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发表于 2011-9-17 13:16
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Current situation
" W, F$ n2 O7 @) h! F The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: q/ r; ?. @& W1 I* D0 E+ e2 zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& N" d1 Y- \) a$ S# q9 H
impose liquidation values.
9 ]' Q' W1 x/ x8 W0 @9 Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 {" W( e: X/ K" Y/ z) m {' Q& u: h
August, we said a credit shutdown was unlikely – we continue to hold that view.2 [2 |# ^ ^0 e( t; @) Y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 y; Z5 h; I' X5 x) U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
4 V0 W8 L8 `, ` Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* F2 ~- R, J9 M9 i8 X4 V- X) X# m
September. Non-financial investment grade is the new safe haven.
2 G8 a5 x, q# f High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% F7 r3 P/ t) p9 S/ W; K7 r: P
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 \0 ]9 h# O/ O& G. y& B
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' W, G% b& V5 i& o* Z" p
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 }. L$ l$ I# K: T
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 `( A8 ?+ I, U4 i" epositive for the year-do-date, including high yield. C9 ^1 x3 h2 k0 b' b# \9 t' T
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. Z4 o+ _2 ]$ Y1 Q6 _8 I4 g9 C6 P
finding financing.
+ ~2 y& ?8 w! ? Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 z2 ^8 f8 r$ o! j6 V" k
were subsequently repriced and placed. In the fall, there will be more deals.
7 _. b. |; O" V9 K( @4 s4 \ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 J$ _; ]' j, w. B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ X9 t4 L3 g2 O. [
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* h1 A5 {6 r$ b3 R
bankruptcy, they already have debt financing in place.& h w7 i4 ~; n" z) v1 o
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( S3 z( C8 |- B
emerging markets have no problem with funding. |
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