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发表于 2011-9-17 13:16
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Current situation
0 Z2 d2 @' F" C The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' V# x0 ]+ D" Z# A% f" @: _
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 G. r3 e0 G! N
impose liquidation values.
6 H! [" }: F' n( U In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 x& I8 a* T9 l0 k3 r# j
August, we said a credit shutdown was unlikely – we continue to hold that view.' o. X. I8 S* H4 c9 o
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) m9 p$ V! I: F3 o" S' w
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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0 `" x5 O \1 t$ cA look at credit markets
& Z2 O" V9 r. |; l' P9 V; y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 p7 t2 K/ ~5 D. {0 V# w
September. Non-financial investment grade is the new safe haven.# L/ G2 o% ?; c0 p
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 D- T4 n$ p' A% v/ Y8 }7 Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 T0 r4 p* k1 n+ Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. p3 b8 ^6 Y9 _; X+ i6 faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) U( g* w% ^$ b; Y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' y6 O3 a4 U+ f3 |7 r9 u- N
positive for the year-do-date, including high yield.
. [' E- L3 r3 V( n Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 m) v/ s2 Q/ s+ K
finding financing.
: J' c. q0 x2 [& Y0 h1 M* E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- ], s+ Y' ~% ?were subsequently repriced and placed. In the fall, there will be more deals.1 }( f5 [' u+ W8 W1 y' B" R' d5 f
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 _9 L( f* s. _# ~3 V. uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) I: o P9 p, A8 k2 Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 t0 l8 L3 E l( G( y$ h! u
bankruptcy, they already have debt financing in place.% P2 F9 U2 `0 @+ [) l
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 W# z% j7 B% H/ }: d! z
today.4 y; m d' y* J( m0 `8 Y. e1 L8 s6 x
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- l, i6 z. G/ ^. y$ D! [5 o( femerging markets have no problem with funding. |
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