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发表于 2011-9-17 13:16
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Current situation2 |& A/ Q/ p( ?& y7 f' |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- @) Z9 `4 T/ p, U# M9 c! e( p! ^/ Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; d! T; k5 s1 \) C' y3 l6 f
impose liquidation values.
& E2 q. r9 i8 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' y8 R0 D i2 x1 N- i% d
August, we said a credit shutdown was unlikely – we continue to hold that view.
6 ?# V( q- R+ B) a' I5 T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% t% G4 {" N' O0 j$ P2 Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ N3 a) i0 X1 |8 A
+ X( \, D4 J9 y0 R; B" R' O" N
A look at credit markets
: Y! R# \/ T! ?6 h: @# S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
V7 }' c9 s" V; C- rSeptember. Non-financial investment grade is the new safe haven.
5 f2 X8 G" }* J' }' S, K6 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# k) ^4 u/ b! F/ ?) H' ~; w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% z% w$ T& R) X" p0 @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! X) C# z1 H, X1 T% G7 t1 g$ b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 p: Z8 X" ^% u8 GCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) L2 W8 x1 i" F1 K8 n
positive for the year-do-date, including high yield.
: U: Z) Y5 o9 w& c: m/ m: t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ N, o* {; q" z0 v( s4 {4 J- O/ Q
finding financing.# H/ Q& i( E- J6 b; N" e
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( ~0 J; s' I( Y* C/ e( X2 U
were subsequently repriced and placed. In the fall, there will be more deals.
4 q D, F/ ], Z4 P9 V! Q$ |3 E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 j4 g' E' R! O/ c; d! n
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' V. m( V9 ]& ^# k, mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 p& N2 k# F& t Abankruptcy, they already have debt financing in place.
) T5 ?4 `! R/ G European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 {6 J" {( `5 B! |) E0 f. N3 V
today.
, Q& N' r, @' {- |& B. f! n- v Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 C4 b; I4 u- R/ d4 vemerging markets have no problem with funding. |
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