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发表于 2011-9-17 13:16
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Current situation; u) A& W& s- C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 B, W; m0 b4 d( {8 @ Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 Q2 I& e1 f e% O0 m
impose liquidation values.
2 E+ e9 m" N0 y6 {: `' ? In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 B5 r" o0 P8 e) D( [7 q7 iAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 ~5 ^7 G. O) e2 W+ `) {" a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; a0 S6 S+ A* J7 A; ?scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
) w: [: o, U1 V3 E* c: M! S& l) r2 c1 ^
A look at credit markets
) q2 [0 l& M p3 K/ r* @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in h/ _& o- T0 ?$ S
September. Non-financial investment grade is the new safe haven.( U& K4 _8 t7 z& T+ Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 R/ R7 L4 U1 s( ~1 f! s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 d0 c1 i8 c" j" s# \# D! F: g0 n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( M, E R. s1 i+ L4 {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 f$ y- h" n p& x
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 x3 F1 C! x0 Y+ S
positive for the year-do-date, including high yield.
3 F9 G( l! ~% m Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 e* X. S |& ~4 @1 E3 X) d+ sfinding financing.
$ G% m. s5 Q% u# L Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& G' ?/ e$ ?% g' B6 h" xwere subsequently repriced and placed. In the fall, there will be more deals.
0 }" E2 w6 S( s4 g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 _' K% z9 ? {# d' i2 t3 y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: y" C! N/ q/ c* y. k' H6 y" _
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( \7 l0 _# [! E0 y% M; t
bankruptcy, they already have debt financing in place./ O+ l5 y7 R" Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" ~9 ~; S/ ~% e+ _) ]: q6 S
today.; F( [' H C5 c! b( f* `
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- |/ ?+ J+ B7 r
emerging markets have no problem with funding. |
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