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发表于 2011-9-17 13:16
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Current situation
0 t% ^/ M& O6 R4 V5 ]+ Q% Q$ |+ E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long S3 V3 z/ c% T$ ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, {! g9 o- \3 ^2 Z0 k+ |
impose liquidation values.$ w- D) X" [7 U- R6 n. N6 m3 e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& ?) P, }" ?" G( S. a- VAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: ?; B, d3 S; @) @# F; \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 C0 a/ b! L/ x0 D. r9 v
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets: Z+ _% w% _$ s* g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
?! R) B: R! e1 F6 NSeptember. Non-financial investment grade is the new safe haven.
( V$ E# P# q2 N. p* O- \9 g, Y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ v$ j/ M: h3 ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ F) S- ^' _0 L9 k$ [2 }' zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ N) g: z$ `0 k4 V/ a% a: p- raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# _! Q& `4 `0 ^ u, ]& \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 k& W3 a- J* Y$ m- h6 p
positive for the year-do-date, including high yield., x; f- L% X! H8 n* F: v O& ~- M5 t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' \3 y' D0 t9 Yfinding financing.
, V: d8 Y) t8 S Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ n4 n5 _! H9 K8 o; J$ Lwere subsequently repriced and placed. In the fall, there will be more deals." D6 t" I9 h3 g7 v% P) j# d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 }& z# U2 u C( f( M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ d4 `- k. R5 X& Z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% N" j3 B/ c+ g, x
bankruptcy, they already have debt financing in place.
' s9 m# I0 D+ C! R& R8 ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ p: }: X6 I# G, Y) \- ztoday.0 t; p4 J" N+ J4 C4 `
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( L- V& [; W. z% ?6 g, Femerging markets have no problem with funding. |
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