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发表于 2011-9-17 13:16
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Current situation
( i2 L/ E9 L) z/ v: E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" _9 p. P3 v( |) l4 p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 F; _& `* {' ~impose liquidation values.
4 d9 v( w+ F4 _) z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ d8 d( j+ j3 E8 D
August, we said a credit shutdown was unlikely – we continue to hold that view.
: I4 B# f% B* u: Y8 j The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension I: l* n, P, a9 r. F$ _& m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* [) f w9 d: V7 s% c! g' E. B
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A look at credit markets* H* ~- v7 w) d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, Q% j B! n6 n! K5 F
September. Non-financial investment grade is the new safe haven.) W$ T% @' L x6 Y0 X4 h
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) J3 D7 _) M. lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 J& N* H2 a. K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have R8 i1 r% P9 I; V& c" C4 D/ B3 Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 m! }; b7 S. a/ S! g! y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 @, j8 z/ \* c1 }
positive for the year-do-date, including high yield.
- M7 Y( v/ \& w; }* I) @ u Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 Y7 g2 P3 ^" M6 k2 w
finding financing." ]( X. [8 J) h/ O3 O( N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ x G: |$ ^$ F \, J3 H; J# {% U
were subsequently repriced and placed. In the fall, there will be more deals.2 A b1 {( ~# r6 q6 c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( Y. A0 B. S% ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# G# {( x3 b9 x1 F/ rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 E# r: m1 G& v; o1 I5 x, M3 obankruptcy, they already have debt financing in place.- F Z3 X7 T1 x8 O* u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: N6 F% T q+ `
today.
6 _9 R: t1 D; W4 o8 N; Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ T+ T' X3 ~, I: Q. aemerging markets have no problem with funding. |
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