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发表于 2011-9-17 13:16
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Current situation
4 g4 C" h* J: r6 p) ]% G4 _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% h( g W4 ^8 A7 U1 C% O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- ?2 C Q' j N% y& ?8 p0 R
impose liquidation values.8 @8 d: F! F `" S8 S' A2 j
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. W8 J9 R- ^0 K, F8 H" z5 K
August, we said a credit shutdown was unlikely – we continue to hold that view.# h0 u9 c2 q- G4 Y: P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- K" _3 V" E" ]* vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
$ W) E: Y2 h; _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( E: W; ^4 t2 d, ?! ^
September. Non-financial investment grade is the new safe haven.
+ i" d: p8 X$ ~& I4 M High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 D! p2 t/ \4 _8 c" m w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& W ~2 ^/ b) w! S! g( n3 O2 Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' m/ Z' ^: l7 } q- ]; R1 |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 r$ p* _. Q. S( o( \" {, m: w2 q2 I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 u$ i$ X( h6 v
positive for the year-do-date, including high yield.
4 j( E h. T: J6 T# |' v6 e4 o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! g2 A7 ?- m2 @0 e" Z
finding financing.
% [+ [- h. m2 I( f% G$ ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% l2 g0 m( I5 x( z& q/ ?) Z8 L. |
were subsequently repriced and placed. In the fall, there will be more deals.# {# r$ V6 ^ b& q9 l" R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 r* N1 v( Z. B o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& [) O1 ^9 x/ L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ k$ G1 W( d( F5 Q; L% _. ubankruptcy, they already have debt financing in place.* ?0 D5 o, `7 y( p4 |7 r3 D2 @
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' E& e1 {0 O: ~# Y4 X0 t; J8 a
emerging markets have no problem with funding. |
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