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发表于 2011-9-17 13:16
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Current situation- i$ F- P( W- k- o9 `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. l8 y- N3 w) u ^" _+ ]4 m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- r; N( s" W7 S4 P/ D& Q" e+ y2 ^impose liquidation values.
2 M' Y% b$ ~& Q" P9 K In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 ?" M7 D4 A7 Z
August, we said a credit shutdown was unlikely – we continue to hold that view.
- c8 {5 p& M! g9 i1 p x% W( ^' v { The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 N7 t! @" E# y, y# S% e& N m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 h2 Y9 o! r2 O* A7 z
8 a. j, R L7 Z' l, W* n
A look at credit markets; ]; M: A9 ~; x. @: O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% K- @6 p: S/ W n' z* |9 ?September. Non-financial investment grade is the new safe haven.. _7 d; x; D4 x* M- G b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 m2 \& b3 [' r! |' _% @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) y2 N% `# r; b; |, wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 s8 i% d* {8 y4 aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ f8 E) \* i/ `3 R$ SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 X& Y; v& ?- t: G2 e5 n+ npositive for the year-do-date, including high yield.
0 _9 J, o W5 D. @- ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, U2 ]" ]$ O/ W+ D6 `4 z
finding financing.
- n5 t2 C- z( T# i) f2 U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 V8 M! }; ]2 g# ]. k i4 Uwere subsequently repriced and placed. In the fall, there will be more deals.: D& S, h2 k @; F0 c: B1 B
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. k* {! ~; Z2 a8 P0 v$ g$ e$ Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% C2 C- ]) @" ]& b
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 y2 @1 x5 D( Y3 Y) M) g4 ?/ n$ u9 S
bankruptcy, they already have debt financing in place.2 {6 ?( Y( k- l# Y, r* X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 W8 M) E8 z; c- M" [
today.4 @' o# j# {; T' Y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in I2 A, H, F" \2 D1 U1 I& Q/ j g7 L/ E7 [
emerging markets have no problem with funding. |
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