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发表于 2011-9-17 13:16
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Current situation
) c8 I- w: R B! G B1 F( e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 b4 a" r" y8 T
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! c' c; ~) q2 q' V- m) G, J% Eimpose liquidation values.) Y/ `( C* g! a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 a7 i, G1 i- }/ lAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 O% \' W7 q1 m a# l3 ]4 i: G, D! k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. ~% i9 A& Y0 ], @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( \# H& a3 H' s, C9 a2 G& i3 o
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A look at credit markets
( A& }- ]" @; M' U Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( C. O, X( \ V/ kSeptember. Non-financial investment grade is the new safe haven.
7 S+ c2 b4 w( K) d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: A0 j8 t1 B$ d6 S$ P3 ^8 t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ F0 {& }6 j2 k! Xbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 b& c9 @% ?+ x
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 g* m+ O) W$ k" {0 b4 i8 r& `" J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& g$ V \( N/ i- Vpositive for the year-do-date, including high yield.: O" e9 @, `! B8 r7 G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 A/ a" h$ ]- o8 x. f4 d/ Z5 C
finding financing.$ G" @$ Z( [& t4 G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 y6 q* z7 \% A
were subsequently repriced and placed. In the fall, there will be more deals.
3 S8 w$ Q7 Z. s/ b Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ ^' M" z9 A; Q/ Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 L% M j6 z5 u: f! N6 F- \
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( z' D3 f$ q2 P: U
bankruptcy, they already have debt financing in place.
$ }/ J* T. y# H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; W& C5 [8 |# C: Ptoday. {6 p, P0 Z' F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- b) _; x. W* G* t V3 nemerging markets have no problem with funding. |
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