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发表于 2011-9-17 13:16
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Current situation
8 W; ]2 d. {9 s3 T5 K) J9 _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 F3 N g4 L1 `& x' C! a+ r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% Z0 k+ }5 @: b, [" z
impose liquidation values.
* S* t1 Q5 p2 s# g8 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' r3 T* _# p) E+ f! B6 X+ XAugust, we said a credit shutdown was unlikely – we continue to hold that view.
6 [! ?! r& m$ c6 U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! b+ p6 K$ I5 j y$ p+ h3 {
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets9 x5 w/ |" B j% y# |/ P& ?
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 S4 K* M" S) P* C" f
September. Non-financial investment grade is the new safe haven., ^! ?) h- ]2 q' W9 l! j
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* Y3 a) B1 { a' C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! q0 E$ f9 J9 E% X7 A4 m3 r$ Wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 ^" {4 M: S% S' w: m/ L2 A; A$ baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 e: d( G" h" |/ [ |
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 Q! R" C2 V2 `# Z# }& [2 U% m. a0 c
positive for the year-do-date, including high yield.
# O; I! j/ A9 X6 `7 O7 t( G1 N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: Q7 C* V$ H; ?
finding financing.
) c4 P, o3 f ] [4 v( @ p( E+ N Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. k) b3 I7 L/ K8 \" i; A
were subsequently repriced and placed. In the fall, there will be more deals.
! J6 g; j a+ o) g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& s, t2 a- d9 I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" L+ i( G; w* U9 ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" n: y. E2 S( P; a2 \( ^bankruptcy, they already have debt financing in place.
# c; b" ]4 v7 Y# y! ? i" S$ P. s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 N$ K: U1 K3 ?( |
today.
c+ B9 U, C5 [$ q! b* m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# [' Y1 Y- Y* m+ G4 @# I/ v; nemerging markets have no problem with funding. |
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