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发表于 2011-9-17 13:16
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Current situation
% [ P/ k: q+ Z. [% z& U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! b- o& z b7 aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 g6 e K8 i. B: d U, g; {" Ximpose liquidation values.' \! U, C" y" y, Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) M6 m6 |( i' d- `/ h0 zAugust, we said a credit shutdown was unlikely – we continue to hold that view.
9 I' g8 B0 `: o _$ `6 g1 |+ P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. j; l6 j3 x5 v2 f* uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets! U4 O+ Q% ~+ X% C) k5 J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
e" T1 a. ?& J% K6 M3 ]3 zSeptember. Non-financial investment grade is the new safe haven.
( G- x4 m' g, q d1 r1 v2 E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 F% P* }1 Z. d6 |' P9 ]5 }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% d( e0 x4 L. G) Q0 G- G
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 X! l6 [$ ~4 laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 I# v+ m: X0 N4 K( c6 v
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. _1 h% |: @+ }5 r7 Lpositive for the year-do-date, including high yield.
' u8 u# e5 }( f Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, J6 e7 @1 b6 \) Sfinding financing.
`9 k0 Y6 U" s8 U% c1 {! { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 Y5 J: n! T5 d! |$ ]were subsequently repriced and placed. In the fall, there will be more deals.# s; P( {7 r: b$ l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ o- Y3 R: \. E
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) G8 V% n" a1 e8 A5 B$ y$ p; a1 Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% ]$ n7 X' g" h
bankruptcy, they already have debt financing in place.# N0 g. B, [( I$ r
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ H4 ]/ d% O/ M6 U& z" u6 D
today.
0 I3 w5 l& X$ k# X- U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! q, v: a! H/ s: u$ demerging markets have no problem with funding. |
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