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发表于 2011-9-17 13:16
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Current situation0 K5 `8 o' q A' P/ i6 ~
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ g6 r. ~; Q3 g1 [( Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% ]1 ^" P' \; X: {5 a. ?impose liquidation values.
+ B. `" ?3 B: Q: p2 @ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 o1 a0 e2 x- H3 E, x1 o7 ]% ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 q6 L1 d3 H( t3 Y* e The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 T) J( _3 W8 t4 T* d
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 q+ J3 Z. ^! S: H/ P
& p+ w; c0 O# C, f$ ^; u2 Z* lA look at credit markets: o( A! o3 g/ S. K* {" M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' g: Y$ ]% } l! YSeptember. Non-financial investment grade is the new safe haven.
- _$ Q7 U- Q8 Y' D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" j0 f" o# p2 m( g# R2 n% ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) C' Z }9 b% x' ` ^( R3 [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 S* q. U8 t; [9 T: M' n6 Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 `/ J! \ O( G) M2 Y$ G9 i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 c! ?6 W9 Q/ G" k Tpositive for the year-do-date, including high yield." p% `" ^2 U4 V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" J! P/ Q8 z" J9 T2 _. Nfinding financing.
! |% @2 e. K, S4 S Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 m; B$ F1 N2 X
were subsequently repriced and placed. In the fall, there will be more deals.
2 s' d) ?* x |/ ]: ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 O( N# N* J4 h/ H) xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, [- E+ m' @. X3 }2 R: z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 i7 c! R7 a4 i" u6 l6 Wbankruptcy, they already have debt financing in place., z" W8 ~5 H+ c8 ^0 c9 ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* B3 r$ @* b+ u% P' y: \today.
L$ o! V1 \# D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) k; r' | b% |- V& b& i
emerging markets have no problem with funding. |
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