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发表于 2011-9-17 13:16
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Current situation
' I \* c5 X: U! z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 N' w: z& v6 j+ q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. `6 Z' N: F+ P& F
impose liquidation values.: {+ \9 F. N1 Y7 E. m
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" x( R5 o& a {! LAugust, we said a credit shutdown was unlikely – we continue to hold that view.8 {5 F3 o; B+ N0 I- O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& w7 j( @" ~ [
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
7 z: n9 R i G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' J: j: ]8 {" M! o
September. Non-financial investment grade is the new safe haven.# p n$ b5 ^! @* ~8 C- Y; V' K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 `$ O% Q2 t0 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 i- @! _" Q- B
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! x- g" d4 w; k' m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ c8 S- W9 V+ V% oCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ Y7 |4 P# ]3 O
positive for the year-do-date, including high yield.
0 U* N$ E& n) H& e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* `; u" [! G& S; z
finding financing.. a8 A" F2 |2 ?8 D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* p8 c7 v d( I! F, c
were subsequently repriced and placed. In the fall, there will be more deals.& D. Y( n* E# u: G1 S
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 |% J( N) p/ ~& m0 K( E
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 _6 Y& O, }% S5 u5 p8 G5 fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) P- x: T7 P4 s( Q
bankruptcy, they already have debt financing in place.
r9 B% M- {" j' k# S% `2 |& w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 \1 p: c) r! g. @
emerging markets have no problem with funding. |
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