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发表于 2011-9-17 13:16
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Current situation
1 C- A6 {) K# s5 W8 I- Z# j; Z% H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& |$ y' N% N$ }8 B8 v/ c! [* A6 I$ yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( Q) ~% u/ C7 T7 O( i3 N$ @
impose liquidation values.
0 H; Q3 ]+ |4 Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 ~' O% x2 }# E/ w: b1 yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 V# @8 U4 N- {% \' R& K# Z8 }. c) ?3 \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ ?6 E0 x- F% D6 ]3 f& g) ^6 R$ i. ?( @scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- i) D/ @- C) u5 c( A& u/ [
) ?' Y1 X, V8 F1 kA look at credit markets; F3 I6 p5 [- ~( `, W; L9 o9 i6 I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ J- ^5 P* X9 i3 g- i" k* @5 hSeptember. Non-financial investment grade is the new safe haven.! S6 z) h% J, M4 a" B3 B! Z" B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 z8 B! P+ e( Y/ T& ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: |; G' u; |& [4 D- V3 g: T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 W7 |. J6 S* G. K# H% v5 xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 D/ {3 B2 Q% O3 ]0 n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ O5 k% {* D& ?) T
positive for the year-do-date, including high yield.# Z" j& i: }, o, n& n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; R/ q3 [2 o. k' G3 ]) L' p
finding financing.
% y9 \+ `. O) F! e: } Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: I6 e7 L) H$ o; ~% Twere subsequently repriced and placed. In the fall, there will be more deals./ y9 J q1 y( o2 i2 v
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; G ]5 O6 b+ C% L' P+ F vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) n0 \5 \% B, x" t8 Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) V# h" q0 H9 J8 cbankruptcy, they already have debt financing in place.6 J" H, |' Y9 B! N4 M) [
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 _; _3 d* [) G( Z- O, O
today.
2 t1 L. `. k @5 ?* A, m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, d1 M M5 `& J3 `' m- f! o6 K3 W
emerging markets have no problem with funding. |
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