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发表于 2011-9-17 13:16
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Current situation
% D/ A1 }, L8 O' c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ g3 e" l6 f. H+ [) j* R: Kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( ]# k M, F; N J; j
impose liquidation values.+ P3 k% {8 p4 z! N1 S, f: S
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# p; Y0 D) p! k! s) Q1 q
August, we said a credit shutdown was unlikely – we continue to hold that view.1 W& I+ A4 x' [* f1 Z1 R% X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! }6 e7 ^. v/ k- T6 Q2 Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets7 o" s. |4 D7 R% T: C4 s/ }0 u
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- S4 p; {- V4 \# H' s. v( ^
September. Non-financial investment grade is the new safe haven.! v8 R9 e3 H- a3 _% _; W, D
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ z# z! G( I+ T( B+ I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ n0 R2 M, o' s( _" obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have D" y- T2 N2 h, T9 B" k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ W( N+ I0 Z4 |8 v+ x, K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- q' v3 Q& \8 D1 ^# e: J
positive for the year-do-date, including high yield.
/ O; h) `& q% }5 W: ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' R% q. ^2 {9 A) M+ t( P
finding financing.+ {. Y# r6 Q) c: C! j
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) n; Z8 i; @& W. s, V% B5 Y
were subsequently repriced and placed. In the fall, there will be more deals." ~0 F2 o* T% j: V+ K; b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 C/ D' q& M) @/ C
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 J2 P% |) Q8 b& dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 r, K" ?( @* A# _6 m
bankruptcy, they already have debt financing in place.2 L( n: ~4 V% X4 {4 r _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 Z, b+ i9 e& r
today.
' C9 Z; ^4 A2 ~/ E3 \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# R) Q. [" K0 F+ z" J. Memerging markets have no problem with funding. |
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