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发表于 2011-9-17 13:16
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Current situation: w0 @' S8 e) F3 e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 K9 v8 B7 R: n" n/ R+ B8 L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 L+ R9 c3 a3 B' Q& R- z6 _( Himpose liquidation values.
3 F" e3 p3 {+ S3 @ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& n+ Z# C% S2 K; ^8 z2 _August, we said a credit shutdown was unlikely – we continue to hold that view.
7 _# u: V; n3 D5 x" G: ^ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: o: h3 L" \# f9 E1 a# W3 ?5 Q- L1 Mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 K7 N4 A/ P' S$ {3 w4 `# G5 w
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A look at credit markets1 F/ H% d' z, _5 F; ~, J" p
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* Z- V g. V7 f/ e4 s5 a
September. Non-financial investment grade is the new safe haven.: p/ s7 X* |+ e. K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! o2 M N- s+ D: l |
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. G5 d( Z& J* }- ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* B) I. c, X% _, q/ V; E/ Z
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* t- b+ A1 V6 X. b/ l# G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are C) Y" v. v; y$ I
positive for the year-do-date, including high yield.: W" c5 L! v5 w1 o+ I8 _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 E7 u) e4 H0 h# \% e* P$ k
finding financing.( K: m' T& Y+ A" f; u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 P( F* T+ A, M4 ?/ e' lwere subsequently repriced and placed. In the fall, there will be more deals.
+ s0 _1 D$ Y0 E( ]$ l V/ h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ O4 ]8 u" ]0 y: Q, K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. L* n7 `- `) l- V( q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) z7 r- q2 X* m/ C- Q
bankruptcy, they already have debt financing in place.- X/ @. H: t8 |0 u& j6 t, X' \9 f
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' s) L/ ?& }, ~1 Z8 R: n! y, otoday.
, K7 F. r# s- n* W3 s" F6 } Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# u$ f# o+ S( b
emerging markets have no problem with funding. |
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