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发表于 2011-9-17 13:16
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Current situation" @7 T3 A; P7 V; ]
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, p2 b& I- {2 n1 U4 F2 y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. q4 w* K' Q" U5 f! P2 Z) h
impose liquidation values., O8 l' _ X7 D& A! I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, @+ d i3 g2 b! |% G. N4 qAugust, we said a credit shutdown was unlikely – we continue to hold that view.$ }6 K3 _) x! e0 U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. q" n' i1 g0 W3 d& H8 s! Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
6 a4 s. C" a, U# H l1 I- O" h# }, E8 V1 }8 F/ V
A look at credit markets
+ R: Z1 N0 C' s8 k) s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in u b. A7 s8 M/ p9 }
September. Non-financial investment grade is the new safe haven.
5 r Q+ B( }8 a% K1 H1 p- ?8 F High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 n6 k' n; c7 Z+ G2 ~
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, l' D# V& I# Q5 f2 }& y3 A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) {2 y V8 m/ l& r/ Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ ?$ v7 U: D; K& ]+ X1 h' A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. S7 L4 Q' T% h# b, s; w% d$ s
positive for the year-do-date, including high yield.
p3 _1 s) Q1 C" A* Q; J8 X Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- T+ H( M7 z! H6 a
finding financing.
! P+ R- A) @" x$ I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 g: `6 c) w- H1 X# e9 d( v
were subsequently repriced and placed. In the fall, there will be more deals.* E" ?- z/ h& H* k) U" }1 Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! F. d. n7 Z. R% A8 Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ c( w1 j3 m+ a. L( d4 I Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
O" a9 ?+ ^" H# _# q& K' Ebankruptcy, they already have debt financing in place.
9 @/ L6 s) W0 \8 V# t7 s, `) | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ a1 @3 R* Q/ {; r7 U( z2 k
today.
# h- X- D, [( ~+ M4 Q* X3 G$ ^8 N5 p7 E Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* ]+ I! G- w6 w7 Z% D I$ [- iemerging markets have no problem with funding. |
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