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发表于 2011-9-17 13:16
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Current situation* g; i4 O6 v, f3 ^/ Q& f7 Z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 B7 \4 [+ y. L% k# F% l
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 @* E& q' ~! z4 |9 g& Aimpose liquidation values.
7 F* o6 N. ^( }4 s% [2 b: T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ G }2 j: A; P9 g# f/ V, R+ Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
* G4 l: X7 O! D9 Z8 f The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. z4 q8 _0 |' {* i) [- t
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
Z3 C2 H5 e/ }( W; O) c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, X- x) i2 U! m% D, @% b" L9 m2 y' WSeptember. Non-financial investment grade is the new safe haven.
* h% X; R, Q5 p! | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" ^( ?% h; s- f; V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ l/ i: C7 L$ G/ l% W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
5 P& D! p2 @5 A8 R& A# a3 qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ n# |0 Q1 ^2 Q0 d1 ECCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 U7 K2 e& z4 U I' o' D0 Y$ E
positive for the year-do-date, including high yield.
& [5 \8 ?7 y' h; @$ | Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* M' n) ~0 h" ^4 C$ N9 {
finding financing.
6 E6 V% r1 v% n, E8 ~& \& f. h# B; k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 s: V/ r, m7 L% c# _# c4 s) C
were subsequently repriced and placed. In the fall, there will be more deals.
9 [! y# s2 J( r; f Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 O& i, v) @2 j/ |6 @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! c$ U E+ X' m/ O! g: ?. Lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: O" }2 @6 K; Rbankruptcy, they already have debt financing in place.- \, h5 N" y% m! q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& ~- M( _: d V$ ^- B0 Jtoday.- L* T) m# T8 ^) }9 p5 R7 e
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; C- T. t# n8 k3 pemerging markets have no problem with funding. |
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