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发表于 2011-9-17 13:16
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Current situation
$ g" J& ~% v; ?& Q- x The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# S' t' p+ G# T% ~" Z1 ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 b2 ?4 e9 ~. k. b0 F: ~
impose liquidation values.
9 B6 i, \- j0 J% z. ?2 Z# g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 r( G& J4 i2 Z* |
August, we said a credit shutdown was unlikely – we continue to hold that view.* ^/ j6 c& p |9 Q& N2 B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! f) [) R5 O5 R( B0 o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. ~+ ~0 f, x/ b; N
' q1 s' E5 Q9 f; v Z+ V2 W! JA look at credit markets! x: |. |# X% a9 g( g- X2 I S
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) S! q& x( p; ~
September. Non-financial investment grade is the new safe haven./ H7 p3 ~( O2 Z' h# F6 H2 y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. ~* s2 I3 K. J
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 j& K j5 A) X6 ]0 \# W* s5 z) ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ c- |# e3 G# M. Q- S% X0 n4 ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 C4 H+ G& x: b9 q3 v( E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 Q5 Q0 r6 f5 t7 i; c, ?
positive for the year-do-date, including high yield.
) q6 l- r4 h+ l1 o, a/ S1 r! l Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, W8 Y" R( M6 C* m+ {8 n( hfinding financing.& y; E4 s+ {9 V! `2 ~5 M7 t7 U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 L/ W$ V6 U- e5 h9 Z
were subsequently repriced and placed. In the fall, there will be more deals.
+ o* r+ O, [9 ~8 }1 { Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 R8 j5 \7 X* K* V0 e! N) Z/ ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- [9 z) _4 p8 O+ wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* h! A' g) N& H5 {" L
bankruptcy, they already have debt financing in place.
! A2 w1 _1 V E5 b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 K; e# S7 V# K# d/ J- Itoday.% h& ?3 I# H% ^( R. }3 b
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* J( m5 _/ l+ n* d1 I1 t2 e1 uemerging markets have no problem with funding. |
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