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发表于 2011-9-17 13:16
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Current situation( O, T6 j1 Q3 k! I$ l$ W' }9 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# C3 S; L3 U: U; U6 Q4 qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 m/ f- d2 a1 Z+ f8 r$ f
impose liquidation values.
) R8 t8 `9 x- @( q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% u @, {5 h4 Q& e- k
August, we said a credit shutdown was unlikely – we continue to hold that view.; E! g- V; U* b) v5 K: e# {9 u8 C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ A0 y/ ?" _$ y; C3 _. O1 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
0 `+ ~1 K3 q z, o Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' T5 a! a& V3 F; p$ U. L
September. Non-financial investment grade is the new safe haven.
4 r, D8 k: E' M8 h0 F2 D- I+ R4 u! v: ] High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! T- b& ~8 `5 S; L" j4 {then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- p3 q- c0 F1 z- C3 x& \3 d
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 v! I7 c/ o, o9 G. n8 J0 s6 v
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 y( b1 f& S9 s5 t: e! L& ?
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are S' M* [7 [# R
positive for the year-do-date, including high yield.& J. v+ S+ Q* ~* \4 v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: r8 ?3 }3 T9 ]- X( w6 K8 }finding financing.
" Y5 D9 ^: ^% h p8 x) M ]" a: p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 A( R0 J8 X: K* Q, G
were subsequently repriced and placed. In the fall, there will be more deals.2 G& g2 X8 G$ U& w! C, r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# e5 e8 p: I$ P; ~8 i# ? M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- ?9 B O1 m& [, z# wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! N: @ M/ M3 T$ }
bankruptcy, they already have debt financing in place.
, @6 R& F- a) y2 o2 v3 u9 J2 d! b: w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 X- m4 _4 G2 Y; hemerging markets have no problem with funding. |
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