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发表于 2011-9-17 13:16
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Current situation {5 k& b! m$ v2 R) u% Q9 h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* D2 n8 _' C$ E
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: _' z0 C9 ?$ [6 C) ~
impose liquidation values.' l. i! j) e; T% O
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 d# K1 u- u _5 R0 N6 a# B+ a" eAugust, we said a credit shutdown was unlikely – we continue to hold that view.
0 U# T' `" j7 y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 \! x/ V. o" r, a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 R! Y: w& P# @" e% F
2 I: M* _+ k; o# Q5 K% D+ {; T" j" iA look at credit markets
: u( b" @6 w8 ^' c+ p$ h Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 o2 N$ j v3 u }; b' v+ g; RSeptember. Non-financial investment grade is the new safe haven.
, g9 B7 n) J' J- O$ [4 V" m; ?$ g High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- N# }2 c- @9 L' r( G
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 _4 G4 F3 F0 j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ C( `& l( i; ^. H
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% ^. ]) C* b( G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 P$ ^$ m/ N$ R' f! v4 e/ }positive for the year-do-date, including high yield.3 b0 g7 c& r- f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- P" P; P6 w: j5 n3 W- u; f$ V9 {( n
finding financing.
) {: L9 y0 T' b$ E3 `3 K8 X' R% R: p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ s3 |% A6 W6 gwere subsequently repriced and placed. In the fall, there will be more deals.5 E. N6 J- O$ w4 y4 Z1 y8 k, j
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ j d8 s+ `6 Q8 `+ X/ [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# ?3 O) Y5 T. q0 f I. s! }. h' q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 R. _ g. M- \) i! Obankruptcy, they already have debt financing in place.
5 |$ Y# j/ \/ s% q. p European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) C& S* U6 L- G5 v' a$ Etoday.; _7 m6 f6 N" K. t" u' p+ z a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& g( z4 \5 ~6 Q3 D/ ?
emerging markets have no problem with funding. |
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