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发表于 2011-9-17 13:16
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Current situation
1 V4 D* P" A; h7 t7 i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: R R" m) [1 r- L7 {% ?! q5 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ _9 L8 w$ `8 x x4 ]impose liquidation values.
" W0 N3 I& O* b* H) |+ [9 P+ r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 x: W) K+ N6 H5 G5 l* ^. xAugust, we said a credit shutdown was unlikely – we continue to hold that view.9 F& `# I5 \% n0 x" M
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* O" W# R3 s8 |7 S: q7 N; z2 i
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
3 ~5 Q h) b+ a3 Y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% `) S" o& ~8 y/ ASeptember. Non-financial investment grade is the new safe haven.3 g- T6 k5 q% v) Q. B. _- `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* F! M+ T7 T! @; g/ Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 j; w/ B3 ]. N, I; Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! r2 |- A" }: U! T+ e8 @2 I6 w! [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- v3 ~% Q; b r0 g
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 v( R' D! A ?, u5 t; n4 p
positive for the year-do-date, including high yield.
- u- t* a: r: |# [ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* h* }, `/ I2 u, ofinding financing.
) f! ]5 l" b0 b7 R) w9 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 ~1 J! i% `; m" C. fwere subsequently repriced and placed. In the fall, there will be more deals.
( U( O, ]7 {! @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 X0 A2 ]- R$ s* `. t' j% His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. O: o" N& W# e6 ~4 L6 Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 \$ f) C$ f; M) G
bankruptcy, they already have debt financing in place.. V: {) s$ ~8 C9 f8 @
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% p& U, G7 \. S9 m% i% I/ Y! `$ Xtoday.
2 \ w0 R3 l9 q" y8 J7 o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. ?7 r3 K! @* s8 i+ c( C4 H- \emerging markets have no problem with funding. |
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