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发表于 2011-9-17 13:16
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Current situation6 G9 D7 ^5 M! l3 ?- m" t4 r
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 c* h: P8 I4 O. d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may* O/ w# O3 c: d% A, N" p. f
impose liquidation values.- s6 J0 Q0 ]7 z0 Q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 R A- n2 z, j; X; n" {$ B! }
August, we said a credit shutdown was unlikely – we continue to hold that view.
6 L4 D" t( _+ ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 ^: N4 B7 V) ~; C$ o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 M4 w ~/ i% E' ]! {3 o2 K, l
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A look at credit markets
0 `; c$ Q$ o4 p2 y2 R R0 X Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ f9 ^# B0 r3 P4 m8 L6 }' f
September. Non-financial investment grade is the new safe haven.. a3 p7 C/ x5 F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
$ O! c- `; L$ G) S( t0 W- W7 q- `then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, p) n- a4 `! m9 T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 Z- W8 R/ ~7 b" y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 r' q& b% i8 O2 ^# f8 e0 W6 R( w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 J! f2 ] R% F- r" I0 f/ @+ M
positive for the year-do-date, including high yield.
. I* B7 [% j/ d: R. l1 o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 @. T9 B0 L* t. ]
finding financing.* s$ d& O; Q6 f0 |! `/ r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 b% f! I/ Y# k0 t6 m+ \
were subsequently repriced and placed. In the fall, there will be more deals.: F* c& E) u: U7 n
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ d* e4 {/ n" I V! ~is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" u: g* i$ ?1 k6 o+ T8 \
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
U" L0 f+ r1 pbankruptcy, they already have debt financing in place.( L r+ p' v' q' {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 a: D$ L6 U9 H/ D/ b- d
today.0 C, E0 N6 N, C8 c- z. [
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ }! t) X" l. H8 F. G6 y: @emerging markets have no problem with funding. |
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