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发表于 2011-9-17 13:16
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Current situation. J; X- c+ J! S! }$ z. k
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# y, N: S& N& b c" U$ \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ Y( H7 z2 o* s! P/ ]impose liquidation values.; f/ Q; \( a; n- S, e; a) w
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In _& _% ~( U6 i$ N7 F
August, we said a credit shutdown was unlikely – we continue to hold that view., m4 @& g8 ?+ X3 t: ]) o( V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' u V1 o2 ^# V+ [6 Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
1 k5 l: k$ C; v
. B3 S4 E: z+ y, KA look at credit markets
" R8 d# t# _9 x& j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! r1 ]3 m' |, s5 m+ D8 a
September. Non-financial investment grade is the new safe haven.# ]% {+ g$ L+ Y9 d
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 V% x% Q$ g9 b$ J8 I8 {3 y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; ^, |; g+ L8 `7 \
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
r) U% n! h( maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* g# @) ~- u, H8 p1 u! DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- D: F6 K0 N! U7 s& ]; e2 {: s: [positive for the year-do-date, including high yield.
8 u/ l; j& i: y, ~3 r& o) W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( _( z5 t, u, l' k/ X
finding financing.4 w) B" c# ?0 ]* b0 n
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 N8 [% b7 ~8 Q3 B _were subsequently repriced and placed. In the fall, there will be more deals.: ~8 i- o/ U1 _; R; C( K+ q: w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( o- H( d; O$ F9 b4 _5 j7 E7 P4 v7 `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 b0 \: J, w+ ]) Z- Y# N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ f$ @: T4 ~2 }% T" Pbankruptcy, they already have debt financing in place.
# F/ F; l# c" E- {3 I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, W& }7 M- E" p* Rtoday.
/ p/ {" \* c; }4 ?8 X4 q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! \& I/ c( n1 S3 p
emerging markets have no problem with funding. |
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