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发表于 2011-9-17 13:16
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Current situation
v$ a5 z; u. z4 F- s' T3 ]! ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" `7 T" N! n% p* ?# e2 ~% |$ ?as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 p, n* v$ `) \+ D' C7 b
impose liquidation values.1 T; {2 X: P% x" y8 ^, W, z: ?5 C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 C) c7 i- L& p1 ~0 b0 y% [August, we said a credit shutdown was unlikely – we continue to hold that view.
% f P, E, L# m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 k, K% a5 T1 H# Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ d; G$ S5 y5 U; r. {8 u
' x: E2 {" f! s) UA look at credit markets/ Y9 c$ j0 o# E5 g$ ?/ u
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* w0 B# w" e4 F! W7 O1 [September. Non-financial investment grade is the new safe haven.
( a1 R, l# s+ M9 v$ \% K6 M. ?3 D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 B7 j2 a4 t, Y/ ?# G Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, F0 O8 {$ @" p) }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 F* @7 X0 Y3 I! s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ a0 y# a" I2 s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! i6 \0 i! u }- ~% Z$ U
positive for the year-do-date, including high yield.4 c2 k9 T& G/ }. i! M$ ~; N9 {
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 ~, L" D0 O) v2 H+ h. @9 u
finding financing.
2 Y7 o" L* ~3 k0 ^. t* E ? x. b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 v3 Q! n5 O3 n4 ~' r c: lwere subsequently repriced and placed. In the fall, there will be more deals.
6 }; l' X/ j7 `8 ]: M' G" h, U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, d9 R' q0 ]9 y7 a
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were h; v' R5 [5 I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) C, L2 @$ x; i6 Rbankruptcy, they already have debt financing in place.
1 d9 a' G( b7 Q! c+ u* r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 p- A* d+ P$ X$ q$ E" i1 utoday.
3 u+ ^8 H, T0 |4 n/ p, A+ l Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. s9 R" b4 o0 F0 A0 O
emerging markets have no problem with funding. |
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