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发表于 2011-9-17 13:16
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Current situation6 Z3 V; p& [- d( N- {
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; P5 {) @' |1 I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) T* j0 L4 [/ `2 Oimpose liquidation values.0 u2 ~7 P3 @8 I) ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ q& {+ }; |/ ?- lAugust, we said a credit shutdown was unlikely – we continue to hold that view.
5 s0 a; `0 S5 k2 G7 @* X$ y3 Z$ P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ p3 [+ B. z, U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 n9 f6 I, W6 Z' ~A look at credit markets
' l" f* b2 A% O# }4 V5 ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 w5 w* ~: s9 W4 D; x1 F9 ^
September. Non-financial investment grade is the new safe haven. k) s& B6 b- G; |4 v7 F: u; R* A8 D) q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. C- V1 T$ @2 f( {2 K& ]- Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 [( T# @( u/ _billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' u2 b6 ~. C3 M0 o- Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) b: x Z5 Y: r$ l+ pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, n1 |3 L! ]# p. f4 y1 v1 C
positive for the year-do-date, including high yield.7 s! q0 n1 W/ \# t$ x
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 s! \5 ?8 s& P- K8 C
finding financing.
: v3 z! ~' g( R8 c Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 K& |3 Z; E7 W' s" Uwere subsequently repriced and placed. In the fall, there will be more deals.# p9 \, ?* a3 Y" M7 C
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 l. Z, }# \7 V& ]1 J0 kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& |9 p- X! M: J/ mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ F6 {6 ]$ q% c1 R6 Z ~bankruptcy, they already have debt financing in place.5 h/ H4 m; S( L- M# u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) F# V) K% H+ U1 c) N& c
today.
1 }8 i' U( `9 F Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* X1 @% V3 A" Z4 g8 E# I; ^% ?
emerging markets have no problem with funding. |
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