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发表于 2011-9-17 13:16
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Current situation
( p" j$ n' Y3 k# _! W/ R8 U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- ^7 n" v& |! Z3 ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' E, o: }7 f$ c' y3 yimpose liquidation values.: B0 w) ^1 G$ k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; m# y$ z- A. _: e0 LAugust, we said a credit shutdown was unlikely – we continue to hold that view.0 a7 F) g2 Z4 j* I$ y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( s7 |, F2 o- i& L' ~/ A% {$ }& r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
* \0 G/ g% k- }" Z8 }! o- Z6 C; j8 J4 D# s5 A! P9 U
A look at credit markets
1 T. X$ F- o( t: E q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, D/ w* C/ v8 W Q4 @; WSeptember. Non-financial investment grade is the new safe haven., H5 @2 X( b3 Z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 `* v0 ~0 q, L" u% R1 U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" q6 \/ f9 \( v) C+ u' ?( V/ v4 X' hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& d! b$ x2 u' @; A5 p0 p1 f7 G& ], G
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& f3 L m6 s5 y7 @% o% ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are* E. E+ x9 s( P/ X4 c
positive for the year-do-date, including high yield.3 d# h! S1 ~5 g* y$ ~7 Q' ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 C# w1 q! X% P% }finding financing.
5 M( ?% V4 E i% z+ a, V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! y2 r( x4 A0 U+ S) g5 b3 B
were subsequently repriced and placed. In the fall, there will be more deals., S5 Z9 C- K: x% ~2 @$ r' `
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ c$ q( }2 V5 ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% C' f4 d: Q$ E# A4 m) X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! r) A* A7 q* S7 D$ a' n" `+ Ubankruptcy, they already have debt financing in place." f. `; Y. K3 l- N+ K+ K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 H. i, _$ I7 L0 M, A3 _; Z
today.
1 ~1 l- x' _- I' `5 G% U, ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; X8 U3 R. C Memerging markets have no problem with funding. |
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