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发表于 2011-9-17 13:16
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Current situation: t: q/ ? Y1 N; G5 x) U, O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 D, M! H1 s' ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- H8 y) i5 k% p: H/ v3 d
impose liquidation values.
* M/ ~1 C' n1 M4 ~1 I In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 ~; `) ~$ {$ q' D' t+ E$ l
August, we said a credit shutdown was unlikely – we continue to hold that view.
1 k% K, w; i9 A: h t/ D; ^4 \& u: a v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# L& n+ f0 U: g' k
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- P3 x) [1 d, X7 v8 D8 b6 N
/ D/ W K8 x* G$ v+ J- k; BA look at credit markets
6 C6 M' {6 D+ S- D Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% r* D, \ `! d) x5 E
September. Non-financial investment grade is the new safe haven.
7 V' L/ Q) b7 k) s$ F9 t1 }) y. } High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 A# P& ]& v9 L, y7 I& |' A& T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# A5 v4 R+ L0 V- u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) }) n2 c7 ?7 ]1 J' A3 }" q/ ]' R5 i0 Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: u) S" o0 D* ^% W7 m% fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 w# P/ m. m- Npositive for the year-do-date, including high yield.6 r" ?3 m& s: p4 `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 u' l, G' |& M) E7 o8 dfinding financing.- f c0 J2 l9 M$ j& Q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' o0 H, Q; H; K% Q" k; i" C: Ewere subsequently repriced and placed. In the fall, there will be more deals.! x! q4 l! x6 {5 r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& j7 a- ^4 Z) His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were A2 T7 l" W. e- i3 J( |/ Q2 N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ E% A% m; I2 Q R
bankruptcy, they already have debt financing in place.
' W4 G) c, p8 [4 `# p0 r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& T. ^$ H6 R+ t. h/ [
today.
# M( G) v$ B5 z, \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ N! K- E7 c0 F s$ Bemerging markets have no problem with funding. |
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