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发表于 2011-9-17 13:16
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Current situation9 s( z1 I3 z+ E4 {/ O4 I4 `: b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ y& y3 n- J: d# h! n* W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, Z. T' v& L) X D4 X& M* bimpose liquidation values.
2 r( _' e; s' c* z& o In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& J5 N4 b! ` b. n W
August, we said a credit shutdown was unlikely – we continue to hold that view.1 T: r/ n' C0 E h$ T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. ~5 N- _/ N! s$ Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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, p7 ^8 D; m6 f- NA look at credit markets
3 x/ F' F$ o8 P K! F, X2 B Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 ^. L6 ?; E. y \
September. Non-financial investment grade is the new safe haven.6 `$ D% E& I$ o. y: v: `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 T3 T( Z E p# O* p; ^
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 p5 M1 M7 Q% l( u t7 Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 a E, `! X5 ^8 @3 {6 V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 P0 ?& H; D/ ~! WCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! q! ], c1 u6 t. B: R6 X1 `positive for the year-do-date, including high yield.( X9 j2 g" U) J' r
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# b* ?. s( _2 b: n/ Ffinding financing.
0 n# u0 ~* }- J9 X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: s# x# K) q/ ~were subsequently repriced and placed. In the fall, there will be more deals.. q, {' O( v% J4 \7 a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 x0 E& L1 [# g, `) W3 V8 f
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 d% d; x6 Z# k9 w, }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 G1 ]. N+ p! _: Z# a- I
bankruptcy, they already have debt financing in place.& @3 ^; k7 `8 d0 N5 T
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: A, Z# G' S! _; t9 Y7 s
today.* {' X1 d) @" G' E9 f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ \+ k' z1 @; m$ z+ d' s: w# _
emerging markets have no problem with funding. |
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