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发表于 2011-9-17 13:16
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Current situation
. t/ r1 a: m- W& O U5 P0 y* [ ]; X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: `& X" B- R/ y, Y# yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, w$ P+ u9 l. F, D8 O) Dimpose liquidation values.
; H, |1 [# K- F. } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( |% [+ c' U3 O: H$ ^7 v9 l$ yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ ]4 s/ M9 o7 o x, i; R: t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 e" u9 ?9 ~' Q, Q- T6 R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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2 U+ U8 ]3 T8 I8 @, M2 _A look at credit markets1 {' {/ S$ J: h9 J5 J/ ]: f$ ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; Y4 `& Q M4 Q4 i4 Q
September. Non-financial investment grade is the new safe haven.3 b/ G5 c$ I5 o- j4 b. q$ R3 @
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 k3 H4 r' w m/ v1 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 d- O; ]9 @2 |' t: S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 O" [& ]4 l' x3 \# U+ E6 P7 ~$ M. vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 s8 k4 C' ^ y0 Q3 XCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: m8 A) i5 d# j% Y. Cpositive for the year-do-date, including high yield./ T2 S. u: C% y3 X4 l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* B, g. ^1 M" O& @, A# r. C$ n: }finding financing.0 C* ]0 p V. h# Q" R
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 |9 ^( W. I# \$ D+ L5 f9 j# W; F
were subsequently repriced and placed. In the fall, there will be more deals.& I5 V* O8 L, q3 [9 p" `/ q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 f% [1 N) b2 J: ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 ^; A: ?3 T# W9 L. w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; p& D& Y- a- [5 ^; [bankruptcy, they already have debt financing in place.
" q8 Q; U; @4 R v European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 z& h. A6 e8 ?' P
today.; O2 C7 }* n, R" m ?& t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. U' k$ Q; _6 {8 r
emerging markets have no problem with funding. |
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