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发表于 2011-9-17 13:16
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Current situation* U$ W: u3 ^" i$ x; V
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% v$ }+ K, W0 Z8 O, N: sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 \% R' o* x. {
impose liquidation values.
2 d+ Z7 p7 O ~8 w! T, }- l. f In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 s5 K( h% I% E: D* s6 o8 E: Q
August, we said a credit shutdown was unlikely – we continue to hold that view.
# t/ D; c4 a0 G9 Q# X4 A The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" y% W. X9 T% J3 C' }
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: m9 N- l+ T r, Y/ P- H& s
0 j9 O1 ?3 A" Q0 X j3 \" GA look at credit markets
$ \5 e! S z* V. |# Y9 Z& p8 V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, b) P0 G& f0 g' BSeptember. Non-financial investment grade is the new safe haven.+ V8 U1 ^5 e1 F7 X H* N- x( Z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 r1 j3 g2 ^4 o
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( g( t" j+ p. A" ~. Sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" h8 |/ b5 p: x. {/ Gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: t) H7 ?$ j) j ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. K0 ?, x+ C% d9 W7 g9 `! ?5 ?+ B( [positive for the year-do-date, including high yield.
1 Q: U, t0 T4 P0 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' u0 Y5 S) v8 e
finding financing.
+ T1 p8 W& k2 P- A& I. e Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 }6 E) b+ O) w! G: Wwere subsequently repriced and placed. In the fall, there will be more deals.' j: u# H7 j+ D4 o4 g [
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 v& Y: C; S# H0 O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% K8 @4 a* X* D, u+ cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& J2 U* I# q$ s
bankruptcy, they already have debt financing in place.
/ c* E; G' w' e4 k European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- N t. l; v& Q
today.) R. d/ v4 }. H2 C( \( {5 Z7 C
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' a% A+ J& \' ~+ V/ w
emerging markets have no problem with funding. |
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