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发表于 2011-9-17 13:16
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Current situation
+ T" l) [+ N0 T( f The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* d4 c2 r. Z5 H- q' H. ^. Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( h: |. X q3 y* Dimpose liquidation values.! r. v) A5 s) s) m! `3 a4 @0 o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ I6 Y7 r. e1 C- ^3 ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.1 s, s7 I, A p3 O. V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, _0 {. Z9 v% Q) L+ l3 @' e0 \$ s, `' T
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
$ A7 [3 H2 b' X+ S/ @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 J0 X+ P8 \% ~3 ]/ ^- ?1 `" h
September. Non-financial investment grade is the new safe haven.
3 ~8 a" f$ p" W High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 {) y4 I6 f* h8 \3 K) L" dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; _0 K' g& v7 Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* [, E$ V! q% l( r- D8 O% z3 v
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ s9 F1 j1 {/ RCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) t/ Q5 C$ }8 V8 k8 ^! c
positive for the year-do-date, including high yield.
: G7 N- }# X4 G3 o0 v1 d% g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 n" z) S! D- N2 X- d% B( A' \. nfinding financing.) b/ p0 J B1 Y" j
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 s6 E. Q, {3 Iwere subsequently repriced and placed. In the fall, there will be more deals.
% ~: T3 ]+ z; e! T" h2 u* \8 b Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 s7 i6 Z4 N! e& Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, e3 p/ T: g/ f/ B3 h& I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* i& k' j- a2 H3 }/ U, P: Pbankruptcy, they already have debt financing in place.
7 E% d$ O) k1 U& t' H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 L) X7 ?: ~$ [& ]
today.
. g1 J- j$ m5 @7 ~) f6 `! b5 R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ @5 t+ \4 D& c+ e* e
emerging markets have no problem with funding. |
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