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发表于 2011-9-17 13:16
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Current situation+ t4 e' e, T& U) X3 |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 Q) R" i5 w; s; J7 V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! ]. T& h U% {% N! g8 A. N1 p
impose liquidation values.
L% W+ [# X5 Q% j8 R, Q8 V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 J/ O; f1 c8 u6 Z* @1 u
August, we said a credit shutdown was unlikely – we continue to hold that view.2 F3 U# v9 L% P7 p9 T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" g. h6 K' e- Q: h/ Q( v: Y2 E8 B
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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! L* G+ ~, `% \8 mA look at credit markets
! E [) }: \9 N! L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 Z" `+ [5 h- D1 t8 [
September. Non-financial investment grade is the new safe haven.
; S3 |" t: u |6 A$ c7 F$ Q. z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' z' U4 F+ I' C3 f& {, D6 |' |3 hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 Z) U) Z( l8 ?4 \; k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- Z1 Q0 S; f" C1 V6 R) v
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade }: i/ M8 ^, [/ E" l
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) X4 U/ m# i3 T
positive for the year-do-date, including high yield.% l& F9 a- u7 H8 ~7 K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 m( v' v( |* h# d/ }0 J
finding financing.
5 a# ?- t* ^4 F8 Y" \) i Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 \4 T$ J S) z, x* z) S: w
were subsequently repriced and placed. In the fall, there will be more deals.
5 N$ o2 ^) ]3 ^2 E, u: ?6 W0 E1 e Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& ^7 s7 G& S" xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* h4 I, S& F4 Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) a6 y& H2 c3 A3 E; `
bankruptcy, they already have debt financing in place.
; n4 H9 a9 u5 L) l& E 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 in
. B- q1 G- l8 L2 a+ Y6 E( S9 aemerging markets have no problem with funding. |
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