h+ ]& V5 R: A: ^$ Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade N4 Z6 D$ z# }3 k0 h# `6 u' K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 |. I5 D3 Y: _% Z" i
positive for the year-do-date, including high yield.; j/ {& j/ W w- {' R$ i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 v5 i- u- ~, ] I! E* U
finding financing.* s- V) y. n v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they C% l3 e, Q& N: {1 a, W
were subsequently repriced and placed. In the fall, there will be more deals.
; h" E% t2 |+ H- K8 S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 ^3 _3 j0 m. p: D9 x- b, _2 h
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were3 i; s! o& p( t+ k: a- T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 K$ b- N5 C% R# N! s+ y
bankruptcy, they already have debt financing in place.: C3 j, P/ @% l# z8 Y* _& h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 o( w/ F2 ?6 a5 w$ jtoday.
8 R; e3 q' B8 U S% I5 O# k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 K- {7 b7 g! K4 ~$ y* Bemerging markets have no problem with funding. |
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