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发表于 2011-9-17 13:16
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Current situation
" V" v) n( e0 P9 ~7 E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 T$ M) q1 ]% W& z( B/ aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% P! A0 u( E1 g- E" F/ `impose liquidation values.
" ^/ }+ G$ a) Z& x* q+ T- w In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! K% B+ \: o9 z) T; a" f YAugust, we said a credit shutdown was unlikely – we continue to hold that view.
# A4 |% [, r8 h5 Y% s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, s" d- ^+ w2 N# l2 \5 X1 Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets7 Q7 H5 T% [/ M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 a5 B& m" z% u; [1 _7 | JSeptember. Non-financial investment grade is the new safe haven.9 g; d; w' W4 P; `# J7 o
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. S/ F( P) t) ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! n- H% ]1 T; G% a: P7 s$ w
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% q, s! L$ e' j# d$ j+ gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( u3 j/ L- I+ J. ?& K# Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# m# W# k% F0 q
positive for the year-do-date, including high yield.' P4 ?' Z: Q3 c- ?, Q- w
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# P: T$ u1 x0 u' _0 f$ x1 G- i
finding financing.
" }+ j2 m! \* L. q/ Q* l5 \ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& l. X$ C2 [7 J; \4 T; e3 Rwere subsequently repriced and placed. In the fall, there will be more deals.5 O! Z) \6 l$ n! U7 l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ h; W" `7 d' S% R
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. n' \, W& K$ U2 g4 C. y- igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 ^4 A6 l: |& ?+ E
bankruptcy, they already have debt financing in place.
1 V: Y0 ?/ ? u# Q; Y# K, k) Y( ^ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain J. i5 s5 e' S
today.9 b! x3 Z4 j7 U' c
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ v$ G% l2 ?8 g6 I$ K8 X
emerging markets have no problem with funding. |
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