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发表于 2011-9-17 13:16
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Current situation
; z+ `/ z" o8 ^( ]; n The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 } r$ }$ R) r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, X. E- b$ Q! [ d( @6 V, R& z
impose liquidation values.
6 Q- q5 Z+ w0 u/ Q: r/ I1 G' n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 d* l4 G: n8 y8 B* qAugust, we said a credit shutdown was unlikely – we continue to hold that view., I! E3 F1 K6 d
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
T, L H# }* L! J, Iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
; W8 j$ V) r. I/ m Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ n) n! A7 m* T, X) j$ c# [: P
September. Non-financial investment grade is the new safe haven.% W8 @- V4 u% e# ^1 w+ r
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 k H ?0 i; @+ @, |) n, n+ l5 i
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 x. z% G8 a5 c) ?) n8 P1 A3 I5 y8 |+ Cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ t7 q" C0 k3 n; ~access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# ?. F4 y2 i' R
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 \" l1 o6 q# s5 z4 j2 R" wpositive for the year-do-date, including high yield.' l( h- G, z2 y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' I" ^6 \1 B9 \" U6 e. H& s
finding financing.
- X; V5 D' n1 D# Q& k% @( ?. ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. Z( |, w' |4 Q$ r7 e6 u. g
were subsequently repriced and placed. In the fall, there will be more deals.
Z/ _& @' E; W8 G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 w0 `# M. K4 N/ Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; L/ ~) i, i; C1 v7 ^3 @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- {# ^' l/ J+ I1 p& C
bankruptcy, they already have debt financing in place., K& z i) A, r9 h: z" v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ ^) y* f% q8 o; `, f
today., O) Z+ [, x1 B: _* k: H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( L$ j3 e) F" W/ _7 k
emerging markets have no problem with funding. |
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