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发表于 2011-9-17 13:16
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Current situation
8 t9 A9 t1 j3 t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 `& |# ?" W, v7 F. b! g* y/ _as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- z, @8 O( K: eimpose liquidation values." \5 I4 B( I) K6 g8 l/ F7 c
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( {2 t1 |2 L8 N
August, we said a credit shutdown was unlikely – we continue to hold that view.+ X, @- y) u8 q4 ]
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. r3 L. L- }! [5 ?" X! kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets% X% d7 |0 `# L- L6 w
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 K z8 N- B2 ~
September. Non-financial investment grade is the new safe haven.1 q3 Z" B7 D- l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 N# i( W: O4 p8 ?/ Y6 x) ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 V6 S" d, R; _4 L2 ]+ Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& A0 ]$ Y4 S9 K) N& qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! w- M$ y) [! {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: |0 }% g9 a1 s
positive for the year-do-date, including high yield.. G- v# o2 Y2 D+ z, A
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- z4 o; K/ | a, q* d, `1 P
finding financing.
1 u% b/ ^" U3 }# V( u5 H' |6 o$ x7 ?7 u Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# B: V8 \: T: D+ d% U/ n2 U
were subsequently repriced and placed. In the fall, there will be more deals.
4 A9 z/ A" q' |$ L. W' ^ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 r3 e/ R( o( d) s8 B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( C* j' Z# M% [+ P( S7 U2 {0 f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 f* F: {$ v5 E- j3 N a
bankruptcy, they already have debt financing in place.) E, A9 G; y3 x; V O! R
 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' o( O; E; n0 L& X. E( t: {' h7 x8 A
emerging markets have no problem with funding. |
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