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发表于 2011-9-17 13:16
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Current situation$ c9 H4 N1 P' O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& [; J& M+ P: k. P7 Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- n6 P; A5 e/ u2 e' t
impose liquidation values.
3 e4 b$ D! `( W" O \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' d0 n4 n; h- O5 x: C' r' pAugust, we said a credit shutdown was unlikely – we continue to hold that view.9 P# U7 {# U7 L4 h0 \+ b+ L
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 z6 H, G9 I6 d8 y5 J1 o' A& h
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
7 Y0 q8 q- D$ q, {2 j, n' ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: c( V' Y# g8 c( R& MSeptember. Non-financial investment grade is the new safe haven.
G) N+ D, y% E; d4 \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 S& b% W' R3 R- K; W; Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& ?0 k8 M; G2 Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 }; ?& ], E9 z1 K# uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- L2 Z$ M' K$ G0 CCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! c( P4 _; R/ ]6 S
positive for the year-do-date, including high yield.. W- t) b9 n" o( D4 i z: v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% c7 ]$ V2 |6 V0 }
finding financing.
- j+ {, n2 I# `1 {; G. m- Y N9 x4 x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& Q' U1 Z3 R+ ~; I! Zwere subsequently repriced and placed. In the fall, there will be more deals.! q8 d4 s$ i: G8 u& b/ K, ?$ z7 B' f2 R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, L6 g( }/ R# A- g5 ?; N; [+ f
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ T. W) E+ ^# s
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
l: ` a) G: Obankruptcy, they already have debt financing in place. T% d( a2 S7 p2 j) N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 p. `( A" A3 o2 z" v& E
today.
v: o: H2 B' z ~- K$ k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 Z, G/ s/ G, z( f% y. I8 p* Semerging markets have no problem with funding. |
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