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发表于 2011-9-17 13:16
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Current situation0 j n/ s0 ~- y% @/ [8 K
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( ]; G# p* t5 t& S: h! Aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 @ c* [1 j, ~( X- v* d; \8 W
impose liquidation values.
+ c* Q/ K8 i' P6 {( B In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 U3 I- u3 }& tAugust, we said a credit shutdown was unlikely – we continue to hold that view." B4 T2 N$ ]+ O ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: v, Q+ a2 Y% r6 {1 @- \6 v9 o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 t+ |, z' u# J+ i" f1 b; S$ O
# B8 m* C+ W1 `# k2 HA look at credit markets
3 b$ z+ l2 O1 { e Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- M1 h; O4 ?5 g1 U% N
September. Non-financial investment grade is the new safe haven.& o8 K$ o2 j/ n# `2 q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 F9 D( ~& `7 ^3 R' Q3 X. O/ L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" U( R% i* n& v$ {billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 [. h3 T: u: ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: l2 x O$ J* J% a5 O& V d8 q2 |
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- L7 d9 _) o( a) r; m" _" F
positive for the year-do-date, including high yield.- T) S! A h- O! g' }+ L
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" u" S p2 U, F; l7 afinding financing." o7 W; r. ~& T8 m( o
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 A1 V: ?0 g& v. r
were subsequently repriced and placed. In the fall, there will be more deals.2 n. {: c" e) P$ B7 P1 x# r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 w- E5 f" H$ h! o3 E& Y* f/ a6 ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 }- T, r; n" J& f0 Lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- e$ I# M2 h- ~- B2 L
bankruptcy, they already have debt financing in place.
+ W% [' Y+ E$ T+ U European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 Q- o; w! x2 J- ktoday.
( C. E+ C0 ? d$ w; V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ O9 m- {, P* l2 ^; T# }- h
emerging markets have no problem with funding. |
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