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发表于 2011-9-17 13:16
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Current situation
4 D# Q' y! G$ a0 ]3 o) m& W& _. t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' V4 ^* J* Q( c9 n# i3 \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! M5 `& N: ?" X% L6 d/ W) a A' E
impose liquidation values.1 ^7 c5 @4 A& X9 s o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& g+ C' q4 @* D- ] LAugust, we said a credit shutdown was unlikely – we continue to hold that view.) m! e, \ C* ]- W1 s8 K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 |+ \; V" Y0 A }& f- M6 uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets, k" ~0 r' x+ s6 N; n2 _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' v. u0 t' y: z) ~8 P3 `September. Non-financial investment grade is the new safe haven.
! L7 S+ ]" q, m* X/ Q: t) b! A# h/ a High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: ^# r& t1 a3 \then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! Y2 J8 s5 c. O9 F5 ?. Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 v L2 C8 s( K/ B: h' ^& P
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 [1 K5 M$ c3 a0 R. \7 _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" x* L% a6 J0 E& s! `% h2 \
positive for the year-do-date, including high yield.2 I1 R9 P0 o2 V; v/ T/ t! [9 u q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 X6 \6 E) j% W4 G O7 f2 g) {finding financing.; _3 Q4 g! S- S7 J' C' M
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 y. H/ Y6 x& x5 Dwere subsequently repriced and placed. In the fall, there will be more deals.2 F: F' O2 k# O" ^9 v1 f
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) F5 x3 j+ T3 C
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. w. e& r& e+ G5 T. d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 @% M8 r: A- sbankruptcy, they already have debt financing in place.1 z! G% `) d ?/ |4 `" m/ Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: p6 Y1 e2 J: i7 A) Q L* x# I
today.
: ~7 x3 v' S7 u m2 ?) q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 h, @4 r2 Q1 I2 {/ V) l
emerging markets have no problem with funding. |
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