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发表于 2011-9-17 13:16
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Current situation" Z0 X( ~" F0 f$ [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) u- S+ t; h1 l) s7 k" C$ yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) C8 @! t' h: N; z, W
impose liquidation values.
/ `) a( z, ]7 | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 U+ y; I# p& l, u8 j8 MAugust, we said a credit shutdown was unlikely – we continue to hold that view. Y) T. F O& c/ t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; o% M( T6 r. G- O3 a, n
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets# E" l/ s4 y" _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. @; u* w' Z( [7 _& t {September. Non-financial investment grade is the new safe haven." L1 U: v. e9 _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 ]6 x( `/ a- q; ]% R2 Y+ F
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
d* R0 X. V- r& F- m. a& h+ {billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( x2 a$ i7 b8 ^9 h; [$ V+ Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade i% H4 t4 Q6 O
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 I2 n3 g, T6 H* R' w
positive for the year-do-date, including high yield.
2 c7 C9 F7 S1 R8 C8 a4 v, U7 s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, H; r5 Y6 O, Nfinding financing.
) d. C/ L$ y5 y: i0 H1 q Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; ^5 f4 p4 D8 k6 x6 ~were subsequently repriced and placed. In the fall, there will be more deals.
; [6 @) F: t# h( t: q% ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' g; |) y0 P4 o7 h. kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
g; V7 @, g f+ }6 W% @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ P* Z; t; Y0 Q5 z3 X$ Xbankruptcy, they already have debt financing in place.
8 P4 V/ Y, c9 R* D9 ^ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ {/ }1 U2 R( {1 I
today.; b2 O3 t) c: h9 \4 z/ O1 N; @
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' i) E8 x: I' m1 n5 W; N' c2 l
emerging markets have no problem with funding. |
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