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发表于 2011-9-17 13:16
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Current situation$ y8 p% q: M8 n+ {2 N% N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( I+ t _; p0 ~/ j8 X Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 v8 _, G6 e4 Y9 I1 g `impose liquidation values.
/ v6 u; i* x1 a3 O- x8 t- W; z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" X5 Z2 R; I$ ?2 B7 }August, we said a credit shutdown was unlikely – we continue to hold that view.' ^1 }! n8 P) I% T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 \! q( \& R" e! Sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ `( U' k5 n1 g# p- HA look at credit markets' \0 m/ e1 c, [; ~) m+ d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 x8 u; S! p5 Y
September. Non-financial investment grade is the new safe haven.
7 h1 L* G ]' n0 | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 c, w- j$ u1 q2 G& L9 @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% t( e/ K9 `2 L# n4 J7 mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 ?' K$ x2 d1 g9 D" G3 Q4 d4 jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ c9 m4 N3 O. Q* g
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' b3 ~' D' ^8 F/ [% o4 a) `
positive for the year-do-date, including high yield.
4 Q2 n K0 t9 \) d4 Y4 i! ?! {$ ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 d8 Y; ?0 C0 u# H% Dfinding financing.
: r5 ^7 ?* ^, k" N1 A$ R2 u Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ Y4 y+ k+ c P F- Q' o8 Nwere subsequently repriced and placed. In the fall, there will be more deals.: g2 n7 j% Y6 j0 M: H4 \! I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
e# E3 t' J' M# c7 w0 T' L+ vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' n; H) L: g' q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 z3 C+ G0 |6 o* h# W1 Cbankruptcy, they already have debt financing in place.7 E6 \: ]" W9 p; h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 R3 ~" N. R- M- M
today.
- G4 y. S, \2 d( q7 B9 w Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% I' T; `1 {5 D& x/ s. w3 I1 m. o
emerging markets have no problem with funding. |
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