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发表于 2011-9-17 13:16
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Current situation
" ]1 m% m- l) L ]* T; j3 M The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' t# S j; F8 H6 u6 _+ u
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, K4 _/ ~9 g) Q; }; z+ _0 Qimpose liquidation values.
. z4 c$ X- ^9 a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& r7 S! Q: V1 e- e
August, we said a credit shutdown was unlikely – we continue to hold that view.3 ~" i. U, z# y @) O) x- z; \1 I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ V3 `4 V1 X$ H" v' W4 a$ g" q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ |$ F4 [. C- i7 n& a- c
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A look at credit markets: L3 H1 k& S! ]- C7 h/ O" t# [! }$ d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) o1 G6 r7 x, BSeptember. Non-financial investment grade is the new safe haven.
. q1 s( k4 H4 @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' f: c2 Z% E2 d9 d, r/ Bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* ~1 c" p# w7 }1 B0 @) u9 V2 tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ O! L! [7 d. n8 z% g4 Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, @" [' r" |+ HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- j+ Q9 Y8 _9 c/ K# h- @positive for the year-do-date, including high yield.; [3 u: Y6 |) q: G; `* C
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
b9 v2 X/ {' E$ t8 c& H% Pfinding financing.' v, g8 \& l/ s
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 D3 z- y+ u+ p5 ?, Rwere subsequently repriced and placed. In the fall, there will be more deals.2 r/ r5 h' X( w( s
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 f6 z4 ]- w+ u7 ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 x6 S: l) b; M2 w8 ^( P
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 k) R1 D# {$ g- k( ~( [7 E8 N2 ]bankruptcy, they already have debt financing in place.
8 n: W) z6 O8 e" c6 w6 {# I# i European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; k# |" `, s+ |+ g6 T) G, q. X
today." z0 J+ n {" s/ M/ h8 u6 R i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" l# o n) x, l# p* f# x* v+ ^
emerging markets have no problem with funding. |
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