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发表于 2011-9-17 13:16
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Current situation2 n" m1 ?/ z* W- }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 W& \1 Q) t( T4 h4 O2 P
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may$ ?% B L$ Z" u% F+ I4 F1 i
impose liquidation values.
: |8 f$ E- p( F- n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& a" A# y) v+ Q6 S* n1 @
August, we said a credit shutdown was unlikely – we continue to hold that view.( C# [4 _4 b# t% ?( f6 m/ Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* o! S4 y( W! P$ ^7 D0 R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; D. q& T# X5 D, @6 a' q- pA look at credit markets( ?. m1 G+ j. R! B$ R- u+ }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- r/ S) u, X$ f" U+ VSeptember. Non-financial investment grade is the new safe haven.& v% ?, A- W# [* T5 _7 [, \5 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 e2 K5 A& B" _; h9 T9 j Z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. x" [# B ^4 l+ A K% o5 fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& m6 b1 t/ E5 i- d& L
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: \% K' F+ t* B* h. y# x) E1 MCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ g3 r) R3 L; t( d5 u# ^8 i
positive for the year-do-date, including high yield.
9 g3 R# v* Q7 A/ V6 S Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( ]1 M7 r* p0 S* Sfinding financing.
3 W! Y) b, |; h) p# j# Y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 {7 e1 p& n6 b, y, t( S9 o C
were subsequently repriced and placed. In the fall, there will be more deals.2 j& B0 Z1 P& M% E( L7 W" g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" |( G% s; `9 ?' i! C" O/ R
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, n8 ~0 }& V. U1 T J+ v2 z% H; cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ \$ {5 Q3 Z' v+ t1 Hbankruptcy, they already have debt financing in place.8 l! c0 _* w- d& w. {1 H% L
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# n/ `: p. `- `
today.* f K# c* e& E1 V1 m y! y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# G9 p2 U' {& D% aemerging markets have no problem with funding. |
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