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发表于 2011-9-17 13:16
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Current situation3 g+ U+ E. d: J ^4 F
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 {: o" |: Q3 m0 b& D
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 S3 f. n# R+ P* W
impose liquidation values.! v! T: R1 l5 o" `* p- u7 q# g3 Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, W7 V) H) I9 U( o1 w, I
August, we said a credit shutdown was unlikely – we continue to hold that view.
1 d5 X% Z: ?3 n% b, ^9 T0 M The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 W0 D3 {* O3 [, p# m! s' sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
! V) d. E( V/ {1 F2 O# p' O: N/ x( b# E6 F& M! y) p7 Q2 B2 c
A look at credit markets
. P* T8 Q4 W1 O, b1 e% [8 t0 R Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ s$ U3 x8 q4 |4 `$ m! W5 S! }September. Non-financial investment grade is the new safe haven.- W; ]/ j6 t3 h. D+ E1 f
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 a* j, M, @% b# }: Nthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ s2 g g0 o0 r" ?
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& W3 `* G0 t+ ]$ h _" [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 C8 J$ V6 b" v; o2 uCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 E! v" \ d, U2 ^
positive for the year-do-date, including high yield.
% e, s% _( ?! Y( U' n* S$ t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- }3 Z, ^ W5 P9 x" w9 K" n
finding financing.
0 [8 i& e! U5 m# X" c) ^& a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they ?9 X1 Z; \: X" Z$ V. P# l
were subsequently repriced and placed. In the fall, there will be more deals.7 D h& I9 F, E* M$ P/ F9 F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) W V& h/ T2 Fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 W# h$ A* c0 B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 s* Y& p' k% l: I* Ubankruptcy, they already have debt financing in place.
0 m) z d% B* l# \; p# @5 p/ U3 k, k European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 d4 k+ C2 V! S: _ |, }
today.
, f1 F, w3 n2 p P2 J# Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# o3 @/ ^/ z' eemerging markets have no problem with funding. |
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