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发表于 2011-9-17 13:16
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Current situation2 E( A% j5 t( ~* p& n$ z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& E6 c W) k, Tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 [5 w P, z- i m
impose liquidation values.6 {) Q' n [( J; V/ R% ~
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ j5 Q* {0 z# f8 L. W$ jAugust, we said a credit shutdown was unlikely – we continue to hold that view.
# h" I, W7 G( ]9 g* L The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: @' z! [$ w$ y# v5 @8 T
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
4 {9 ?8 S" f! ~* U( g; P7 |
- H5 Z+ I* d8 ^7 L; v8 GA look at credit markets
. r7 M" f; E" e! g9 [ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- g! Z9 E/ @1 M3 E+ q
September. Non-financial investment grade is the new safe haven.
6 m6 t& {7 e5 n7 d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& i) u5 K! t) c- p9 d- y/ q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' |6 I' Q5 C- O8 G, C% abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
g; s& x! D9 l# d$ Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& J+ Z7 t' s9 i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 D- X. W+ g6 |! i$ N* Dpositive for the year-do-date, including high yield.& G0 k1 h7 P# }( f7 b$ V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( \. T! ]1 v. P: h
finding financing.
( r/ O- ~# Y. a, h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 o3 m$ }+ g% s0 q& ^1 J
were subsequently repriced and placed. In the fall, there will be more deals./ [1 @) J2 m! {! R% ^* I0 F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. r9 ^0 h# M# o' X( b( ^" e' N- Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' Q. d6 P: k8 m9 o8 }. b3 l5 U( Agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 Q) ^, C: Z/ l3 A/ H
bankruptcy, they already have debt financing in place.! L9 y* q" U) I$ Y& M
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 u+ Y6 `5 {5 p7 `9 xtoday.
* D+ Y/ U8 @ F Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 W8 V8 l$ y- I. ~: u
emerging markets have no problem with funding. |
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