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发表于 2011-9-17 13:16
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Current situation
' J& U! {' p3 p5 K* U9 k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 ~$ w G! V8 T7 ]+ A& r& T
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 a+ P5 C' Q+ A, Y% S0 D" ?, Zimpose liquidation values.# D2 r C+ e% N; V/ U& a3 R. Y4 R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* U& v5 i3 t0 r! W- E0 ^3 `
August, we said a credit shutdown was unlikely – we continue to hold that view.0 Z0 f f/ o7 Z+ L
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, _9 u' y. P: P+ _
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ e$ a+ P0 W. x, ^" G
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A look at credit markets6 I2 n1 H) [( H2 a( x: |# ~7 W: D
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; A" A7 W6 y( V% n: Z4 L
September. Non-financial investment grade is the new safe haven.1 V$ U+ t# J6 h/ ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 o w5 }) ~: O1 s5 K @' x F
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 F5 l1 n$ Q" x4 x' n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" m; a0 |$ d- K; h2 P/ m9 Z
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 _7 |& _4 Z& K a9 BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 \ K [( E! o* s! Y. dpositive for the year-do-date, including high yield.
* r1 B' c; ^7 y& ^ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" M$ U: F$ r; U5 @& cfinding financing.
2 {+ B7 L# Z( V% T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 f2 D1 c; ^* o6 n2 C' bwere subsequently repriced and placed. In the fall, there will be more deals.
9 X5 M9 T7 ~9 a- n$ J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 O" H p0 n/ d4 S3 _% vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( B I5 Z. R! U3 z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. S" t2 E1 O6 d6 y( M
bankruptcy, they already have debt financing in place.3 I1 ~( U7 ~) {) v4 U
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( ~% @. k7 m: g; Q1 d4 `
today.
; P& [0 }8 }7 J- K. l3 M4 _ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 c- c# I5 s. F- I v- F, Eemerging markets have no problem with funding. |
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