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发表于 2011-9-17 13:16
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Current situation( y7 \( r( ~& @+ b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 d, {! I. w; ?/ b: ?8 R$ I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: C8 x, d; W" C# r: _
impose liquidation values. v+ f, P+ w& S& S4 _" h. t8 _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 D* k, X/ j' \
August, we said a credit shutdown was unlikely – we continue to hold that view.( r4 S. `" f& ^
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; ` @9 V% M. W, R3 Y* Lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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2 z! X5 H% n( E" R, h, J9 J% c+ lA look at credit markets
* F6 [/ \: t0 s! F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# X& K, f' f; x9 z
September. Non-financial investment grade is the new safe haven.8 `5 R, d3 E7 n
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& ^ U8 }5 G; ~" O7 _" b# A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; O% |, k( | p/ z h9 z8 T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# U; U* }! S2 i' C# L# l2 b1 z
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 u) d* `4 d$ c* L% o q- G, Y0 H$ \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 N, A' a) Z/ X0 _- N/ jpositive for the year-do-date, including high yield.) Y/ _5 ~$ G4 @7 F
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
7 k' V8 M. c7 n1 l Y+ z! gfinding financing.2 I+ W0 L D. P7 @% s5 a3 C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 d) B" N# B5 \/ J6 A0 y
were subsequently repriced and placed. In the fall, there will be more deals.; @: {, k; }* O( C( Q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* M$ s2 h* ^5 Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& N$ Y4 U, V- I, E q) ~, q( f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 h" {$ m9 c9 _1 C
bankruptcy, they already have debt financing in place.
9 S1 {* n; {" u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 r4 d6 Y; a7 Y% G+ z _ v9 ltoday.
3 U8 L/ x" e* P5 e Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% _" T8 s8 N/ @ P9 t. v6 lemerging markets have no problem with funding. |
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