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发表于 2011-9-17 13:16
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Current situation* u* K% B4 |4 l5 T. n5 T4 B' s
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# ^& J9 ~. E' A, z1 ?) `
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ q# u, J2 k3 a% c1 [" Himpose liquidation values.2 i# D: p4 r' U- D0 m: O+ W' {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ j1 \0 b3 @3 @6 Y7 C; Z
August, we said a credit shutdown was unlikely – we continue to hold that view.' P5 G% T- k# q( \ H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: Z3 n6 ~# h' }/ z5 N; s0 ?/ @& qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; Q7 T1 v! F. r& B; I. E" p& D m
. c6 G9 \- ^ |1 B) u+ X8 y) ~A look at credit markets
9 y4 n) O ?% m& K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# @5 m5 j& W; I4 m+ \September. Non-financial investment grade is the new safe haven.3 |0 n/ g$ }$ W& v5 W- L1 p* N: {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ L1 r& E+ r0 A5 E2 K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 D/ E6 N" b5 G" d1 N
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
x9 t- S# d6 Z0 L& _1 F( O$ qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 w7 Q4 p# Q: p* gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 w$ ?# t; o: \' m6 f. P8 e
positive for the year-do-date, including high yield.
9 K7 y$ P; e9 l1 \* ?. g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 J: T7 ]6 S9 V1 D' r/ F
finding financing.
9 r/ B, f% K; H C5 s% \ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' Q% C2 e- D9 H C- a9 W, D+ \& X
were subsequently repriced and placed. In the fall, there will be more deals.
N' M3 Y+ t& s x9 A5 @5 q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 d5 v4 O k. ^! n9 |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 d4 \5 X- P$ y% zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" c# C% G8 ]$ \) O2 s- `
bankruptcy, they already have debt financing in place.
' C R- V# x3 X6 t# Y6 |8 P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 J+ q& b6 M3 Y' m* i; A
today.$ n) r( r$ F, _( P9 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ K2 i7 v0 Y% t0 s' pemerging markets have no problem with funding. |
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