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发表于 2011-9-17 13:16
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Current situation$ D: c& a9 K* d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 t5 o) j! s; ?% C( m, l( z8 U% E
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; f0 i# U# h5 y0 Y: ^. G. \impose liquidation values.) c1 Z9 o( K: t) `/ A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* i6 Q" ?( P& H" _- v, z
August, we said a credit shutdown was unlikely – we continue to hold that view.3 U/ L7 F/ `1 ]+ K- j4 [! [
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 C" I4 ^5 O# u2 ?/ ?scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ H" e# [0 B) [2 ?5 z' ~% J) `
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A look at credit markets! X8 ]8 e$ Z8 x
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! I0 r; K! R. M* ^, T5 ~September. Non-financial investment grade is the new safe haven., N o& r; A( v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# J" Q2 c0 P) n" ~8 |* ?6 S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; @4 C& u' E0 l" n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; b$ Y0 u T9 b1 n0 C- W1 o
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# u a5 Q- B( C2 _$ S( _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! Q& y5 a% i9 E$ c+ j' M( f* j$ spositive for the year-do-date, including high yield.4 a! l: J: D( K7 {+ [" x2 X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 N8 ^# o [" lfinding financing.
9 J: r) j( P! ^' l+ D l0 C) _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they G% b2 D3 @3 x
were subsequently repriced and placed. In the fall, there will be more deals.
2 L2 m/ F- n. Q% E* ?5 V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) P- o O9 _* `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 l% m- V( y8 Y6 V X, O6 s' \# Ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( ~2 ]$ ~. p+ ^2 m3 m
bankruptcy, they already have debt financing in place.3 }, S! c3 G: k' }
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& A* p1 o) G& @! i
today.
: ~3 K) c& g0 M Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. `3 [( L" P2 z0 bemerging markets have no problem with funding. |
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