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发表于 2011-9-17 13:16
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Current situation( z$ `% a3 [6 v( k( I9 G6 N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 o* S; a" M" X% z% S+ {! Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% K ^7 R+ i3 F+ |! @( d* _impose liquidation values.
; O+ D% X. X2 m9 x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% ~' E S4 j- j2 _August, we said a credit shutdown was unlikely – we continue to hold that view.
- A( B6 o7 r4 X* } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! Q* V6 r9 w/ a6 k# y4 A; q$ i
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
5 K) u# W, x, ~+ h3 ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ X+ S$ c( D7 J, _6 k" d) D
September. Non-financial investment grade is the new safe haven.
! i2 \* _ {+ c& y+ Z4 H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ |* K* p/ X- U# x$ @2 l; h! M
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
Y8 ?1 i2 f* O( f! `billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# a2 Q( @2 M* w8 Baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* |) I5 d& c/ {, }" }CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 X2 P2 J O H0 [positive for the year-do-date, including high yield.+ |6 E. q/ _) J# E: X3 K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; s1 s8 C) D0 I$ W9 o+ N* kfinding financing./ F5 z) H1 `# j# L7 J& A- a1 {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ a7 k' S1 E6 F6 k2 V( U$ Swere subsequently repriced and placed. In the fall, there will be more deals.
0 _' E3 Z& q q' t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' H- g7 Y7 e8 {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 @) f" h; p8 O: \& |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& f' X9 O/ D4 s- _# B. fbankruptcy, they already have debt financing in place.! B3 G& m# q) w& E* U
 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 in2 c& E' D9 [, B# S1 ?! ^. j+ n
emerging markets have no problem with funding. |
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