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发表于 2011-9-17 13:16
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Current situation
, s2 \; |% x. H; v! n9 i, [" x; r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 c) [ Q2 c- a, \$ s1 ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' q3 W E- O6 e7 f+ }impose liquidation values.4 F' A. p7 ]: ~' }5 x/ E) j$ J- a. b
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 ], ~* v( U' Q) cAugust, we said a credit shutdown was unlikely – we continue to hold that view.: A/ s* |- [+ @- l
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ ^' W5 D& S$ g0 E% x- g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets c2 \; H* L3 x
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# g$ F) D% ?4 g1 C7 U r* e
September. Non-financial investment grade is the new safe haven.
% h, J6 L4 `2 V1 U# n, U( X' r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) d3 o9 D% K" c% [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 R; x! d: S) ?8 F. |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; y$ ~4 n: w( M( C* ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& r+ h9 E$ U8 O1 HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 v& c3 g3 H: _1 S
positive for the year-do-date, including high yield.
6 x; h: G$ A3 M7 E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( R& Y7 J8 t- P7 yfinding financing.
: o6 i1 b% E% Q0 n; p$ Y, X$ g* ~2 l Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% H0 B X1 A" I# M( d% Swere subsequently repriced and placed. In the fall, there will be more deals.% l0 R6 g! d, Z% `2 s8 _0 \
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, j1 |& ~$ i+ x6 q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 ]' [ M' _( j- B0 Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 l6 t$ ]$ o) `# Y- r4 q! vbankruptcy, they already have debt financing in place.
9 l# A- X+ s$ t: a7 P# ? European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" w b+ m0 u* D$ ~5 J0 W
today.$ H' `& @, }+ [: G. m! d& a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 G& h: l9 q& Q* q& C
emerging markets have no problem with funding. |
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