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发表于 2011-9-17 13:16
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Current situation
, ^0 J, l8 J) u1 q- h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ s: ]% {) w* J. V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 t5 M. M* T1 L5 S0 D, W# t; Z0 Pimpose liquidation values.
$ f2 J5 d! n- T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 E3 \) h; i6 U) h5 [
August, we said a credit shutdown was unlikely – we continue to hold that view.
( s$ g3 l* Q0 V4 P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 x' b, M, X2 l- t; Y( h8 T8 x
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets5 K: n/ J6 J' c
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- n- o9 Y) O6 _$ `/ M
September. Non-financial investment grade is the new safe haven.
3 Y% H0 z, F8 S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ Q, u. Q+ Q }/ s3 @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ ?: E6 f- x9 P4 d8 ~) _
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 b/ |. ^2 M9 Daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
z( O5 f, G1 k* w6 ~CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' i& ]2 R7 p Rpositive for the year-do-date, including high yield.& v9 ^9 \) W1 U8 l$ q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 u' D2 j- A$ afinding financing.
9 s% m- K% u$ \" I8 L* u8 j+ `2 ]6 x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 B* e1 `( y* I1 G/ @were subsequently repriced and placed. In the fall, there will be more deals.
: W1 i8 L1 Y4 C7 Z1 ?7 {+ y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ W- n6 ~0 l N V5 y. M9 d \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% s+ ]7 n* ?6 C' [, E# w( J& x
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. w0 |6 W) \1 T( R! M) Nbankruptcy, they already have debt financing in place.8 V. w1 `5 L' t$ d/ M- H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; Z$ ]5 X8 h. v( Y; m Q1 mtoday.3 b1 s( B& h' J$ k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* w" L% H+ Z9 V5 J femerging markets have no problem with funding. |
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