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发表于 2011-9-17 13:16
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Current situation
9 E) r& X' m$ @& |: U, E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" g" X2 i3 z" {: m+ x2 [" ?
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& B; F7 i. @: d( Q/ yimpose liquidation values.
: L/ V6 [, h& T8 |& y3 \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& s( H2 b3 ]8 L1 N1 p4 Q* `August, we said a credit shutdown was unlikely – we continue to hold that view.5 F2 R0 |1 E. `- z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& ~# h& w* J. r1 y- P# qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( R2 r& B1 p5 ]1 k$ u
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A look at credit markets
" h t+ ]2 ?) M: ]8 Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! D0 I2 v) q' o4 ]6 \# t+ VSeptember. Non-financial investment grade is the new safe haven.) {: {) Q# A& n+ |8 F0 l0 f' A
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 q. E+ M8 l i, W0 R6 E: ~6 I2 Nthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) r, f; Y' o( Q& \/ G* W2 J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& |8 D% |( `: ~access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 T9 A% o. B$ Q r7 m/ Q! TCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ M% c( Z/ S6 y7 v6 F- x4 q1 w
positive for the year-do-date, including high yield.! P& W# g8 `. k/ }+ [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- G1 z1 Z6 I# c2 a
finding financing.
/ O- p! v- p2 `' Q t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 n, s4 k2 ?( ?# e! Q8 ^were subsequently repriced and placed. In the fall, there will be more deals.4 M2 i8 }* N$ _; {
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 ]9 i9 X# D2 ^% |. W( r+ bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ y4 t9 s/ u$ S6 L2 w3 [going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 E G) n( @# u; t) Fbankruptcy, they already have debt financing in place.& D1 @- b) F& T' t% p4 Y9 [2 h" m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# l4 v3 n: h6 X7 }# c
today.
1 c1 l9 ^6 a; D. u0 F; P8 W) e Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: a- b) Y T! u1 H' y2 e
emerging markets have no problem with funding. |
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