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发表于 2011-9-17 13:16
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Current situation- v2 P% D g+ P8 O8 J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. t: m3 M7 G) f ]4 W/ p6 Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 M" f% J# a1 x8 Iimpose liquidation values.
4 W; E6 M d: D4 g: {: V) }+ D3 C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& g0 A* z" j( FAugust, we said a credit shutdown was unlikely – we continue to hold that view.( T- L2 I+ t6 k) v
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 Q) z4 o1 {* L0 l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
8 ^" } b) Q- k2 w) a& g# J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
h" T: i* J& ]/ Q* W, |September. Non-financial investment grade is the new safe haven.
' g1 U% H1 b% P High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# o( K4 E! D9 E K* K) Z2 s' m
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ ~& v$ e! l- w# R
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 }- q5 ?) T6 I+ f# a1 E Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* T5 O1 D' b" N* J2 {1 h+ e; B0 vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
q/ `2 D- u) ? P8 T; e5 ^) ^positive for the year-do-date, including high yield.
- I' Z! u% g/ w/ X% U7 `* j5 W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; h5 r5 |1 h& k1 T; |
finding financing.
" J, J- A3 t9 r4 F" J8 d! n6 V$ z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 I' }- o) K) s' y3 |6 ^
were subsequently repriced and placed. In the fall, there will be more deals.
( ^1 d4 t* l, F/ N7 h; c( N Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ ?, W: |) J3 z9 g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 G1 P% c' v& J, W8 S4 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for I6 U% x, q( l0 W& n; b8 d
bankruptcy, they already have debt financing in place.. e- B- y' a( ~. ?5 k4 M* r$ G! q: ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 c' Y! k! {) J. r# ?" T
today.
- L$ [1 O9 d5 f/ o8 y" v# R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 Q5 A. z6 E" a% N4 h; Temerging markets have no problem with funding. |
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