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发表于 2011-9-17 13:16
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Current situation" D# V7 q7 v; F% F
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# {, W$ G1 j! J( r9 V6 \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) H( X2 N) w( E, O- |& ~+ `
impose liquidation values.
4 D$ ^8 e( s7 P5 u: j In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% d" T8 f- i. W' }! N* g
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 b$ k: C! s* F! I( |4 s8 m+ W The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 l+ ^( y* M* Y) W6 \4 R; t+ Escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
+ @) Q$ ?1 }3 H, \7 L7 | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& A" p- t3 o& p2 h( \September. Non-financial investment grade is the new safe haven.. }+ y; u( P5 k# k" x+ u1 j) B4 p
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; p, t8 I% W! J# W# v3 h, F3 j. Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ w+ H$ Z6 |! T$ Z3 |( D1 ~6 y7 y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" |+ g# B2 N9 q0 \. M$ x. i7 m6 V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- i% U s' f- u2 e; p0 u$ E& j7 ^. _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 a2 Q, ?" H' t4 D
positive for the year-do-date, including high yield.
* v. w0 Y" |7 e7 e% k- v. D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& K5 h8 [( p5 S6 ?) V9 _0 A* n4 h* Efinding financing.
& c! @3 i, Z3 F" T6 s; ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 L; P m5 h- G4 ?+ twere subsequently repriced and placed. In the fall, there will be more deals.
4 R$ K% U0 \7 H( e+ P6 w8 m5 y/ K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 J2 X4 b) M" b: A8 N/ L Lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 s2 @* }8 o% f, F
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; \( o% B- J* h# U9 D$ G2 S6 t- L
bankruptcy, they already have debt financing in place./ D+ t6 e, Z: v" Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% X% F' I$ ?3 q! Q' z8 t# Xtoday.
& _. c' {" T9 z4 S6 m+ y- W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- W7 y) k; q* ^2 @: i! _2 W
emerging markets have no problem with funding. |
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