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发表于 2011-9-17 13:16
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Current situation8 L8 g' z$ \ F j) h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, _# Y# @: ^1 e6 V) \/ D
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( ]7 \* e6 T0 B% L! f7 s! l
impose liquidation values.
$ q e, `% J, ?6 h8 h( Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; p7 g& T; g9 A2 ~7 b9 U
August, we said a credit shutdown was unlikely – we continue to hold that view.3 M& x: j0 G1 s/ S, f: A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ W- u T1 U) Q4 i
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 }( K2 ^3 z# ~
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A look at credit markets
' k1 {( P' B) _7 U$ L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 n% n, K" t j4 L+ k1 N0 ~4 m
September. Non-financial investment grade is the new safe haven.
' a" u- w+ ]+ W: y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# b% n% L' o' }: _( @. c5 c# l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: p0 j& R( `' W& B2 ~; dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! }5 L: i: O& B% ]. S7 ]/ L1 [" laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
?# d3 F/ S1 L% E$ K2 TCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ k7 e9 I8 `% [( Xpositive for the year-do-date, including high yield.
& r {$ T4 k& X Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# D$ ^( R O7 ], s4 T4 e( lfinding financing.
+ b8 X3 `# G7 B! M, v2 \8 A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 X' h% s& V2 s; m; ~+ N- C
were subsequently repriced and placed. In the fall, there will be more deals.: d! J# l: u% j6 v# P0 q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& ?" j* E3 ~$ T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were y% V7 C$ B, n& |3 Q& w# e( `4 C" o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' C; g$ I* Q7 |: u3 ?7 m1 ?bankruptcy, they already have debt financing in place.
3 J7 z; f" H& |. x, p6 D, }' | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
M! d r3 v. J( `today.
' X' B$ r9 e7 w. \: m d- E Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 _+ J$ j& O4 M% D
emerging markets have no problem with funding. |
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