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发表于 2011-9-17 13:16
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Current situation
7 i* B9 U6 _6 e# t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: t' p$ v; @7 d4 V3 H# ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' s& @3 Z$ V' j( aimpose liquidation values.1 j" O1 a9 U& {2 l. {4 N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% ~. ^/ L2 F j/ A& ^1 ^August, we said a credit shutdown was unlikely – we continue to hold that view.% @% T0 ~ J: W6 f6 l
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 I& Z: ?' o. q) X/ |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
0 Y4 @% _. n5 F5 [4 K/ s5 u$ _/ m Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ m& C* o/ W$ V+ W% X
September. Non-financial investment grade is the new safe haven.
) A2 P: @6 J; i, d$ e: ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ m! `6 [7 R6 ?) }. T' o8 ?then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 K# [9 q$ [0 C0 ?billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! F% }3 p+ E( saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 e* D; D9 S0 a) j4 Z" ]" KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ r* q& E& ~0 e5 Rpositive for the year-do-date, including high yield.# C; x- d/ v2 o. I" d% w
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 K7 k* y7 s6 U' @- b
finding financing.# J _7 U: s$ K. R* F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they _' ~) n3 J& X- Q+ \8 r$ [6 t) E
were subsequently repriced and placed. In the fall, there will be more deals.
) t- E4 w* @: g; j Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. q8 A/ v9 _2 m1 |( M$ i3 @$ Iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! Y5 o/ A9 |6 g- l# Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 C" u/ R3 H `& o2 j6 }bankruptcy, they already have debt financing in place. C! {( x' ~! W& d d. t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' x8 M8 M: P( E$ B6 Ntoday.
/ w1 @2 v% N! O; f" s Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 K$ U4 {- |- u( j+ s1 C3 }
emerging markets have no problem with funding. |
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