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发表于 2011-9-17 13:16
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Current situation
7 r' A) c. u3 u4 O9 B, p7 E2 h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 x' J' B4 I& F9 L& E! M$ G w* B% d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 ^* N+ B6 n R* Oimpose liquidation values.5 p+ S1 L+ e% q' }5 B9 S
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. [5 Q% Q3 m( a. r+ QAugust, we said a credit shutdown was unlikely – we continue to hold that view." U0 [, K( x( @% p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* r: Q) Z- H& b* M3 w* o0 s3 qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% f1 u9 [/ u' J: h! Z
; |7 K, o- u5 b0 QA look at credit markets
* ?" h7 `, s8 w) B7 T8 x0 J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 @1 M1 L" ]3 B0 Z
September. Non-financial investment grade is the new safe haven.% T& J# b3 b9 c0 F+ D
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" H1 F7 w5 g9 gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" h; l" B+ A4 r4 Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% P% a+ F6 {; r: B0 l! B! |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* q; P# i4 S/ U% d |CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 F' X s1 Z" A5 ?$ t! B" M6 m- x7 hpositive for the year-do-date, including high yield.
4 t/ X; T3 B2 p5 y' h; N) C Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% E2 _$ _& E* c* c5 N
finding financing.; i9 J* h" c8 y/ d/ W
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' g( B' A- }6 V& S' Q3 xwere subsequently repriced and placed. In the fall, there will be more deals.
* C- Y/ }9 L5 y: R1 Q+ z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& F6 Z: [1 V% u& u1 e- o9 T' M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- M Q* P* u$ c9 w9 r D! ^! w5 I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 L. \4 m4 B2 {& H- \# u6 t" zbankruptcy, they already have debt financing in place.
! W. G1 L6 j% \* M4 F European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, Y |2 w1 x+ c
today.
) S! A9 Q) V2 `3 {# L& d3 k4 r \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" t% g' l" g9 b# z' Iemerging markets have no problem with funding. |
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