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发表于 2011-9-17 13:16
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Current situation
7 \7 Y" j: K5 C# M0 w) t: _4 T7 c: A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 B/ j. I* q( ^" E
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 V" I% V1 {; H. `9 p
impose liquidation values.
- b% P) K7 X6 N. f2 u' r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. N6 n! \: n) X# g8 h+ wAugust, we said a credit shutdown was unlikely – we continue to hold that view.! e% k/ l+ u8 D) b5 [4 d: A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 [" }' b# D2 s- Yscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& o- V2 c, r% c( h' N( DA look at credit markets3 l- w9 j, N I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; @. [8 F& i! M! W/ ?( W+ s
September. Non-financial investment grade is the new safe haven.
# \8 G7 f" }- r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 v/ V* e& V( F5 t) l, G& S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 \5 V% G4 |1 ^8 y6 ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
F6 N( f% T; b" Yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. D$ k5 L& U- _4 s" H3 A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 i) }1 g, }8 T' J; c* L
positive for the year-do-date, including high yield.
6 O8 z2 ^7 M' G# a V3 N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble \( \. p5 T$ R6 ?/ F
finding financing.
" ?6 c5 G, M" \0 {2 Y" D, K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! w/ V8 q+ o9 y
were subsequently repriced and placed. In the fall, there will be more deals.2 d7 c- P! w @$ ]1 [& k$ U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- I5 M( {9 Q+ {) T& A% J" s" r1 A& s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! _/ R& ? c) y. I0 B. B& B& v; Cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; N, s5 Z6 T! u; u3 [( b" w) F
bankruptcy, they already have debt financing in place.$ G0 X7 [9 r4 G8 Q, u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, ?3 A$ v" u, J6 D: @+ H8 F4 a
today.
1 _: e. [5 x' T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( C0 k" N( \$ u
emerging markets have no problem with funding. |
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