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发表于 2011-9-17 13:16
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Current situation" R2 s- R) M5 Y/ S9 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( B7 a7 o; N# ]2 e: Z3 Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, h; _7 g/ K! _ M. C
impose liquidation values.
# Y& E$ A" N3 m' Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* i/ p8 j J2 G0 _. E
August, we said a credit shutdown was unlikely – we continue to hold that view.
9 ]8 ?6 C, \9 D' i! T3 r: d: N The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' U( | ?, B+ P/ S2 `6 Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; p0 A9 _ l1 M, aA look at credit markets
8 z+ j+ E" z: L: |/ u Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# X; x& I y+ J1 u* ?7 NSeptember. Non-financial investment grade is the new safe haven.
& }0 T+ @( Y6 R, { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ |# P: W1 e( [* `2 ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 _3 y# q, G3 K7 c; k3 @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! |! w( M# E+ Y; h- N; o
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 Z" T' u$ J z7 }: yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* D1 Q- p2 o m* z6 Z8 p2 ipositive for the year-do-date, including high yield./ I, N b% c) w6 @2 R% X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 T) n7 y0 v" [/ D0 ^) l/ Sfinding financing.
% Z& Z, [ G+ D' X. N- B& u" s+ V. E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. b% d; L5 V( e. N: f/ }' P" t
were subsequently repriced and placed. In the fall, there will be more deals.5 A: a, s9 Y6 k# L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' G6 e3 j3 v3 @( I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% Z; |; p' L7 T. \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: q: \& z1 C7 F, l! h
bankruptcy, they already have debt financing in place.: Y- ^6 `1 v. @" H: F+ o- S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% @$ m& j0 I, M" ?# \today.
+ c9 T8 T3 }0 b: }- x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 m1 q( R$ ^) h3 j2 Q) kemerging markets have no problem with funding. |
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