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发表于 2011-9-17 13:16
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Current situation
+ E0 b0 O' O# u The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% g( l4 \! }7 ^2 Z$ Y" H. O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ [$ t* A% ^( h9 Oimpose liquidation values.
x5 T8 ?, G& g; _5 A# d In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; l3 w& x( v4 v" FAugust, we said a credit shutdown was unlikely – we continue to hold that view.% ^5 Q z! i* c j5 z Y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, s- r! _0 Y+ S7 G) j
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) S% b/ {6 f0 e
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A look at credit markets
- ]8 @( u7 X1 [2 C8 z/ |7 m Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 q, R* p7 u T. {0 E" d1 U
September. Non-financial investment grade is the new safe haven.: Z+ _. K t% N- H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& d( ?$ t+ O8 Z. ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 D& G- H4 { T4 U+ {! `3 X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* j; ]5 P4 K% O$ c8 K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" Q6 X- O' _% h- H9 ?' M4 eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 s* ~! Y& n3 Npositive for the year-do-date, including high yield.
o4 L. c& j3 A9 d0 V+ w: z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 o: \% ~; Y/ v. F# @finding financing. @7 D4 ]& M5 l4 A5 U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ P: G& T5 n5 ^# a" A" K, \- P
were subsequently repriced and placed. In the fall, there will be more deals.
# p+ v+ w0 H# F- t" ^# D. J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ B8 T9 l+ M1 a* \& Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; ?# ?" v, X( ~3 g
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) g1 g2 A9 m) ubankruptcy, they already have debt financing in place.9 C! ^# m# ~9 A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# _9 R" }+ Z7 N2 dtoday.
/ ]& Q, b0 P9 c5 ^" f7 W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" ?7 U0 \( z7 o
emerging markets have no problem with funding. |
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