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发表于 2011-9-17 13:16
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Current situation2 _. ?# `% u8 u! W ~
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( n) O" {7 K8 x2 ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* W3 q i' a. [impose liquidation values.
6 L- ^8 {6 c' @9 b In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 r8 v) P3 `$ X& V. c; o A xAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ F, ^) P* D6 F7 }( J3 x
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. F" N1 E3 C7 D) T( w- q" kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
3 w& a% \7 D# i; m9 r0 S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. t7 c. v/ n' W: Y3 T( cSeptember. Non-financial investment grade is the new safe haven./ R- P0 T2 u4 h, _4 Q: I a( }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' l. z" Z; n" i- Xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. Y* p" E5 u5 Q' i6 U d7 E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 ^. m" v: d( I) |access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; Z, M( Z7 O* z3 Q1 D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 Q) O7 s7 Y. S6 T0 w) C- |positive for the year-do-date, including high yield.6 F k' t/ i) ]. D# X& }1 m
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ ~1 @) l/ `$ J
finding financing.- ?: h. ] {: I2 v& u3 B- i- l
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- \- K/ P& L+ P2 R
were subsequently repriced and placed. In the fall, there will be more deals./ G- i, A$ p# a0 y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% C9 {) _( b7 w3 M" tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 Z7 R& O+ i: h: N7 |! D. lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 W. ^( J' E7 E9 F8 z: w
bankruptcy, they already have debt financing in place.3 p8 ]/ L7 x8 E: u3 I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( a/ J) T: r3 l" N$ q4 C: J
today.- x; z( ]9 U6 I8 R+ Z1 B4 u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) z0 w2 @# \+ n: z
emerging markets have no problem with funding. |
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