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发表于 2011-9-17 13:16
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Current situation: e4 i( B4 K8 W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ K' f1 Y" y m) X) Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, u2 I& M. D5 h/ D' U& T: H
impose liquidation values./ u6 o: H/ o% y5 A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) X! P% t0 Y7 Q9 z5 }
August, we said a credit shutdown was unlikely – we continue to hold that view./ O, z- K% ?6 }* l2 H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 f/ g8 O9 z1 _/ r- M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ G" A3 F$ |2 a; B' H+ A
& ^: g7 l( ?0 q! R7 D9 @
A look at credit markets: X i' \, l u
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; W. H- P3 m5 N
September. Non-financial investment grade is the new safe haven.- X+ C+ Q- L& d- q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ ]" x! v8 V% U0 Y' K- d# k% T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ Y+ l. g% J3 B2 q+ w; F7 n4 x
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" \- e* ]. @) U3 ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* O, C& c3 U* K y$ P. @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 E! D( f9 X5 Z+ _ ]positive for the year-do-date, including high yield.
. A4 J4 t) b0 H: l0 u, o3 D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* C0 b# |' c, m, d( d9 J5 x
finding financing.
/ w7 g" Y: j# k. |5 B Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) |% ^' ~7 K$ K. }2 G# i
were subsequently repriced and placed. In the fall, there will be more deals.$ Y; I, l# d3 H3 ` O: L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ j: a7 j8 z! S. x" n# u
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) f T' ^8 R" P/ Ugoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 u! y3 a" |2 k
bankruptcy, they already have debt financing in place.0 ?! s: ^% |5 l
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 ^+ Z* S+ n2 K2 P8 Atoday.; O9 x: n& k" m. o* I m& @
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: a8 }9 M. l7 h9 F5 qemerging markets have no problem with funding. |
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