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发表于 2011-9-17 13:16
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Current situation5 } b" D) K( H# A/ j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) q' L& l0 F8 J0 T! O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: h" _/ `5 H* T' }
impose liquidation values.
) a/ a) ?5 o$ S/ ? In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 l T6 }8 q7 [+ V% _
August, we said a credit shutdown was unlikely – we continue to hold that view.1 Y% m$ E$ K. U, ~1 M
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; c* X9 c7 k& A! [& p! Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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/ }% ^3 y, ]& t! W7 \2 B) xA look at credit markets
; X; m8 \+ j7 |9 S% @' H" Q! ]: z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# Z* B- Y- T4 Y
September. Non-financial investment grade is the new safe haven.
. E/ n# F4 [ `5 ^ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ t1 ^, E0 b8 \9 W9 V4 @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ N g& G' ~3 @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: u( Y, n2 I/ a; O2 N4 [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 | x6 P: v/ k5 a. z$ hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 k# A9 u" a; ?0 m1 |2 T
positive for the year-do-date, including high yield.: l/ @) X# J* @+ C
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ i7 I9 T! f2 T% ?0 o* q9 X8 Yfinding financing.) h' l3 m' Z. l2 ~' J/ @0 O' `& ^7 [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# h8 ]0 O2 A6 _8 d( n6 P' V
were subsequently repriced and placed. In the fall, there will be more deals.
, X q# X t1 R% e9 I" {' [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 L6 c4 J R9 x" mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, ?* B) Y6 ^# v, C, ]/ n7 g( Igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; c! J. M7 l. O R/ J$ i- wbankruptcy, they already have debt financing in place." Z+ a- t, f# G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 o/ y/ b4 v8 \7 G8 f1 j8 A; r
today.
3 Q% v0 A5 I6 L/ ~8 `7 t+ s0 J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& J. s' R ?0 y, o0 B/ L
emerging markets have no problem with funding. |
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