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发表于 2011-9-17 13:16
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Current situation
; j4 c8 y: W+ t/ i. } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 @, i/ w4 C. `as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ y2 f4 a9 R7 k3 ]- N2 s
impose liquidation values.
E6 a2 h* t# F, ]2 { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) S* h2 i: C2 }: D7 uAugust, we said a credit shutdown was unlikely – we continue to hold that view.8 }" f) n& O% p) f+ ?6 o2 w7 y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 I) I: N. \- nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 Q+ G* v2 E' ] N
- S% d! H/ M" I. uA look at credit markets) g! a" s9 v( N! K9 s4 @1 O/ |9 d7 D% h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- D/ j4 ] }( }- @
September. Non-financial investment grade is the new safe haven.* K7 M4 n _2 @5 |0 v) {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 l$ \- r. ?2 _* i& m- V8 Z/ J
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
y: e L/ f: Y( Y5 o5 J! P* qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 V" s) v" a% o/ R3 |+ vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- |- N+ ^( X+ G) F# {$ p, E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 z2 U& {0 W# P& X& `3 x% e8 i
positive for the year-do-date, including high yield.! \+ r9 B, ~! P; T& e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! b3 h8 ?. t5 w$ u0 n( Xfinding financing.2 a: S( ]7 G+ |2 F+ |& N8 W4 V+ x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. j( @" e+ L: B- Q) X& G
were subsequently repriced and placed. In the fall, there will be more deals.
1 L' x @' a" I" V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 ]( I# U# ]6 |" o' i8 J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 x$ M; ^0 a5 T2 |( v. @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: O8 v6 U/ M6 t# D8 g4 g
bankruptcy, they already have debt financing in place.& ^, q; X9 r: ~6 ]( `/ L/ z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. p# F0 n: e) _/ Gtoday.& n! p) [+ k9 Q/ z. _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 E( M& ]) C+ N
emerging markets have no problem with funding. |
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