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发表于 2011-9-17 13:16
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Current situation
9 s1 a4 l5 S" g1 @9 P' @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 Y- ^" ^0 J. p: V4 |" F4 s6 C4 _
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. z) C: N0 g0 C7 s% F4 D8 V
impose liquidation values.
o3 W2 T* w* g$ D1 p" \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ P0 U- N! x& i4 C4 V9 o5 O9 S
August, we said a credit shutdown was unlikely – we continue to hold that view.; J2 i$ q1 c/ l3 v0 H+ E2 @
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 D+ K! k. v6 J8 t mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ o3 T+ B* W& {! pA look at credit markets
6 E4 t" U j1 b5 C' f/ f6 Z! z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* I5 A6 i# p4 h0 X2 p
September. Non-financial investment grade is the new safe haven.
$ k/ I- h' X6 }; z# D+ C High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* T' R' _# Q3 D3 I4 uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ q) m' q* c! Z, }% q3 l0 u# T5 Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- V! a9 i! X# }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ S& u* s4 {0 t- ?% g1 ~+ @CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ C: B1 ]/ X7 k7 t2 `8 n& S
positive for the year-do-date, including high yield.. [$ R; ?( s1 k9 |, t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 \. H4 v" |( l* X8 H; L$ a/ X3 j
finding financing.- V( c. h7 @9 Z! c& }8 U4 J# V( j2 {2 O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! b; A* O- `* l6 N8 U3 q" ?were subsequently repriced and placed. In the fall, there will be more deals.* f' s: ]6 c. I3 R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 U& A# G& R, s% n% Uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" }6 \/ M- @7 F5 G) z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 K: o, y# a4 ybankruptcy, they already have debt financing in place.. c+ z6 p* e% n' Q& d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 U8 g, r2 p7 ~% P6 {0 `& n
today.+ S( \) |& r( X: Y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 F9 I9 |" a4 Temerging markets have no problem with funding. |
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