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发表于 2011-9-17 13:16
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Current situation
8 N: L9 k; G; z% y$ L) \' c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 t8 G! [* ]" ]5 A& x- S6 Z* jas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ c# S$ d9 ] N1 [
impose liquidation values.% n; K/ g( g, B9 V% m* U% {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 h! h! m) W) K" m$ i ?August, we said a credit shutdown was unlikely – we continue to hold that view.
1 S ]& R: ^1 F' ?2 t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 w. s& T9 |5 H: escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets7 Q0 y8 e a3 Z2 m6 A H" z1 B) Y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 s* B8 P& J% g- j% k1 y8 b- {5 R
September. Non-financial investment grade is the new safe haven.
% ?( u9 d) J- f9 {5 K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* D8 y/ @+ a. Y6 R3 F8 nthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, H; P! K$ _; ^* s1 y. v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# b! K* P% v* P2 ^9 h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. M! Y! Q- W$ Y; {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
_' b) f1 d- G$ s8 j; V& j5 ^- r' hpositive for the year-do-date, including high yield.0 |! q8 \: _* d' z( p4 }
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# ?8 n" Z+ }; Q I6 N
finding financing.: m/ U" y7 t$ p& Y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, e8 o" j6 P/ N0 S
were subsequently repriced and placed. In the fall, there will be more deals.1 s( y; I$ ~6 T! Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) h: I8 d3 q4 `. w6 M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 R" ~8 n& C. q/ u2 j2 P2 Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& W+ Q. ]7 p0 m! O8 |$ L+ A
bankruptcy, they already have debt financing in place.
% T9 H H9 X1 f8 _2 J+ m European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. G, B) {( Q/ Ktoday.
- B0 Z+ b: |) w& i5 W/ Q. b Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 @( p& ?) a& O" \emerging markets have no problem with funding. |
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