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发表于 2011-9-17 13:16
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Current situation: i; @! R: {) D! i5 x+ Y( L. v$ ^
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 ?% s# H3 _5 w) M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! e! G) e1 g9 H& U0 |
impose liquidation values.
; i7 a1 ]+ b7 q6 v# k1 l5 t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 D7 `9 A6 R: M5 K. o! lAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 H7 g: `) p! \: [
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# B% H; u- v. n4 k- o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. k% }: x7 Q8 C+ k8 _6 C) @
+ N" W+ H1 }! T' Z- _- ?5 W
A look at credit markets) _1 y- @; Y+ @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# R2 D! y N9 H2 j; i# T* ]2 y9 n# CSeptember. Non-financial investment grade is the new safe haven.
% ?3 Q4 z& y( z2 W$ c0 v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- B' K! d2 |2 G+ x+ Ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 d" q* r9 r, O: G! v! Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ k0 N8 Z' C2 G; q; i6 ~* Haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 z$ M! ?/ J' S
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 c7 W0 j, @, v$ l$ w: t/ i
positive for the year-do-date, including high yield.
% p4 K, d5 S; i4 x; ~ h% F Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 }" r# G7 G+ u2 Q
finding financing.9 Q O- q5 _( c0 t; M3 _6 v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 J0 E0 c8 D# @
were subsequently repriced and placed. In the fall, there will be more deals.# W" Y8 |# e, k8 k" X5 J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. C- _. r0 l/ X6 n6 t" v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 M" A" b. u, p5 } Lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 G# D" J7 O4 Qbankruptcy, they already have debt financing in place.- Q" B5 v: ?9 v; S- h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 Z( r H% e8 W$ j; Z$ q# {today.
5 c6 p4 U1 {" H+ Y' c0 h+ K3 V$ h# N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in B' W/ a+ b1 g2 U2 a
emerging markets have no problem with funding. |
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