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发表于 2011-9-17 13:16
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Current situation
8 M2 I6 p8 I8 S' B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& R* z' u, Q8 t2 sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: a7 v2 _ L( x% H& {4 Dimpose liquidation values.
. x( N" F1 J( n* Q& z: ^ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. Z6 ^' o( {: Z# [+ u7 }August, we said a credit shutdown was unlikely – we continue to hold that view.
. m- S' j: H! |1 ]$ y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 s' V% J3 Y" R8 J7 mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# F; K/ y$ W5 _) B, g/ r9 U4 z
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A look at credit markets) q* a( L# X( h) d# E+ Z- @% ?
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ j! N7 `$ t) S, u* t; fSeptember. Non-financial investment grade is the new safe haven.
5 y: p9 u" U% Z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 N b) g) R$ [6 I* N3 K, ^
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: ~. v$ J# F5 b) R8 f d# ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) n0 o" J6 Z( Q$ K( ^
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 f; _9 `" F0 F1 H" v+ H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; v! [3 g, i; ]6 bpositive for the year-do-date, including high yield.
. x! C; d, N S+ r Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( l1 L0 d0 N( C3 D, ufinding financing.
) ~- e- @. X! h/ m, F Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; I* v9 i6 x/ X. ^" \were subsequently repriced and placed. In the fall, there will be more deals.5 m* c# x! \* k5 T: b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 _3 l4 u! M( c8 _* _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ P+ ^ H" M( k; e/ W2 n1 [" Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 L/ G+ f3 k& p( }' c
bankruptcy, they already have debt financing in place.1 c# I: ~, g4 x% o" \" K- a _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& }/ D0 w2 u7 _- d3 m% s4 H3 ^! W
emerging markets have no problem with funding. |
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