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发表于 2011-9-17 13:16
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Current situation
+ N8 ?) y: f% Z! V& W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 T; X# F5 ]' g5 [
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 l: w/ O9 J. |& T8 S' Cimpose liquidation values.$ U4 p4 z! @; d0 W2 K
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! w; a B$ X0 o. M) X, J W }1 l
August, we said a credit shutdown was unlikely – we continue to hold that view.
! F. R5 X- f) K- Q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 K4 Q! \1 u2 z& E- e4 wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- B4 [) s/ \; {- b7 @9 {# OA look at credit markets" |6 I0 W) m. w9 ~& j5 o
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ }1 Z1 H! l3 G: l! b$ g, D
September. Non-financial investment grade is the new safe haven. o% f6 r3 s: @4 k; F9 c/ B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ f* b& ?$ q- W5 u/ | ~# f4 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
D! s+ [: a* ~2 v! abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' S) j4 ]6 Z7 S3 K8 u5 ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 J' u* }( \6 jCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. O, J; v: w& x# P: Epositive for the year-do-date, including high yield.2 ^; P( u0 N. ~; Z' I" ^
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& }% {! \! W! A$ K: N# rfinding financing.6 x6 I6 a" m2 ?$ q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ S+ h) U, {9 z3 S
were subsequently repriced and placed. In the fall, there will be more deals. {3 ^% {4 }* o5 r1 t9 h! s+ K3 H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 w2 x' n1 a" B4 j; J' Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. |/ I% S6 O$ L/ q+ h7 w) \: w8 Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( \9 _" k2 `. K# |) c% u0 W
bankruptcy, they already have debt financing in place.
' Y4 R9 F: Z0 n/ u" o' f6 ~5 h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 b% P7 w5 W7 G
today.
; s' U) ?: O7 X3 i! N3 M* e# y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in j8 ]9 j+ h! q
emerging markets have no problem with funding. |
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