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发表于 2011-9-17 13:16
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Current situation
7 S! f# Y( X2 D- A& [7 { The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# l' ~ j+ ^& Q* Q0 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& N* i, q' |, T, L1 kimpose liquidation values.: u% [6 @2 {5 P& f4 ^4 f0 M9 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- N& s! [- S. R- ~5 C* ?August, we said a credit shutdown was unlikely – we continue to hold that view.( |5 x* N- q& o- ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 m+ v1 Q* F& V- V6 n9 E0 B0 D8 Ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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3 h2 \( `( S& _7 s7 \, d4 o' EA look at credit markets+ T8 Z) l( }) m9 A6 |! [& u2 e+ B/ n
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 G0 g* K9 r0 @" L1 YSeptember. Non-financial investment grade is the new safe haven.
0 D) L# E \; f) _2 L5 I6 K9 i+ h High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ V N3 _$ N) s4 O! x* u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' J' }2 [; C0 I! [. l; _billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% p A0 C. G+ c" N5 n p. i
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 v* ?1 }5 R v' o$ |1 r6 z( g5 V7 rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
b- r) e6 l; L7 O a( D( Zpositive for the year-do-date, including high yield.7 b, R/ Q# d- j3 X/ T D
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 b# w; Z8 T: ]7 C
finding financing.
* G5 R* U) J+ e* p# S% ~% H+ f Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 j" _7 x2 W: m
were subsequently repriced and placed. In the fall, there will be more deals.
9 N% g& Z4 I6 N9 T' l3 P0 D Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, }2 n; y$ x1 cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! E5 D* F" I- ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" I9 w' M2 E5 o& B; U5 E
bankruptcy, they already have debt financing in place.
, o& }2 A4 t X* R$ P0 O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ k+ g' ?7 l9 l
today. i0 f1 g8 J3 F; ]
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 ?% X. g9 v( I2 j, }% Femerging markets have no problem with funding. |
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