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发表于 2011-9-17 13:16
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Current situation
% `; q# \3 B6 q9 e6 z' H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 V7 P/ C$ j. i' t" \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 ?3 T. P: i$ e. X4 F/ f& Wimpose liquidation values.
O+ {. N0 z1 S- G) \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In O+ N% {) K# J' i1 j x9 a
August, we said a credit shutdown was unlikely – we continue to hold that view.! n' e ~5 d l& Y+ z4 L- X: b
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension `" |+ _" W4 U- y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% g# r' q# X6 c! C2 C3 A, ^$ z
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A look at credit markets' e4 J5 j1 \" y }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ B. f0 C5 F) r& C$ NSeptember. Non-financial investment grade is the new safe haven.
# _* l- p7 M) T High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 @! a% X% n; U7 A1 l* o
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 Z, v' z% G; N5 s, I# j% \billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 E3 O. A5 g) O, H9 F) {access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! h, ~. Z! x5 @7 m5 V
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 S0 W! K2 {" X! w* Spositive for the year-do-date, including high yield.
* ]. p5 @$ z7 `8 j# K6 I Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' t O* e) p( S9 n+ }5 |finding financing.
- I4 P Z$ F- C0 \* b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ e9 F7 ^4 m, X$ |* v6 F, e
were subsequently repriced and placed. In the fall, there will be more deals.$ ^$ @6 _2 M( o) L8 U$ i
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' {" L2 |/ _, n
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& c# V) L* }( y t
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! E( \, m7 F+ ~ B" L6 ]* obankruptcy, they already have debt financing in place.2 Y' r Q( L7 J# F0 Q1 ~' R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; X& P: Z# e; e; | a, B; ]
today.2 l3 ` L' x2 Z4 w0 V4 \
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! }) D. x, J( yemerging markets have no problem with funding. |
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