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发表于 2011-9-17 13:16
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Current situation
( S& I \; H& f9 _# O" P3 s$ C The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" v, |" } W5 ?$ C7 l- C T" bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) Q6 y" q0 T- c% O* @
impose liquidation values.
* ^$ o/ t3 U# R* Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& G! |% U# f" z! i1 E- UAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 P( y& r- x U# s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ G- l: B" U$ d* J0 m5 q' g: B# @3 q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. H) i6 B K5 K; h3 [A look at credit markets& Z. {5 \; K; y; L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ F' o4 C& I9 ^& i) p( ]September. Non-financial investment grade is the new safe haven.( K# x9 T" O! c: F+ g! }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! `- T: w. ^+ S+ Y" ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
7 k; _" l6 d( e2 mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ I% \) }3 _: m0 r3 j7 maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& {* F) b$ T2 L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, n. n8 k/ H Z p/ w0 t
positive for the year-do-date, including high yield.
% y: z9 g% ?8 R, ]1 q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 Z( Q* [, r0 V& G4 tfinding financing.+ g& L7 ^1 F [8 x5 }7 }' N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; M7 x' z; ^; | I0 U$ Wwere subsequently repriced and placed. In the fall, there will be more deals.
# V- p2 c$ @) a& \, q3 |3 X0 W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and |4 [- @' b- N% ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ A+ x7 W1 ?6 A1 K2 @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: [3 ^3 \- U3 k: i/ h' `, u
bankruptcy, they already have debt financing in place.
) T$ U& x: y9 @. U' e. h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 }& T5 @ q w7 i( m8 Qtoday.( j' F: w" A# n7 K( g+ f' l5 S7 a! Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 k( g' _4 @/ y* {* s3 Uemerging markets have no problem with funding. |
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