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发表于 2011-9-17 13:16
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Current situation9 D x6 R! P# _; R5 J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 J: `, x+ D1 Z# s, i5 ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 m" `# E% L! C
impose liquidation values.
. j% P }9 }& Z, K, t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ ]" O# B4 i* ]/ i* W1 G$ z/ V4 |
August, we said a credit shutdown was unlikely – we continue to hold that view.
# X0 H7 Q0 J# g% k& I" F+ j% e, q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* B5 L; U/ B6 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets/ X5 y' B% r: B$ S* d* ], T. |
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ I/ C$ ^+ n7 r" T- {) X' vSeptember. Non-financial investment grade is the new safe haven.
" _8 ^, e3 C6 b$ B6 w High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ D# P6 @" G% O5 l. D. P }1 v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- v2 q. M! w0 J( {: G" T+ }4 Nbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! `- z6 o& h. E5 H) \access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; W. a+ k! y% M1 D) E$ ]! x. Q$ X: \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 Z! W$ ~5 f- vpositive for the year-do-date, including high yield.' S% r: w0 d( p2 V( ^, `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble R7 M6 W8 W; }7 N1 [. T M
finding financing.
! g ?( {6 C. h9 p. u Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& k! Y( I4 [7 |! d# w
were subsequently repriced and placed. In the fall, there will be more deals.. u& C* Y; p: Q* ]7 P& ]* s2 V$ x/ I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 ~0 i9 S/ D. }* l9 s. His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 b+ F, b; A, F& y. d6 o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
r v( ?# I& g, T: z" c- `, C; vbankruptcy, they already have debt financing in place.
2 a+ T$ a: e. Z8 a$ n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( T+ E. F0 c6 l7 ]5 ctoday.
& d! E5 o) o# b8 U- T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 m& n3 Y. A8 d' `) demerging markets have no problem with funding. |
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