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发表于 2011-9-17 13:16
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Current situation/ Q' X% r, R$ @0 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 l% @4 J2 x% S" k1 a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) M% j. J6 k* D, P9 Z# A
impose liquidation values.
5 O0 h9 S. H9 z9 g4 R# p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 Z/ A7 e) D) b2 U$ ^: A- R
August, we said a credit shutdown was unlikely – we continue to hold that view.) Y! U. _' P/ m: |( D9 P5 b) S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ j5 d4 n0 p# k- v
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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/ U6 e; V7 J1 x7 ~A look at credit markets c0 f* `& k* ^% F f8 y" ?
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 a+ W& F, w2 T& ]September. Non-financial investment grade is the new safe haven.
/ y* A2 C& J- c: u High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 ]3 q( u, P! a, [* }+ r# C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' A7 y7 h3 [' S. A! s6 x
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& c4 G; G F" @
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 J3 C$ B$ R$ ]8 T7 h8 nCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 A# Y, G9 w, c) j' P
positive for the year-do-date, including high yield.
& @4 ?3 Z. M! T' y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 D/ n1 M8 Q0 r( u2 m, e( l
finding financing.1 L4 o" P. N% f. c# c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- o) p8 s/ u' C1 t" T, T4 j; B
were subsequently repriced and placed. In the fall, there will be more deals.6 s& q p8 t3 m2 {* y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. M+ d3 B8 `& Y: Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; K. K1 w4 l0 ?: ]$ V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) t6 \ G$ m! C4 [: F7 B" D! i
bankruptcy, they already have debt financing in place.+ b/ I# }4 g9 t `+ _/ T3 ]
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; n" x% F- i+ v3 @. T/ A. ^% a
today.4 h- P3 _& l6 p9 n$ ~# N* M+ g
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in X% T, h# i! X1 f( P
emerging markets have no problem with funding. |
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