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发表于 2011-9-17 13:16
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Current situation
. M4 i2 ^) |9 i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% C3 m7 ^4 D, A3 s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# ?) L _1 |# \" c: m! h% w6 D
impose liquidation values.
9 g0 k* J' g0 | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) e2 L: [: d. O4 \2 E+ `' gAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ S* |- |7 B; l
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 m2 ?8 E) p; q6 p' ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets: S. W# w# t% c( T5 D0 z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- r' g+ K/ ? J Y
September. Non-financial investment grade is the new safe haven.
5 F3 ^' n; Z1 p( t3 D% @3 h) O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 W8 n# _ u* ~4 j: y' ]% jthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ P& @# X' }: C" o2 k& ^ Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* O" w' S3 H& c% h" R4 [7 l% [3 ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ m- o4 q% l% l* ?
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 O; A: O! y; L a k7 g% Xpositive for the year-do-date, including high yield.+ S6 V" M0 X2 [* G+ t9 t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 \% A& p0 Y" ^3 E
finding financing.
1 m8 p+ ]/ ]0 U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 H" ?0 v5 ~* x, F% j1 {$ n# k2 X, h
were subsequently repriced and placed. In the fall, there will be more deals.
. g/ j& G* G% P/ A+ F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 u7 e5 W3 X, c( I9 C& ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 N0 [- I( N! Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 P6 t0 W# O7 y+ R; Fbankruptcy, they already have debt financing in place./ J7 @5 v5 `0 B7 o" O
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 \- s2 s! D/ G
today.
1 D+ v% K% n( R# V4 d: E( v1 n Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% X3 b; L4 i* ?2 W* yemerging markets have no problem with funding. |
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