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发表于 2011-9-17 13:16
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Current situation
& `8 B! }- \' \5 z7 O' o3 O The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; c) \0 z7 _# F+ q+ D7 Y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 K$ B Q' ?% A7 r7 himpose liquidation values.
' [0 Q" g V W In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- q7 K( |+ b/ T0 C6 ?August, we said a credit shutdown was unlikely – we continue to hold that view.
* B' |6 u0 y+ k0 R The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 G; W3 c. s) T) t8 j, h2 @scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ f5 w& ~1 k% ~& vA look at credit markets
/ \ T. u0 u3 S# @4 {. ~) ~: L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 l1 Z+ \5 R6 }# M3 C% K+ ~
September. Non-financial investment grade is the new safe haven.( X9 A; h9 b: M9 K% ?
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 Z \0 j% i/ I( Wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) t) C5 W7 P2 A, K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' q6 b0 P5 F, Qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. f* Z- Q4 V) L1 [0 M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 j4 Z$ B/ v" c0 J2 a0 ~
positive for the year-do-date, including high yield.9 I P. N- p6 b4 Q/ r2 G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# w0 R0 [( u G6 i- Q! Q
finding financing.; w' z. g# t. c9 C# p1 N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. E- S8 _- D {- B/ F7 s0 c e' @were subsequently repriced and placed. In the fall, there will be more deals.
$ M1 h0 e( h% \& c Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% d( L: l! O5 w' `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" I4 a" a5 I- [; w2 ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for q o, b) E" _! F7 P3 T
bankruptcy, they already have debt financing in place.
" w" t5 M) e8 U' V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# Q5 u% A* }, \" e2 `) O4 |' p% s
today.; ~% I/ @/ }$ T V a) Z: m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( G2 l O3 O8 M( c% ^$ nemerging markets have no problem with funding. |
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