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发表于 2011-9-17 13:16
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Current situation
: u' F5 _- K* r+ T* a+ O The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 {7 \: o( V, | S# |
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& v6 H' y& {6 | B# ?impose liquidation values.$ W- E( B ~- p/ \, I; h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ ^, O: O2 S2 m7 AAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 E/ O! @* h3 w. k7 P2 A8 k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 z, F: t1 o: K, vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
; [8 n( L" M7 v0 A. R v/ ? s" n& ]! o2 ]
A look at credit markets- ^9 |9 A! I$ y6 ?6 u8 G* o; z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 B- D0 e9 a5 ESeptember. Non-financial investment grade is the new safe haven.
M+ T9 z$ N- M; a" b1 V High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 @8 w# ]: n/ B5 c
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& k0 k( L* x, |3 p w! G/ n' pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" @; q+ Z& v+ ]$ k8 x9 v
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 c& R, [, ] ^3 u; e
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% A$ ^+ e6 e1 ]- y5 ^# ?positive for the year-do-date, including high yield.! f* K9 a/ Q5 I; Q+ z6 }6 s
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 T A; [. U1 d( Ifinding financing.
& I# Z+ r; P0 `( Q1 r: G* r Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* y. a5 V) u0 X5 H9 kwere subsequently repriced and placed. In the fall, there will be more deals.
4 S# P# t, Z! v/ s0 u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- z6 J, J! k" G( v+ W5 L3 uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; |1 C' F( E9 X/ xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
O ^- G! y( {1 e% S1 v; |8 @1 Mbankruptcy, they already have debt financing in place.
* R; Q1 w2 {# w2 Q, e0 B European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 H% g# M& {/ c$ r% K! i; U9 u
today.: r5 o; A, \& t0 O
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 i, X+ D# z1 C' {4 J& zemerging markets have no problem with funding. |
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