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发表于 2011-9-17 13:16
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Current situation
# O4 [+ W6 Z4 D6 B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" _, E6 b$ x8 I7 q9 C% r {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 I' `, _3 B- zimpose liquidation values.
4 ~% c% G; m& e In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# M8 w3 b# m/ w5 r: ]8 X- nAugust, we said a credit shutdown was unlikely – we continue to hold that view.
% M Z r: U& u' i$ M0 U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, z- y) N1 |) _4 m& R5 a! X3 ^scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 F/ s( j2 @( J' G' }
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A look at credit markets6 z1 c5 L. |% D( i* A
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& D( h( g3 E$ r" e R9 \+ q3 ZSeptember. Non-financial investment grade is the new safe haven.) l B: @) \( J% {, b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& I: {. |- e# b4 C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ X2 O$ g7 e/ z* ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 f, {) e' d# U& g7 h; W# [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. H, L# _5 J( {7 A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* X! U1 L1 w, x9 n4 `; spositive for the year-do-date, including high yield. y+ {" w+ w0 U' v& L7 o
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 d6 l9 p: ^4 [" y- U ]
finding financing.
6 m" o* X, M! m( m6 c# r+ \( f/ i Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' \. V6 a% C( U+ w: k# \! Z
were subsequently repriced and placed. In the fall, there will be more deals.: W) B. S7 r+ |) d( a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ _ e& \9 e5 a) _is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. X9 t8 {& Q1 C+ Y/ m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 ?% t; U1 v& `% p
bankruptcy, they already have debt financing in place.% i7 r: C% |0 y- L7 K5 a
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ K+ ]" K6 l) u# [) g- p" W% W
today.) ]# C) |, d* J/ u4 s" J* n8 p# T
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 v0 u" V" E* A7 a9 u+ ]# w; M
emerging markets have no problem with funding. |
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