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发表于 2011-9-17 13:16
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Current situation. s4 M9 d( ~: C4 w( V6 B+ \
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" N( L; }* b( v- E- Y# _" y4 B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( u" `& w, X( h2 O6 P! I
impose liquidation values., J8 \$ V' g5 S4 F- j
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( ?" }. `3 ~$ wAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ F- A& ~1 U. x The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! Y; X4 e/ y5 ]+ w5 I% j6 t* P
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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" A8 N4 A4 Z% \1 _5 s( }& X9 GA look at credit markets
. Q0 t# `# G& h; Y' q9 S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ r4 g1 Z2 b' D2 Y) C
September. Non-financial investment grade is the new safe haven.
7 p, t+ C+ U A7 I& m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' U7 B. S, r3 C6 x+ J
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 G: W7 C: w% a* Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ `5 K* x* z; v
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' X2 E0 c9 Q& d/ w& W6 W- _CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 `4 N6 n; ~! G8 Y
positive for the year-do-date, including high yield.1 Y# z" |* P' Z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% ?2 Z! x: P, d0 A0 q7 O: G
finding financing.6 R) m. p: M( h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- J0 a1 l2 y/ g' f2 }1 ?) G! }were subsequently repriced and placed. In the fall, there will be more deals.. }; ?1 `. z) j9 {$ P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, ]4 o& E2 h% h7 q& |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- M' m! i( p ?7 N3 b& b# a! ?4 egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ Z! H) N/ i6 n- Kbankruptcy, they already have debt financing in place.
6 I# L$ H, w0 T. N European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ [- |1 L1 l7 q1 B/ b
today.
9 p3 m- G, n8 M; Y% v! R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& y, C4 G6 \$ j/ T3 h6 S6 o3 w( jemerging markets have no problem with funding. |
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