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发表于 2011-9-17 13:16
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Current situation
4 }9 @! c* `/ I( N: \: p The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* U+ Z( Z" v- `: Z. c6 Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ i ?& M. Q% y6 k5 L6 Y% {; X
impose liquidation values.
7 i2 X+ z9 V6 ~ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ ^; H3 Z: g8 y9 ?/ V5 P$ `August, we said a credit shutdown was unlikely – we continue to hold that view.! R+ ^% A7 L, h& ^$ A) x9 U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ R7 q3 c8 r# ~7 u! S6 O
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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! G( f/ t0 s4 A0 Q/ PA look at credit markets, V$ @2 W' } l5 \4 T2 y/ l6 Y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 R9 Y W4 f1 h) i5 i/ E( |5 `
September. Non-financial investment grade is the new safe haven.
6 T: n) y- x! ~* l7 m' Y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 p; ^; _, b* `: l& I: X k6 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) v' C9 b2 |1 Z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) P4 _5 f% M) @# i1 r0 P2 F2 \9 X
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade ~1 F! a0 |5 W0 D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; h# Z' Y2 H6 x7 l U. k. [3 }positive for the year-do-date, including high yield.4 [% j, P% U9 h$ z/ n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. W0 t4 T0 x4 s; G0 l1 ]1 |finding financing.) _# e8 l. {, |' x `* V" e
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ ]% E+ I- V- d0 _# J7 D) d Dwere subsequently repriced and placed. In the fall, there will be more deals.3 x0 V3 a! ^2 {
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ W9 n: e! }- ?. J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& d I( H& K( G: T' {) Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ p8 Z# o; s- Y
bankruptcy, they already have debt financing in place.
* @0 t% h* z% t9 ^6 X2 D) r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# {6 L1 o7 t4 P! `+ r3 n+ _! ^
today.
8 y. f* N {+ J, O4 W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% L6 J: g* `1 M, H$ f$ C
emerging markets have no problem with funding. |
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